Newsletter 82

12th July 2024

THE MARKET THIS WEEK

Once More, Bitcoin Bulls Fail, But There’s Still Hope
Despite a strong U.S. inflation report on Thursday, Bitcoin was unable to overcome a significant barrier. Thursday was a big day for the cryptocurrency markets because, in spite of a good U.S. inflation report, bitcoin (BTC) was unable to break over a crucial resistance level, continuing its downward trend that began in early June. For a brief period, it seemed that supporters of bitcoin might gain ground over the declining trendline that defined the sell-off from the June highs at $72,000. Such a surge might have attracted momentum traders and indicated the conclusion of the retreat.

Bulls in cryptocurrency frustrated as stocks and bitcoin recouple, heading downward
The S&P 500 and Nasdaq have been setting records for weeks, but that hasn’t stopped the decline in cryptocurrency values. On Thursday, both asset classes saw their prices fall at the same time. Although the price of bitcoin (BTC) has dropped more than 20% from its record high in mid-March, the cryptocurrency has struggled greatly in recent months.

Decline in FTX Collapse-Related Mining Difficulty for Bitcoin According to a market expert cited by CryptoQuant, miners’ profitability has suffered as daily revenues have dropped from $78 million prior to the halving to $26 million at now. With the 7.8% drop in power requirements to mine blocks over the weekend, one of the key players in the Bitcoin network may have cause for celebration in the upcoming weeks. Every two weeks, the mining difficulty is changed, with the potential to increase or decrease. This is a result of the intrinsic structure of Bitcoin, which checks miners’ speed of block generation to determine if they are mining too quickly or too slowly.

Instead of investing heavily in leveraged Bitcoin ETFs, think about this.
While leveraged Bitcoin ETFs are well-liked, they frequently perform far worse than other options when it comes to trading cryptocurrency futures. Millions of investors are flooding exchange-traded funds (ETFs) that promise twice the leveraged exposure to the price volatility of Bitcoin. They are putting themselves in a precarious situation. Instead of investing in these funds, traders seeking a risk-on Bitcoin wager can consider using cryptocurrency futures exchanges.

Why There Is No Evidence of AI’s Energy Use Similar to Bitcoin, the use of AI is more apparent to the general public than that of cryptocurrencies, and the hazards associated with AI are so much higher that concerns about power usage are mostly unimportant. The convergence of artificial intelligence and bitcoin has long been discussed by miners, bitcoin enthusiasts, and techies; nonetheless, this Core-to-Core transaction officially brought these two (perhaps) overhyped and overfrothed sectors together. The union makes perfect sense: as bitcoin mining becomes less profitable, giving AI companies with infrastructure is an obvious and simple way to close the gap (until things get better). Bitcoin miners have constructed sturdy data centers with attractive energy contracts.

KEY METRICS

Total Crypto Market Cap : $2.65T

Bitcoin Market Cap : $ 1.32T

Ethereum Market Cap : $ 421.48B

ETH/BTC Ratio : 0.05

Ethereum Gas Price : 3 gwei

DeFi TVL : $156.94b

Fear and Greed Index : 25 (Extreme Greed)

Federal Reserve Balance Sheet : $7.22 T

BATTLE OF THE BULL AND BEAR

Three weeks after Bitcoin went on sale, Germany just has nine thousand remaining.
After a sizable quantity of money was transferred to Coinbase, Bitstamp, and Kraken, Germany’s Bitcoin stack momentarily fell below 5,000 BTC, but it has since recovered somewhat. Just 18% of the original amount remains in the German government’s Bitcoin wallet, which now has 9,094 Bitcoin following the most recent round of back-and-forth transfers to cryptocurrency exchanges on July 11.

When Bitcoin fails twice to cross $60K, the index plunges into “extreme fear.”
For the first time since January 2023, Bitcoin’s Fear & Greed Index has dropped to “extreme fear” as the cryptocurrency battles to regain a critical price level. The announcement that Mt. Gox has begun repaying its creditors since July 5 has been associated with a recent negative attitude, perhaps causing up to $8.5 billion worth of Bitcoin to be released onto the market. Furthermore, a significant portion of the recent decline in the price of Bitcoin has been attributed to huge sales made by the German government, which recently transferred 16,254 BTC, or $935 million at current levels, to exchanges and market makers.

$108 trillion will be traded in cryptocurrency in 2024, with Europe leading the way.
By 2024, it is expected that the volume of cryptocurrency trading would have surpassed $108 trillion, with Europe leading the globe in transaction value and Binance being the most popular exchange globally. Global cryptocurrency trade is only getting started, as a CoinWire analysis estimates that by the end of 2024, industry transaction volume would surpass $108 trillion. The end-of-year forecast is 90% greater than in 2022, according to the report. With an estimated cryptocurrency trade volume of more than $2 trillion for the year, the United States is in the lead.

Analyst: This bull cycle, the price of bitcoin will reach $330,000.
As Bitcoin falls below $60,000, institutions are purchasing, which supports the long-term optimistic prognosis for the price of BTC. Arsen, an independent market expert, is undaunted by the recent decline in the price of Bitcoin and believes that the current bull cycle will see a massive rise to $330,000.Wealthy people are hoarding Bitcoin. According to Arsen, Bitcoin BTC has been amassed by wealthy individuals, market analysts, and other financial gurus.

With $10 billion in Ethereum ETF inflows, ETH might reach all-time highs — Analyst
It is anticipated that the spot price of ETH would react to ETF inflows more quickly than that of BTC. Ether exchange-traded funds (ETFs) are expected to draw in up to $10 billion in new investors in the months following their launch, propelling Ether prices to record highs by the year’s end.

WEEKLY REVIEW OF IC15

The global cryptocurrency market was volatile and traded flat. The IC15 Index was flat at 74,479 at 4 p.m. Avalanche lost the most in the Index, with 4.80% down, followed by Toncoin, Solana, Chainlink, and Bitcoin in the 0–3% range. The major gainers were Tron, Litecoin, Cardano, and Polygon in the 1–4% range.

A Bank for International Settlements (BIS) survey reveals that 86 central banks worldwide are exploring CBDC to enhance payment mechanisms and financial stability and support monetary policy. The Bank of Israel is waiting for the European Union and other advanced economies to launch their CBDCs before introducing their own.

Goldman Sachs announced the launch of three tokenization projects by the end of 2024. The bank targets money market funds and real estate for tokenization to enhance investment opportunities. Asia and Africa witnessed the highest level of growth in the share of crypto startups launching, with a 26.8% share in the first half of 2024.

The Nigerian government plans to establish tech research centres for emerging technologies involving artificial intelligence (AI), the Internet of Things (IoT), and blockchain technology across the nation’s six geopolitical zones. The United Nations Development Programme (UNDP) partnered with the Dfinity Foundation to improve financial access for Micro, Small, and Medium Enterprises (MSMEs) by leveraging blockchain technology.

WEEKLY SPOTLIGHT

The price of cryptocurrencies fluctuated and traded flat on a worldwide scale. At 4 p.m., the IC15 Index stood at 74,479, unchanged. With a 4.80% decline, Avalanche suffered the largest loss in the Index, trailed by 0–3% losses for Toncoin, Solana, Chainlink, and Bitcoin. In the 1–4% range, Tron, Litecoin, Cardano, and Polygon were the biggest gainers.

In order to improve payment systems, maintain financial stability, and support monetary policy, 86 central banks worldwide are looking into CBDC, according to a Bank for International Settlements (BIS) survey. The Bank of Israel is holding off on creating its own CBDC until the European Union and other developed economies have launched theirs.

By the end of 2024, Goldman Sachs plans to introduce three tokenization projects. To improve investing choices, the bank plans to tokenize real estate and money market funds. The percentage of cryptocurrency firms launching increased at the fastest rate in Asia and Africa, reaching 26.8% in the first half of 2024.

Throughout the country’s six geopolitical zones, the Nigerian government intends to build tech research centers for cutting-edge technologies including blockchain, IoT, and artificial intelligence (AI). By utilizing blockchain technology, the United Nations Development Programme (UNDP) and the Dfinity Foundation are working to increase financial access for Micro, Small, and Medium-Sized Enterprises (MSMEs).