Bitcoin’s hashrate, a key measure of mining difficulty, has broken down from an 18-month uptrend, suggesting potential miner capitulation.
The true hashrate recently fell to around 600 exahashes per second (EH/s).
This breakdown might indicate that some mining firms are selling their BTC, as noted by Ki Young Ju, founder and CEO of CryptoQuant.
He stated in a June 13 X post, “Bitcoin hash rate’s 18-month upward trend has broken, suggesting some miners are capitulating.”
However, data shows that Bitcoin mining firms haven’t been selling significant amounts of Bitcoin despite the drop in hashrate.
According to CryptoQuant, miner flows to cryptocurrency exchanges decreased from a monthly peak of 15,470 BTC on May 21 to just 7,239 BTC on June 13.
The recent decline in Bitcoin’s price, falling from over $71,100 on June 5 to $66,800, doesn’t appear to be driven by miner capitulation.
Instead, the price drop occurred while daily miner flows to exchanges continued to decline.
The decline in hashrate could be due to mining firms turning off older generation ASIC chip mining rigs, which have become unprofitable since the fourth Bitcoin halving.
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On June 12, Bitcoin’s total hashrate fell to 586,377 terahashes per second (TH/s), according to Blockchain.com.
An April 19 report by CoinShares predicted this temporary drop, forecasting the hash rate to rise to 700 exahash by 2025 but potentially falling by up to 10% post-halving as miners shut down unprofitable ASICs.
The report attributes the temporary reduction to increased mining costs due to the halving and rising electricity prices.
The profitability of mining operations largely depends on electricity costs.
According to a May 2 X post by Hashrate Index, older ASIC models like the S19 XP and M50S++ operate at a loss if electricity costs exceed $0.09 per kilowatt-hour.
The S19j Pro+, j Pros, and M30S++ will struggle if costs are between $0.06 and $0.07 per kilowatt-hour.
The situation underscores the delicate balance between mining profitability and operational costs, with electricity prices playing a crucial role in the sustainability of mining operations.
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American software technology firm MicroStrategy has announced the pricing of a new $700 million debt offering due in 2032, intended to fund further Bitcoin purchases.
The official press release states that the notes will be sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933.
Initially announced at $500 million, the offering has been increased to a $700 million aggregate principal amount.
MicroStrategy plans to allocate part of the proceeds to acquiring more Bitcoin for its corporate treasury.
The company has already amassed 214,400 BTC, valued at approximately $14 billion, according to its Q1 2024 financial results.
These notes, which are unsecured senior obligations of MicroStrategy, will bear interest at a rate of 2.25% per annum.
Interest will be payable semi-annually in arrears on June 15 and December 15 each year.
The notes will mature on June 15, 2032, “unless earlier repurchased, redeemed or converted” as per their terms.
“Subject to certain conditions, on or after June 20, 2029, MicroStrategy may redeem for cash all or any portion of the notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed.”
MicroStrategy estimates that the net proceeds from the sale will be approximately $687.8 million after deducting initial purchasers’ discounts, commissions, and estimated offering expenses.
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If the initial purchasers exercise their option to purchase additional notes in full, the total proceeds could reach around $786 million.
“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional Bitcoin and for general corporate purposes.”
This move follows the firm’s announcement on June 13 to raise $500 million through a similar offering.
The expansion to $700 million underscores the Bitcoin-maxi firm’s strategy to strengthen its BTC holdings and position in the crypto market.
It’s important to note that since the notes are sold under Rule 144A of the Securities Act of 1933, they will not be officially registered with the United States Securities and Exchange Commission (SEC).
Notes traded under Rule 144A cannot be sold or bought in public markets without meeting SEC legal prerequisites.
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Major financial institutions on Wall Street should be held responsible for bankrolling the emissions-heavy Bitcoin mining industry, according to a new report by Greenpeace USA.
The report, titled “Bankrolling Bitcoin Pollution: How Big Finance Supports a New Climate Threat,” diverges from previous Greenpeace papers on the Bitcoin mining industry. Instead of focusing on BTC miners, the report targets Wall Street and the banking sector.
Greenpeace claims that big finance supports Bitcoin mining by creating economic incentives, thereby perpetuating the ecological threat the industry represents.
The report names Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard, and MassMutual as the top five financiers of carbon pollution from Bitcoin mining companies.
Together, they accounted for over 1.7 million metric tons of CO2 in 2022, equivalent to the emissions of over 335,000 American homes using electricity for a year.
Greenpeace stated that Bitcoin mining has grown into a large commercial industry, where companies need significant capital to build facilities and purchase computing equipment.
Miners rely on support from banks and asset managers, eager for their share of the spoils.
The report says companies such as BlackRock should be accountable for fostering the mining industry: “Banks and asset managers have a duty to disclose risks to their shareholders and clients who are currently missing vital information on the climate risks from Bitcoin.”
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Greenpeace criticizes the lack of scrutiny regarding how investments from traditional finance companies enable carbon-intensive Bitcoin mining operations.
Greenpeace also states that the crypto mining industry lacks disclosure and transparency, which “enables Bitcoin mining companies to avoid accountability and obscures the scale of Bitcoin’s climate problem.”
This “lack of reputable electricity and emissions reporting” makes it difficult for investors, stakeholders, and regulators to make informed decisions if they wish to follow green policies.
In the United States, Texas has become a global hub for Bitcoin miners, absorbing many who abandoned China after its mining ban.
Greenpeace accuses Wall Street companies of financing this new gold rush, highlighting Riot Platforms’ facility near Rockdale as an example.
Citing data from the Cambridge Bitcoin Electricity Consumption Index (CBECI), Greenpeace said that the Riot facility alone accounted for 526,000 metric tons of CO2, equivalent to the carbon emitted from 100,000 U.S. homes a year.
Greenpeace highlighted the paradox of BlackRock, which is a supposed leader in sustainable investment, yet had the third-highest carbon emissions from its investments in Bitcoin mining among the 540 financial institutions in Greenpeace’s study.
The NGO emphasized that financial companies involved in Bitcoin mining should report the emissions associated with their investments and underwriting services for Bitcoin mining companies.
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Investment firm Kerrisdale Capital has launched a critical campaign against Bitcoin miners, labeling the industry as “snake oil salesmen.”
Their latest report targets Riot Platforms, claiming it is “headed for a mine collapse.”
Kerrisdale’s CEO, Sahm Adrangi, discussed their position with Cointelegraph.
“When you don’t have a viable business model — and we see this in the public markets all the time — if you’ve got a business that you know is structurally unprofitable, these companies dilute,” said Adrangi. “They issue shares, they take those shares to invest in the business. But there are no returns.”
According to Kerrisdale, Riot issued $41 million in shares in the first four months of 2024, diluting stock by 18%.
Adrangi argued, “These are not viable business models. The [United States mining] businesses are structurally screwed — the industry is one of the worst I’ve ever seen.” Kerrisdale has taken a short position on Riot.
In response, Riot refuted these claims, stating, “We disagree with the characterization of the Bitcoin mining industry and of Riot, and the equally unsound conclusions reached in the Kerrisdale Capital report.
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“We believe these errors will be demonstrated through the execution of our ambitious 2024 growth plans and resulting financial performance.”
Despite efforts to contact other U.S. Bitcoin mining firms, none were available to comment. Cointelegraph also spoke with William Foxley of The Mining Pod, who offered a contrasting view.
“Bitcoin mining in the U.S. is incredibly bullish, especially with another Trump presidency,” said Foxley, highlighting potential political support and state-level protections for miners.
Kerrisdale criticized Texas’s energy policy towards Bitcoin mining, citing recent decisions against tax reductions for Riot’s projects and rising energy costs affecting residents.
Adrangi commented, “This whole idea that these Bitcoin miners are good for the grid. It’s such a tortured thought process, and I can’t believe people actually buy into it.”
Kerrisdale has also contacted state legislators, urging them to deny future abatements for Riot.
They referenced safety concerns at Riot’s Rockdale facility and the use of non-approved cooling fluids. These efforts led to an initial drop in Riot’s stock price, though it has since stabilized.
Despite Kerrisdale’s aggressive stance, Riot has garnered support from former President Donald Trump, who advocated for Bitcoin mining in the U.S. as a defense against a central bank digital currency (CBDC). Adrangi, however, remains skeptical of Trump’s influence on the industry’s viability.
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Bitcoin narrowly missed a fresh assault on the $69,000 mark at the June 13 Wall Street open as markets showed caution in the face of the latest U.S. inflation data.
Data from Cointelegraph Markets Pro and TradingView indicated that Bitcoin briefly surged to $68,433 on Bitstamp before retreating.
This short-lived spike coincided with the release of the U.S. Producer Price Index (PPI) for May, which came in lower than expected, signaling a slowdown in inflation.
While this could be seen as positive for risk assets and cryptocurrencies, Bitcoin’s reaction was muted compared to the previous day’s data releases.
Jobless claims, which also beat expectations, similarly failed to boost market sentiment.
Commenting on the situation, popular trader Skew suggested that market sentiment could shift dramatically during the U.S. session.
“Market is confused & chicken here imo,” he tweeted.
“Next few hours will be interesting.”
Skew also observed that despite the PPI-related dip, the U.S. dollar did not show significant volatility.
The U.S. Dollar Index (DXY) was at 104.79 at the time, having briefly dipped to 104.64.
“It’s what we usually see,” fellow trader Dann Crypto Trades remarked on his X account, reflecting on the BTC price reaction.
“Looking ahead, trading firm QCP Capital expressed optimism about U.S. financial policy for the rest of 2024.
“FED’s dot plot remains ambiguous, making it challenging to predict whether officials prefer one or two rate cuts this year,” it stated in its latest Telegram update.
“However, we anticipate a rate cut in September, with the FED likely adopting a wait-and-see approach for subsequent meetings in November and December.”
QCP also highlighted the potential approval of spot Ether exchange-traded funds (ETFs) as a bullish factor amidst the expected macro shifts from Fed rate cuts.
“We maintain a structurally bullish outlook for the remainder of the year, driven by the anticipated ETH ETF S-1 approval and potential rate cuts in September and year-end,” it confirmed.
Thus, while the immediate market reaction was subdued, the broader outlook for Bitcoin and Ether remains optimistic amid expected policy shifts and regulatory developments.
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Bitcoin spiked higher as the June 12 Wall Street session opened, following an unexpected drop in United States inflation data.
Cointelegraph Markets Pro and TradingView reported a quick BTC price surge to $69,636 on Bitstamp.
Bitcoin jumped by $1,500 within seconds, driven by the May Consumer Price Index (CPI) report showing inflation cooling faster than anticipated.
Month-on-month CPI remained unchanged, while the year-on-year figure was 3.3%, both 0.1% below expectations.
“The all items index rose 3.3 percent for the 12 months ending May, a smaller increase than the 3.4-percent increase for the 12 months ending April.
The all items less food and energy index rose 3.4 percent over the last 12 months,” confirmed an official press release from the U.S. Bureau of Labor Statistics.
This result was a positive development for risk assets, including cryptocurrencies, which had faced challenges leading up to the CPI release, a typical pattern for Bitcoin and altcoins.
Markets were now focused on the upcoming June meeting of the Federal Reserve’s Federal Open Market Committee (FOMC), scheduled for later in the day.
The meeting would address interest rate decisions and feature economic commentary from Fed Chair Jerome Powell, crucial for market sentiment.
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Financial commentator Tedtalksmacro responded optimistically to the latest developments, suggesting that the CPI data might allow Powell to consider easing the tight financial policies characterized by high rates.
“The stage is set for J Powell to talk easing. Let’s go,” he summarized on X (formerly Twitter).
Michaël van de Poppe, founder and CEO of trading firm MNTrading, highlighted the declining U.S. dollar strength following the data release.
“The Dollar and Treasury Yields are dropping significantly as the markets are expecting rate cuts to be happening,” he noted.
Bitcoin thus recovered the losses incurred from U.S. employment data released the previous week.
More economic figures were expected by the end of the week, potentially leading to further BTC price volatility.
The latest projections from CME Group’s FedWatch Tool indicated shifting market expectations for rate cuts, with the probability of a rate cut at the September FOMC meeting rising to over 70%.
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Bitcoin returned to hover around $67,500 on June 12 after a broad sell-off in the cryptocurrency market led to significant exchange withdrawals.
Data from Cointelegraph Markets Pro and TradingView indicated that Bitcoin’s price action steadied as markets prepared for upcoming U.S. macroeconomic events.
Bitcoin had dropped to $66,000 the previous day, triggering long liquidations amounting to over $50 million, according to monitoring resource CoinGlass.
These events followed a familiar pattern seen before Federal Reserve meetings on interest rates, with the latest meeting and the May Consumer Price Index (CPI) release both scheduled for the day.
Reacting to this, many traders noted the typical BTC price behavior, noting that BTC/USD was positioned at a crucial resistance point just below all-time highs.
“Same accounts on CT start calling for higher.
“Saying 100k is programmed.
“Saying we’re gonna break out and leave the bears behind.
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“When the fact is that $BTC has just been trading in a range for 3 months,” popular trader Follis summarized in a post on X.
As Cointelegraph reported, some analysts anticipated further downside towards $60,000 if market bid dynamics remained unchanged.
At the time of writing, CoinGlass data indicated liquidity building around $65,700 on the downside, with $67,700 emerging as the primary resistance level to surpass.
“History prevails,” popular trader and analyst Rekt Capital stated, comparing this BTC price cycle to previous ones. “Bitcoin was not able to breakout this early in the Post-Halving period, as history suggested.”
On-chain data also highlighted ongoing exchange withdrawals, with Coinbase, the largest U.S. exchange, particularly notable.
The total BTC balance on Coinbase Pro decreased by 14,420 BTC ($972 million) in the 24 hours up to the time of writing, continuing a trend of declining exchange balances previously reported by Cointelegraph in early June.
In the 30 days leading up to June 12, Coinbase saw a reduction of over 38,000 BTC, with overall exchange balances reaching their lowest point in seven years.
On-chain analytics platform Glassnode reported the net transfer volume from exchanges on June 11 at 17,967 BTC ($1.21 billion).
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On June 11, Bitcoin experienced a 2.5% drop from its daily high of $69,547 to a low of $66,018. Ether faced a slightly larger decline, falling 2.58% to $3,500.
This downturn in the crypto market severely affected leveraged trades, wiping out almost $200 million.
Data from crypto analytic firm CoinGlass revealed that over the past 24 hours, 83,912 traders were liquidated, totaling $190.97 million in liquidations.
The largest single liquidation order occurred on OKX, involving an ETH/USDT swap worth $5.21 million.
When a trader cannot meet margin requirements or lacks funds to sustain an open position, an exchange will liquidate a leveraged position, leading to a partial or complete loss of the trader’s initial margin.
Bitcoin traders suffered the most, with $46.9 million in liquidations over the past 24 hours, including $36.8 million in long positions and $14.07 million in short trades.
Ether traders saw the second-largest liquidation, totaling $41.0 million, with $31.3 million in long positions and $9.68 million in short trades.
This wave of liquidations follows a previous significant event on June 7, when the crypto market saw $400 million in liquidations.
The recent market correction and subsequent turmoil in the leveraged markets are attributed to the upcoming May Consumer Price Index (CPI) report and the Federal Open Market Committee (FOMC) meeting on June 12.
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Historically, CPI data releases and FOMC rate changes have caused volatility in the crypto market as investors seek to reduce risk.
Currently, the 30-day correlation between the crypto market and U.S. equities is at its highest since 2022.
When the CPI rises, Bitcoin generally declines in price.
The overall digital asset market is similarly affected, as higher prices on necessities reduce people’s discretionary income, leaving less money available for investment.
Reports suggest that the FOMC is expected to keep the interest rate unchanged, maintaining the benchmark lending rate between 5.25% and 5.50%.
Meanwhile, CPI data is anticipated to remain within the 0.1% to 0.3% range.
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Bitcoin fell below $67,000 as the Wall Street market opened on June 11, experiencing a classic pre-inflation report downturn.
Data from Cointelegraph Markets Pro and TradingView indicated that Bitcoin reached new local lows of $66,696 on Bitstamp, marking its worst performance of the month.
After nearly 24 hours of continuous decline, Bitcoin could not reverse the trend, with risk assets bracing for a flood of U.S. macroeconomic data and Federal Reserve commentary.
BTC/USD was down 3.6% on the day, with traders targeting further declines potentially reaching $60,000.
“Getting closer to support.
“Will be looking to enter longs if a reversal presents itself,” popular trader Roman informed his subscribers on X.
“Ultimately I’ve been eyeing the 67k support for over a week so it’s about time we’re getting close.”
Another trader, Castillo Trading, agreed but focused on a slightly lower buy zone around $64,000.
“We knew some downside was possible on $BTC. Was hard to open up fresh longs above $70,000.
“Now, we are getting into an area I am more willing and comfortable looking to add,” stated a post on X.
Others advised calm amid the overall range-bound price action, noting that Bitcoin has been consolidating below all-time highs for nearly three months.
“Week 15 of chopping below the current all-time highs,” popular trader Jelle observed.
“We’re off to a red start this week, pushing back into the key support level at $67,500.
“May be uncomfortable, but nothing has changed.
“Don’t get shaken out.”
Trader, analyst, and podcast host Scott Melker called the recent price action “much ado about nothing.”
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“Decent drop today, but simply testing support at the range EQ – still trading in the top half of the range.
“3 months into the predictable chop that comes with this part of the cycle,” he explained.
A note of caution was issued by market observers monitoring open interest (OI) on derivatives markets.
OI reached new all-time highs in June, surpassing $37.6 billion, which traditionally signals potential BTC price volatility.
Bitcoin futures OI fell as the price retreated, according to CoinGlass data, but remained above $35 billion.
Filbfilb, co-founder of trading suite DecenTrader, summarized, “Price flat, OI up $1.5bn. High-risk situation.”
Filbfilb also presented a “worst-case scenario” for BTC/USD, suggesting downside wicks could reach as low as $45,000.
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Bitcoin traded below $68,000 during the June 11 Asia trading session, with analysis predicting further BTC price declines.
Data from Cointelegraph Markets Pro and TradingView showed a 3% drop, bringing Bitcoin to lows of $67,320 on Bitstamp after the daily close.
Failing to maintain support at the crucial $69,000 level, Bitcoin bulls couldn’t prevent a downward slide due to thin exchange order book liquidity.
The previous day, Keith Alan, co-founder of trading resource Material Indicators, cautioned that insufficient bids might signal weak BTC price strength.
“Sure we have some laddered bid support in here, but not a heavy, heavy concentration of it — and really, it’s not even heavy down to $60,000 if I can be completely honest,” he mentioned in his latest YouTube update.
An accompanying chart illustrated order book liquidity for the BTC/USDT pair on Binance, the largest global crypto exchange.
In a subsequent post on X, Material Indicators noted that with the latest move down, Bitcoin had formally rejected $69,000 as support and lost the 21-day moving average, a crucial short-term trendline.
“Support at the 21-Day Moving Average and the R/S Flip at $69k have both been invalidated,” it read.
“This move isn’t over. In fact, I expect these killer whale games to continue up to and through JPow’s comments on Wednesday and economic reports on Thursday.”
As Cointelegraph reported, the week’s main potential volatility catalyst for Bitcoin and crypto price action is U.S. macroeconomic data — the Consumer Price Index (CPI) and Producer Price Index (PPI) — along with the Federal Reserve’s latest interest rate decision and accompanying press conference by Chair Jerome Powell.
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“So far CPI/PPI has been around the highs of this range & FOMC resulting in local lows,” popular trader Skew commented.
“Interesting few days ahead.”
In his market analysis, fellow trader and commentator Credible Crypto suggested that the outcome of the down move may not be as drastic as a drop to $60,000.
With large-volume traders adding and pulling liquidity at will, appetite for BTC might prevent bulls from falling below $65,000.
“We continue to see spot absorption on each and every move down, even on lower timeframes,” he summarized to X subscribers.
Credible Crypto noted that overhead resistance at $72,000 had been “pulled immediately” once Bitcoin began reversing.
“What are the odds we front run range lows and 62-65k and just reverse from here? I think they are decent,” he concluded.
“No guarantees of course, but we will know soon enough with developing PA over the next 24 or so hours.”
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