Bitcoin - Page 80

To say Bitcoin has dominated the crypto headlines of late would be an understatement. Even setting aside the SEC’s landmark approval of multiple spot bitcoin exchange-traded funds (ETFs) in January, BTC enthusiasts have had plenty to celebrate with the asset’s value growing by almost 15% in the last fortnight.

With the fourth quadrennial Halving coming up, Bitcoin’s Layer-2 ecosystem is also enjoying a moment in the sun, smashing several significant milestones that underscore the appeal of solutions built on Satoshi’s network. At long last, supporters of the blockchain have more than the “digital gold” narrative to trumpet: Bitcoin-based DeFi solutions are proving a smash hit. 

Bitcoin L2 Comes of Age

As with Ethereum, Layer-2s on Bitcoin run atop the main chain with the goal of increasing its capacity to process transactions. These auxiliary networks, and the dApps they support, essentially build out the architecture of Bitcoin and broaden the appeal of its ecosystem. 

When DeFi took off in 2020, Ethereum activity exploded and a number of Layer-2s (Arbitrum, Optimism etc) subsequently appeared offering superior throughput, lower costs, chain specialization, and dApp utility. The idea that Bitcoin L2s could follow a similar trajectory is undeniably appealing to BTC maxis.

Although Bitcoin L2s are at a much earlier stage than the preponderance we see on Ethereum, they are growing at a rapid rate. Payments on the Lightning Network, one of the best-known L2 solutions designed to lighten the load on the main chain, have grown by over 1200% in two years. Recent hype around BTC has also seen other significant developments.

Stacks, a Layer-2 network enabling smart contracts and dApps to use Bitcoin as a secure base layer, has been one of the big winners. The Total Value Locked (TVL) on Stacks surpassed all-time highs in January, peaking at $63 million on the day the ETFs were green-lit. Another L2 project, Rootstock, also hit its highest TVL in two years.

The feel-good factor extends to solutions anchored to L2s, like StackingDAO, a liquid staking protocol operating on Stacks. In just a month, the project became the second-largest DeFi protocol on Stacks by TVL, with over 10 million $STX tokens locked. 

BitFlow, a native Bitcoin DEX, has also announced $2m TVL in its $stSTX LSD pool. Liquid staking derivatives – which let users access the liquidity of staked tokens that would otherwise be locked in a smart contract – was a major trend last year, with Lido becoming the single biggest defi dApp on Ethereum. 

Given how many bitcoiners simply hodl their satoshis, LSDs – which let them stake for yield and put their capital to use in DeFi – could end up at the center of a veritable BTC L2 boom.

The recent uptick in Layer2 activity on the Bitcoin network is a sight to behold. The emergence of projects that advance the network’s utility through sophisticated L2 solutions seems destined to unlock new BTC use cases and accelerate demand for digital gold. If Bitcoin-based L2s can replicate those that spawned from Ethereum, the next 18 months will prove very interesting.

Like clockwork every four years, Bitcoin’s mysterious creator Satoshi Nakamoto programmed the world’s dominant cryptocurrency to go through a dramatic supply squeeze known as the halving (or “halvening” if you want to sound really crypto-native). As if controlled by the mystical gods of blockchain themselves, the amount of shiny new bitcoin entering circulation gets abruptly chopped in half. poof Just like that.

And so as 2024 continues ticking by, cryptocurrency project teams across the land find themselves facing yet another BTC halving event – the third in Bitcoin’s relatively brief but wild history. If past halvings are any indication, the impending slash to supply should rocket BTC’s price into a new all time high – or at least, that’s what 84% of investors think will happen.

As such, the halving presents an opportunity for crypto projects to make sure their unique brands stand out – before the Bitcoin mothership takes off without them.

Refresh Your Project’s Branding and Messaging

Like an ageing rock band embarking on a reunion tour, many a crypto project kicking around since the last halving bear signs of showing their age – tired branding, recycled messaging, questionable colour schemes. Before stepping back in the spotlight for their halving encore, these projects would be wise to nip and tuck their aesthetic elements as well as craft marketing narratives that better resonate in today’s Web3 landscape. 

No one wants to listen to musical acts that refuse to release new songs or at least go back and remaster the old ones. Savvy crypto projects understand the importance of polishing up their unique value propositions and tying them to the latest crypto developments (i.e. the halving) rather than relying on dated materials that fail to excite. Out with the old, in with the bold.

Step Up Your PR Game

In the frequently scam-ridden world of crypto, establishing trust and credibility remains a towering obstacle for projects seeking adoption. And with the terabytes of information overload numbing people’s minds in today’s digital era, cutting through the noise to stand out presents its own unique challenges. 

Crypto projects are thus wise to step up their PR game as the next halving chapter approaches. While cryptonative journalists and podcasters love the tech, they crave the story and personality behind the project even more. Founder interviews, guest articles in niche publications, and unique angles that highlight new integrations or developments are the types of inbound marketing plays that catch reporter eyes. 

And don’t forget press releases blasted out through crypto press release distribution services – those can help plant your credibility-establishing messages in front of the right audiences at the right time. This is a vital strategy for long term success in the volatile world of Web3. 

Ramp Up Community Engagement Efforts

Unless they fancy themselves fading into irrelevance, crypto project teams would be immensely unwise not to tap into and re-energise their grassroots communities as the 2024 halving approaches. Those communities represent their most valuable mechanism for long-term growth amidst the inevitable adoption hype halvings fuel. 

Projects should host frequent AMA sessions, run creative social contests and giveaways utilising their native tokens, and provide other incentives to strengthen contributors’ attachment. These cultivation moves build loyalty while organically surfacing ideas for desired features and user experience upgrades directly from users themselves. 

Smart crypto platforms even graduate especially talented community members into more formal roles — admins, subreddit mods and brand ambassadors who can spread the word. Converting standout supporters into leadership positions in this way activates the perfect candidates to manage the next waves of adopters Bitcoin’s proposed price explosions will soon attract into the community.

Increase Exposure Through Advertising and Cross-Promotions 

As the next Bitcoin halving approaches, creating hype and visibility for crypto projects will be key. This is the time to focus on widening your exposure through smart advertising and partnerships.

Consider splurging a little on native ads in popular crypto publications – that targeted audience needs to hear about you. Work out some affiliate deals with leading crypto YouTubers and podcasters in the hope that their influential sway will rub off on you. And don’t forget about cross-promotions with complementary crypto projects. A little ambassador and creator camaraderie can go a long way.

And once again, remember to double down on building your social media and community channels. That’s where curious followers will come knocking when Bitcoin hits fever pitch. Getting as many eyes on your crypto project as possible needs to take top priority for every marketer’s game plan leading up to the halving. When hype builds, you wanna be on their radar.

Polish Your Whitepaper 

A crypto project’s whitepaper operates much like a band’s discography – its comprehensive documentation of the technical vision, product roadmap, tokenomics, and other key details. As the crypto crowd swells heading into the next halving-powered hype cycle, projects would be remiss not to polish up those vital historical records. 

That means integrating new developments, ensuring branding and messaging sync with the papers’ contents, and potentially even creating supplementary “greatest hits” materials like one-pagers, lite papers, or help docs for simplified consumption. Outdated whitepapers risk losing relevance as interest resurges, so a little spring cleaning of the core literature can freshen things up as interest and scrutiny compounds from both existing and new community members.

Final Word

The impending 2024 halving signals a pivotal moment for crypto projects to shine a spotlight on their unique value propositions before Bitcoin once again dominates attention. By taking proactive steps to refresh branding, boost community engagement, expand visibility channels, and polish underlying literature, projects can ride the rising interest into the halving event on positive momentum. 

The compounding awareness should lead to stronger communities, accelerated adoption and partnerships, and greater resilience to weather any crypto winter that may follow Bitcoin’s price peak. 

On February 7, the total daily trading volume for spot Bitcoin exchange-traded funds (ETFs) surpassed a billion dollars, with BlackRock taking the lead.

Bloomberg Intelligence analyst James Seyffart noted a significant surge in trading activity for BlackRock’s iShares Bitcoin Trust (IBIT), which amassed a daily trading volume of $341.2 million, outstripping the Grayscale Bitcoin Trust’s $296.5 million, according to Seyffart’s analysis.

Fidelity’s FBTC fund secured the third position with a trading volume of $200 million, while the remaining seven funds collectively contributed $188 million, culminating in a daily trading volume exceeding a billion dollars.

Despite this milestone, Seyffart downplayed its significance, stating that surpassing the billion-dollar mark “isn’t that big of a deal” for Bitcoin ETFs.

He clarified that while it represented an increase from recent days, it still fell short of the initial trading weeks.

READ MORE: Crypto Wallets Tied to FTX and Alameda Transfer $38.8 Million to Exchanges Since January 2024

In a notable trend, inflows into spot Bitcoin ETFs have consistently outpaced outflows from GBTC for the ninth consecutive day.

On February 7, preliminary data from Farside revealed $81 million in outflows from GBTC, contrasted with $226 million in inflows across the other nine spot Bitcoin ETFs, resulting in net flows of $145 million.

BlackRock witnessed an inflow of $56 million, Fidelity’s fund saw an increase of $130 million, and Bitwise experienced inflows of $21 million.

On February 8, investor and author Fred Krueger highlighted a significant observation: the combined BTC holdings of the newly launched nine ETFs were poised to exceed those of MicroStrategy, the largest corporate holder of the asset.

The ETF funds collectively held approximately 187,000 BTC as of February 7, slightly below MicroStrategy’s holdings of 190,000 coins valued at over $8 billion.

In a related development, it was reported that Fidelity had begun allocating spot Bitcoin to their All-in-One Conservative ETF. ETF analyst Eric Balchunas regarded this move as a positive sign, particularly in the conservative investment domain.

Discover the Crypto Intelligence Blockchain Council

Serhii Tron, founder of White Rock Management, one of the largest mining companies in the world, spoke on the current state of the crypto market, and shared his vision of what comes next this year

What are the most valuable lessons we can learn from 2023?

What’s most important – and quite obvious for everybody – is that the crypto winter, the topic that so many people fueled their devastating forecasts with in 2022, is over and done with. A stone-cold fact, which I am not sure why anybody has any reason to question. The market did have to plough through a lot, but last year, the price of bitcoin leapt by 150%, and hit a $44 thousand mark. There were, of course, some corrections and fallbacks, however, the outcome is still very much on the bright side, so there are few people bringing up the $17 thousand indicator from November 2022.

BTC capitalization once again exceeded $816 billion. If you look at the entire market, you can see the capitalization growth of 2023 was a solid 108.1% – from $829 billion to $1.72 trillion, with the annual trade volumes reaching $36 trillion. Doesn’t feel like winter to me.

Were the external factors involved?

Naturally, there were many things at play, for the crypto market does not exist by itself. Back in 2022, world regulators had to handle the aftermath of the COVID-19 pandemic and forced monetary emission (to help businesses stay afloat and keep the wolf of the global crisis at the door) – monetary policies had to tighten in order to keep the global inflation at bay. Very active in this endeavor was the U.S. Federal Reserve, which raised their basic rates. But, by the end of 2023, the Feds softened a bit, with the consumer prices gradually going down.

Two major events took place in the United States: at the year’s start, the state regulator had to interfere and save the banks in distress (Silicon Valley Bank, Signature Bank) by means of its own Bank Term Funding Program (BTFP), which basically means a lot of money (around $400 billion) had to be pumped into the failing institutions; as the monetary policies eased up a little, the said money incrementally spread across the markets. For the loan and stock markets, and crypto market to boot, the money influx worked like a charm. Dollar instruments’ profitability decreased, but it went up in our segment, hence it feels like a natural order of things, all things considered.

Declining unemployment rates across the world and GDP growth were some other positive factors. Geopolitical tensions are still on the rise, though. I’m speaking about not only military actions in Ukraine and Israel, but the attacks on ships in the Red Sea, and bad blood between North/South Korea, and China/Taiwan.

On the bright side, people happened to notice the financial regulators are pretty interested in crypto. I am, of course, talking about the scandals and law suits against several crypto-dealing enterprises after FTX closure, which made a lot of market players really worried. Some even said it was about to bring the eternal winter upon our market. Which did not happen, by the way, as we soldiered on. I believe that, at least in part, it was possible thanks to the settlement that one of the world’s largest platforms Binance agreed to. Even though the company was fined, this solution is widely considered the optimal choice under the very tricky circumstances. The court hearings on another stock market (Coinbase) are still afoot, but we stay hopeful that both sides can also come to an agreement.

Do you think the state authorities will keep on pushing?

Most certainly, yes. Not in a bad way only, though, by imposing even more pressure and limitations. We can see that many regulators remain unmoved, and are dead-set to not accept crypto for what it is. However, it is pretty much common understanding that digital assets are the future. It doesn’t need to be fought; it needs to be reasonably regulated instead.

Yes, the regulations must be reasonable: measures of control need to be in place so that bitcoin and other coins are not used in arms deals and drug trade; the investors need to be protected from scoundrels and thieves. That being said, excessive regulations need to perish, for they only hold back development of the market and some necessary instruments.

Are you now speaking of the 10-year war with the U.S. regulator for BTC ETFs?

I’m now speaking in general. Surely, BTC ETFs implementation in the United States took way longer than it should have, and it definitely should have happened much sooner. However, hats off to the U.S. Securities and Exchange Commission (SEC) for what they did in January 2024. The entire market has been anticipating this move since the summer of 2023, when BlackRock applied for this instrument after the watershed court ruling in the Grayscale Investments case: this one company was the sole most persistent proponent of this instrument, and basically served as a trailblazer for the market as a whole.

I would like to point out, though, that many political figures warmed up to the crypto market last year. Robert Francis Kennedy Jr. (nephew of the legendary 35^th U.S. President JFK), Democratic Party member and U.S. presidential candidate, openly supported crypto, and was the one to admit that bitcoin can back up the dollar exchange rate; he also compared BTC to gold. A lot was done in terms of lobbying and legislation by the U.S. Senator (Rep) Cynthia Lummis. Another vocal supporter of crypto is Javier Milei, the new President of Argentina, who’s put his team on a mission of crypto popularization in his home country. There are more politicians in favor of cryptocurrency: Lichtenstein’s Prime Minister, Minister of Finance Daniel Risch, leader of the Polish party “Porozumienie” (previously “Polska Razem”) Jarosław Govin, and many more political figures, who from their high chairs and offices substantiate the importance of digital assets. More importantly, they take real measures for coins integration.

In my home country of Ukraine, the work on legislative regulations has intensified. Before the full-scale invasion, one specialized law was adopted and signed (“The Law on Virtual Assets”), with one more piece of legislation in the works, which touches upon taxation, regulations, and other minor details. Several drafts have been introduced so far, with ongoing debates in full swing – which is always helpful; I expect the authorities to pay attention to the field experts and find common ground. Despite the sad reality of a fully-fledged atrocious war, popularity of BTC and other coins is only rising: Ukraine is No. 5 (preceded by the United States) on the Chainanalysis list of countries embracing crypto assets. According to this list, we beat Brazil, China, and Turkiye. Once we win this war, and once the legislation is sorted out, BTC in Ukraine will skyrocket.

Even under such conditions, Ukrainian crypto business keeps moving forward, including foreign countries. What are the objectives of your company?

My personal goals at the moment are to make White Rock Management one of the world’s top-3 miners, and make our company public. We are prepared to enter new markets and attract capitals. From day one, we designed our business in a way to be very clear and understandable to our investors. We imposed our principle from the very start (Environmental, Social, and Corporate), and we never messed with loans, which many of our colleagues do; thus, they’re up to the neck in debts.

We might fall short in terms of mining volumes, however, we’re not reliant on massive loans. We have zero debts and optimal EBITDA, which can be proven by three consecutive years of successful audits by international experts. I am certain that we’ll attract a lot of interest.

We are actively developing several projects in Canada and South America. Investment-wise, we’re talking about $100+ million. Also, alternative energy sources, green energy in particular, are one of our top priorities, and we have no intention of pulling back on this path.

This is, by the way, one of the reasons why miners face heavy criticism – excessive energy consumption (competing for it with other industries), especially in the middle of winter in regions burdened with all sorts of troubles…

State authorities of many countries have previously attacked the mining community as our industry was maturing, with some even launching full-scale propaganda campaigns against crypto: they claimed we’re parasites that stand in the way of developing economies. However, it was the miners who turned out to be the most prolific investors in alternative energy sources. Therefore, this angle of critique is no longer valid. There still might be some local complaints in specific regions, yet they are few and far in between.

No other field but crypto does as much to keep the green energy sector in motion. When I meet my colleagues, I find out about new projects on alternative energy sources that are being developed non-stop: for example, Bitfarms representatives spoke very engagingly on the use of hydro power in Norway, Finland, and Sweden, while Bit Digital is powered by the Niagara River in the USA (electric power generated by the currents of the Niagara River); some of our colleagues put to use geothermal power in Iceland. Our own White Rock Management is an avid proponent of hydro energy, but we are also very interested in American projects (Texas) in gas flaring, which help reduce CO₂ emissions at the same time. We joined another 250 companies in signing the Crypto Climate Accord agreement that stipulates environmentally friendly and safe mining of crypto.

Do you think this subject will remain in demand in 2024? What is your general forecast for this year?

Yes, I am confident that environmentally friendly projects will remain popular among the miners – I know we’ll keep working on them for sure. This is right, and this is profitable, too, if you make your business work correctly.

Speaking of the crypto market as a whole, a lot will revolve around those new instruments and opportunities for the investors. I am, of course, talking about BTC ETFs that had a pretty solid start in the United States despite the Grayscale sale-off (Grayscale Bitcoin Trust), which people saw coming to begin with. The major share of stock exchange spots ended up in the liquidator’s pocket, FTX, which never denied it was after maximizing profits to pay off the creditors. Sooner or later, these sale-offs will come to an end, with more money gradually flowing into other funds.

I am sure the investments will grow, including the numbers from the retail market. Back in late-January, Google posted first ads of BTC ETFs, a move that will most certainly attract attention of general public across the board. New funds will emerge, not in the U.S. alone: not so long ago, a spot application was filed in Hong Kong, and I’ve faith it will come through. Let’s wait and see when Europe kicks this door flying open, for the big party is yet to start around here. Capitalization and trading volumes will grow, make no mistake about that.

Surely, other products will pass various stages of development too. 2023 saw significant interest in AI-generated tokens (AI segment of the crypto market exceeded 11%), GameFi and even meme-coins – something a lot of us managed to forget about entirely. But, speaking of the mass market, I am sure the lion share of attention will be dedicated to BTC ETFs.

Readers are always curious about expected rates of the main cryptocurrency of all…

I’m not keen on putting exact numbers on things, however, I am confident the price of bitcoin will keep on rising. With some fallbacks and profit locking, perhaps, but still on the rise overall. There are objective reasons for the upward dynamics.

I have mentioned the further expansion of BTC ETFs, which will perpetuate the increasing value of the coin. Let us not forget about another major event, the halving, which will most definitely affect the exchange rate fluctuations. Also, willingly or otherwise, the stimulation of the interest in BTC will depend on the world’s financial regulators that are on the path of easing their monetary policies. U.S. Federal Reserve in particular: American regulator kept the basic rates as they were (5.25-5.5% per annum), but might lower them in this coming March, as inflation retreats and employment rates improve. The next thing to happen will be a natural reaction: a decrease in the profitability of dollar instruments, and an easy flow of capital from the credit and stock markets to the cryptocurrency market, which promises more interesting earnings. This wheel will spin itself, and we will see the price of crypto rise.

Many analysts insist that by the end of the year’s first quarter or beginning of the second, bitcoin will comfortably sit around $50-60 thousand apiece. Who knows, though: should the stars align perfectly, this price tag might be even better.