Despite concerns that Bitcoin Ordinals are causing network congestion, there is limited evidence to support the idea that inscriptions are displacing higher-value Bitcoin monetary transfers, according to the recent report by on-chain analytics firm Glassnode on September 25.
The primary reason for this phenomenon is that inscription users often opt for low fee rates, showing a willingness to wait for longer confirmation times.
In essence, they are choosing to buy and utilize the cheapest available blockspace, making them more susceptible to being displaced by more time-sensitive monetary transfers.
Introduced in February 2023, Bitcoin Ordinals have become the dominant force in terms of daily transaction count on the Bitcoin network.
However, this hasn’t translated directly into a substantial share of mining fees, accounting for only approximately 20% of Bitcoin transaction fees, as observed by Glassnode.
While inscriptions have increased the baseline demand for blockspace and subsequently raised fees for miners, there has also been a notable 50% increase in Bitcoin’s hash rate since February.
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This heightened competition among miners for fee revenue, combined with the impending halving event, is putting pressure on their profitability unless Bitcoin prices experience a significant increase in the near future.
Currently trading at $26,216, Bitcoin’s price is expected to appreciate to some extent leading up to the scheduled halving event in April 2024, as anticipated by industry experts.
It’s worth noting that the majority of inscriptions are linked to BRC-20 tokens, introduced just one month after Casey Rodarmor launched the Ordinals protocol on Bitcoin in February.
On September 25, Rodarmor proposed “Runes” as a potential alternative to BRC-20 tokens.
He suggested that an unspent transaction output-based fungible token protocol like Runes would help reduce the accumulation of “junk” unspent transaction outputs on the Bitcoin network, potentially alleviating some of the concerns surrounding Bitcoin Ordinals and their impact on network congestion.
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The impending $3 billion Bitcoin monthly options expiration on September 29th looms large, potentially impacting the critical $26,000 support level.
On one hand, Bitcoin’s recognition in China seems to be growing stronger, as a Shanghai Court recognized digital currencies as unique and non-replicable in a recent judicial report.
However, on the flip side, Bitcoin’s spot exchange trading volumes have reached a five-year low, attributed to increasing concerns about the macroeconomic outlook.
Cauê Oliveira, an analyst at CryptoQuant, highlighted this decline in trading activity.
Reduced trading volume poses a risk of unexpected volatility, especially in the face of liquidations in derivative contracts.
Adding to the uncertainty, traditional financial institutions like JPMorgan Chase are increasingly wary of handling crypto-related payments, as they aim to guard against fraudulent activities.
Furthermore, Bitcoin holders are on edge as the Dollar Strength Index (DXY) reached its highest level in ten months, standing at 106 on September 26th.
Historically, the DXY’s ascent correlates with risk-off behavior among investors, indicating a preference for cash positions.
The open interest for the September 29th options expiration stands at $3 billion, though expectations of Bitcoin reaching $27,000 or higher may result in a lower final amount.
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This bullish sentiment may have been bolstered by the unsuccessful attempt to break above $27,200 on September 19th, potentially breeding overconfidence.
Examining the put-to-call ratio, there’s an imbalance between the $1.9 billion in call open interest and the $1.1 billion in put options.
However, if Bitcoin’s price hovers around $26,300 at 8:00 am UTC on September 25th, only $120 million worth of call options will be viable, rendering higher-priced call options useless if BTC’s price remains below those levels on expiry.
Given the current price action, four likely scenarios emerge, each with varying numbers of options contracts available for call and put instruments.
The net result tilts in favor of put instruments in most scenarios, potentially signaling a bearish sentiment.
In conclusion, the odds of Bitcoin’s price dropping below $26,000 by September 29th seem high, particularly considering the recent market dynamics, investor sentiment, and the options landscape.
However, this analysis doesn’t account for more complex investment strategies, and market dynamics can change rapidly, so investors should closely monitor the situation in the coming days.
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MicroStrategy Bolsters Bullish Stance on Bitcoin with $147.3 Million BTC Purchase
MicroStrategy, a prominent player in the business intelligence sector and a significant Bitcoin investor, recently sent a bullish signal to the cryptocurrency market.
The firm’s co-founder and executive chairman, Michael Saylor, announced on September 25th the acquisition of an additional 5,445 Bitcoins (BTC).
This substantial purchase was executed using $147.3 million in cash and came at an average price of $27,053 per BTC.
This strategic move was disclosed through a Form 8-K filing with the United States Securities and Exchange Commission, indicating that MicroStrategy and its subsidiaries made this acquisition between August 1st and September 24th.
As of the latter date, the company’s total Bitcoin holdings, including previous acquisitions, reached an impressive 158,245 BTC.
The average purchase price per Bitcoin, considering fees and expenses, stood at approximately $29,582, culminating in a total purchase price of $4.68 billion.
This acquisition transpired against the backdrop of Bitcoin trading in a relatively sideways fashion around the $26,000 mark for several weeks.
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After briefly touching $28,000 on August 29th, Bitcoin experienced a dip to as low as $25,000 on September 11th.
At the time of this writing, Bitcoin’s price stands at $26,081, reflecting a 1.9% decline over the past 24 hours, and a roughly 4% drop over the preceding week, according to data from CoinGecko.
MicroStrategy’s latest purchase further underscores the company’s optimistic outlook on Bitcoin as a long-term investment. It follows their acquisition of 12,333 BTC for $347 million in June 2023, at an average purchase price of $29,668 per coin.
In an earlier development, MicroStrategy reported its first profitable quarter since 2020 in Q1 2023, attributed to a one-time income tax benefit.
The company subsequently maintained profitability in the following quarter, revealing a net income of $22.2 million in early August.
MicroStrategy’s continued commitment to Bitcoin not only underscores their confidence in the cryptocurrency’s potential but also positions them as a notable institutional player in the crypto space, further contributing to the ongoing evolution of the digital asset landscape.
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Bitcoin Holds Steady at $26,500 as Accumulation Continues Amid Market Stability
Arkham, a blockchain intelligence platform, recently unveiled a startling revelation: cryptocurrency giant Coinbase boasts an astonishing stash of nearly 1 million Bitcoins within its wallets.
In the current volatile crypto market, these coins carry a staggering valuation of over $25 billion.
To put this revelation into perspective, Arkham’s findings indicate that Coinbase’s holdings represent approximately 5% of the entire global Bitcoin supply.
Their meticulous analysis discerned a grand total of 947,755 BTC under Coinbase’s control, while the circulating supply of Bitcoin stands at approximately 19,493,537 according to CoinGecko, a trusted source for crypto data.
What’s more, Arkham’s investigations didn’t stop at the sheer volume of holdings.
They went on to identify a staggering 36 million Bitcoin deposit and holding addresses linked to the exchange.
In particular, Arkham pointed out that Coinbase’s largest cold wallet alone shelters around 10,000 BTC.
Remarkably, the intelligence experts at Arkham speculate that Coinbase might have undisclosed Bitcoin holdings that remain off the radar, eluding identification.
However, there’s a twist in the tale. Despite Coinbase’s colossal BTC holdings, the exchange technically only “owns” a fraction of this digital goldmine.
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In fact, recent data shows that Coinbase has direct ownership of roughly 10,000 of the Bitcoins it houses, which translates to a value of approximately $200 million.
This revelation highlights the complex dynamics of cryptocurrency exchanges and their role as custodians of user assets.
The cryptocurrency community erupted in a flurry of reactions upon learning about Coinbase’s substantial Bitcoin reserves.
Some individuals took it as a warning sign, advocating for the withdrawal of BTC from centralized exchanges, cautioning against waiting until withdrawals are suspended.
Others argued that concerns surrounding the security of cold wallets make it challenging for holders to find a truly safe storage solution for their digital assets.
It’s worth noting that when it comes to corporate Bitcoin ownership, MicroStrategy, a business intelligence firm, continues to reign supreme.
As of the latest available data, MicroStrategy’s co-founder Michael Saylor proudly declared the company’s possession of a staggering 152,800 BTC, with a valuation exceeding $4 billion.
This further underscores the growing trend of institutional adoption of Bitcoin as a store of value.
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The Securities and Exchange Commission’s (SEC) reluctance to approve the first Bitcoin Exchange-Traded Fund (ETF) has put immense pressure on Bitcoin’s price, causing distress among crypto investors.
Fortunately, TradeSanta offers automated trading tools connected to both spot and futures trading platforms, enabling traders to mitigate risks and capitalize on market downturns.
Throughout the year, Bitcoin made several attempts to establish a firm foothold above the $30,000 mark, all of which ended in failure.
As the year draws to a close, there is a growing concern that the cryptocurrency may continue trading below this critical psychological level.
One significant contributing factor to this sustained bearish pressure is the SEC’s ongoing delay in approving a spot Bitcoin ETF.
The SEC’s reluctance to approve Bitcoin ETFs has affected numerous applicants, including industry giants like BlackRock, which had initially encouraged other institutions to submit their applications.
Many asset managers, brokers, index fund providers, and other institutions have sought approval for a Bitcoin ETF to attract more institutional and retail capital to the crypto market.
Notable applicants include:
- BlackRock: The world’s largest asset manager, with $8.6 trillion under management, submitted its application for a spot Bitcoin ETF in mid-June, with Coinbase as its primary data provider and crypto custodian. The SEC accepted BlackRock’s application for review one month later.
- Fidelity: After being rejected in 2021, financial services giant Fidelity reapplied for its Wise Origin Bitcoin Trust to become an ETF in July of the current year.
- VanEck: An early applicant since 2018, VanEck rejoined the race for a Bitcoin ETF in July 2023, after previously withdrawing its application.
- ARK Invest: Investment management firm ARK has been awaiting SEC approval for its ARK 21Shares Bitcoin ETF since June 2021.
- Invesco and Galaxy Digital: These two firms joined forces to seek approval for the Invesco Galaxy Bitcoin ETF, a physically backed Bitcoin ETF with Invesco as the sponsor.
Numerous others, such as WisdomTree, Valkyrie Investments, Bitwise, and GlobalX, are also planning to launch Bitcoin ETFs.
However, at the end of August, the SEC delayed its decision on all these applications.
The SEC’s delay had a noticeable impact on the Bitcoin market.
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By the end of August, Bitcoin was attempting to retest the $30,000 resistance level but faced a downturn due to the uncertainty surrounding ETF approvals.
This uncertainty pushed the price down to around $25,000, and in mid-September, it even broke below this level, marking the lowest point since mid-June when BlackRock’s filing had triggered a rally.
Despite bearish market conditions, active traders can find opportunities by opening short positions. TradeSanta’s trading bots and automation tools offer a way to do this efficiently and without emotional interference.
The platform provides algorithmic strategies and risk management controls, enabling traders to navigate market downturns effectively.
TradeSanta supports over 100 cryptocurrencies and integrates with major exchanges, simplifying the trading process.
Moreover, it offers technical analysis tools to help traders identify trends and market sentiment. With stop-loss and trailing stop-loss features, traders can minimize losses during bearish trends.
Additionally, TradeSanta allows for copy trading, enabling users to replicate successful strategies for maximum profitability.
Feedback and statistics indicate that TradeSanta’s risk management tools have been effective in helping users minimize losses and navigate volatile market conditions, offering a valuable resource for traders in challenging times.
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As the week drew to a close on September 24, Bitcoin (BTC) stubbornly clung to the $26,500 mark, with exchange traders continuing to accumulate the digital asset.
Data from Cointelegraph Markets Pro and TradingView revealed that BTC’s price exhibited remarkable stability throughout the weekend, remaining unfazed by the macroeconomic turbulence originating from the United States.
Bitcoin had a relatively tranquil conclusion to the Wall Street trading week, as it shrugged off the potential market-moving events in the U.S.
However, market watchers, including the renowned trader and analyst Credible Crypto, anticipated a gradual buildup towards a potential trend shift by closely monitoring the Binance order book.
Credible Crypto shared his insights with subscribers, stating, “It appears that we are not yet poised for significant price movement.
In the meantime, two more blocks of buy orders have been filled, signaling a sustained accumulation phase.
Perhaps the weekend will be slow, and we may start witnessing some notable movement come Monday. Let’s remain watchful.”
A day earlier, another trader, Skew, had expressed hopes for a “liquidity hunt” leading up to the weekly close, though this scenario had yet to materialize at the time of writing.
Additionally, Keith Alan, co-founder of the monitoring platform Material Indicators, detected subtle changes in the order book, notably an increase in buy orders near the spot price.
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Turning to market participation, the well-known trader and analyst CryptoCon identified a significant reduction in speculative activity within the Bitcoin market.
Short-term holders (STHs), defined as those who have held their BTC for 155 days or less, now hold a smaller proportion of the available Bitcoin supply than they have in more than a decade.
Analyzing data from the on-chain analytics firm Glassnode, CryptoCon described these STH holdings as being in a “fine powder” state, indicating a diminished influence on market dynamics.
This shift reflects a growing presence of long-term Bitcoin holders, indicating increased confidence in the cryptocurrency’s enduring value.
It’s worth noting that some STH investors have already faced substantial losses, as previously reported by Cointelegraph.
In summary, Bitcoin’s price remained stable around $26,500 despite limited market cues and macroeconomic uncertainties.
Accumulation by exchange traders persisted, while traders and analysts monitored the potential for a trend shift.
Additionally, the decline in short-term holders and the rise of strong Bitcoin holders underscored a shift in market sentiment toward greater confidence in the digital asset.
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The forthcoming crypto bull run is poised to diverge significantly from its predecessor, and investors should exercise restraint in their anticipations of an imminent surge in cryptocurrency prices, according to Lars Seier Christensen, the founder of enterprise blockchain company Concordium, in a recent interview with Cointelegraph.
Despite the prevailing optimism in the crypto market surrounding the multitude of proposed spot Bitcoin (BTC) exchange-traded funds (ETFs), Christensen remains skeptical about their immediate impact on crypto markets.
He emphasizes that even if a Bitcoin rally does materialize, it does not guarantee a simultaneous surge in all crypto assets.
Christensen suggests that older altcoins like Ethereum may not experience a similar rally, contrary to expectations.
While digital asset prices have experienced a slump over the past 18 months, there remains an unwavering corporate interest in blockchain technology.
Consequently, Christensen envisions the next phase of industry growth to be marked by gradual, steady progress rather than the explosive price surges seen in 2021.
He notes that corporate entities require cryptocurrencies primarily for executing activities on specific blockchains, rather than solely for speculative gains.
However, not everyone shares Christensen’s perspective.
Ben Simpson, the founder of crypto education platform Collective Shift, argues that various data and indicators suggest the early stages of a Bitcoin bull market.
He points to metrics like the drawdown from the all-time high chart and market-value-to-realized-value ratio, which often precede bull markets.
Simpson identifies Bitcoin, Ether (ETH), and application-specific tokens, particularly those related to gaming, as assets poised for significant growth.
He also mentions DeFi tokens as offering substantial upside potential.
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The crypto industry has faced challenges in recent years, including a more hawkish Federal Reserve and the high-profile collapses of platforms like FTX and Celsius Network, resulting in decreased investments and falling crypto asset prices.
However, eToro Markets analyst Josh Gilbert is optimistic, anticipating a resurgence in the crypto market as central banks worldwide consider lowering interest rates.
Looking ahead, 2024 appears promising for Bitcoin and the broader crypto market, driven in part by the Bitcoin halving event.
Still, market analyst Tina Teng from CMC Markets advises caution, emphasizing the need for a conducive macroeconomic environment and central banks’ willingness to provide liquidity to markets for a true bull market to emerge.
Teng points out that the previous crypto market boom coincided with the Fed’s rate cut cycle rather than a rate hike cycle.
She underscores the significance of Bitcoin breaking through the 50-day moving average for a new bull market thesis to gain validation.
Teng concludes by highlighting ongoing concerns related to government bond yields and inverted bond yields, signaling economic uncertainty.
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Bitcoin experienced a downturn in the wake of the Wall Street opening on September 21, accompanied by renewed discussions of a $20,000 price target for BTC.
Over the past 24 hours, BTC’s price action, as reported by Cointelegraph Markets Pro and TradingView, has been lackluster, with the $27,000 level slipping out of sight.
This uninspiring performance came on the heels of the United States Federal Reserve’s decision to pause interest rate hikes, causing BTC/USD to drop by nearly $700 the day before.
In the absence of substantial volatility, market participants adopted a more cautious outlook.
Well-known trader Crypto Tony expressed the sentiment that a gradual ascent to $28,500 over the course of October would be ideal, followed by a surge of hype and FOMO (Fear Of Missing Out), only to witness another price decline.
Monitoring resource Material Indicators raised concerns about a potential “death cross” formation on the weekly chart.
This ominous occurrence takes place when specific moving averages (MAs) intersect, and in this case, the 21-week MA was on a trajectory to dip below its 200-week counterpart.
Material Indicators suggested the possibility of a lower low (LL) at the weekly close, with the 50-week MA potentially providing temporary support and triggering a short-term rally.
However, a LL could pave the way for further downward movement to test the $20,000 mark.
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Additionally, there was anticipation regarding the liquidation of crypto assets by the defunct exchange FTX, which could exert selling pressure on BTC.
Speculation arose that FTX liquidators might attempt to bolster prices before distribution to prevent excessive erosion, although this remained speculative.
Amidst various viewpoints, some traders remained optimistic. CryptoCon, a popular trader and analyst, asserted that Bitcoin was still in the early stages of its next bull market, emphasizing this view with a chart.
Another trader named Jelle saw the current prices as an attractive buying opportunity for prospective BTC investors.
At the time of writing, BTC/USD was trading around $26,600, with gains in September totaling approximately 2.5%.
This marked Bitcoin’s best month since 2016, as data from monitoring resource CoinGlass indicated that the cryptocurrency had experienced losses every September in recent years.
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Bitmain, a prominent cryptocurrency mining hardware manufacturer, and the now-bankrupt crypto mining entity, Core Scientific, have reached a significant agreement that involves a combination of equity and cash to advance their mining facility expansion plans.
Under this agreement, Bitmain will provide Core Scientific with 27,000 Bitcoin mining rigs in exchange for $23 million in cash and $53.9 million worth of common stock from the distressed mining company.
Beyond the hardware procurement, the two companies have also inked a fresh hosting arrangement aimed at supporting Bitmain’s mining endeavors.
The deal’s finalization occurred in August, marked by a court filing that spotlighted Bitmain’s intention to trade mining hardware for cash and equity within the context of Core Scientific’s restructuring blueprint.
This restructuring plan encompassed other entities like Anchorage, BlockFi, and Mass Mutual Asset Finance.
Notably, aside from Anchorage, all three firms opted for a combination of cash and equity as a means to settle their claims.
Bitmain’s ambitious expansion and investment strategy are poised to come to fruition by the fourth quarter of 2023, contingent upon approval from a judge.
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Once greenlit, this hardware infusion could potentially bolster Core Scientific’s hash rate by an impressive 4.1 exahashes.
Additionally, the two crypto mining collaborators have committed to collaborating on the enhancement of Bitmain’s legacy miners situated within Core Scientific’s data centers, with the ultimate goal of optimizing the firm’s operational efficiency.
Core Scientific’s financial woes led to their Chapter 11 bankruptcy filing in December 2022, with the primary drivers being the financial crisis and the declining value of Bitcoin.
The company faced mounting challenges in the lead-up to its eventual collapse, primarily due to the turbulent conditions prevailing in the cryptocurrency market during that period.
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A recent publication from the Institute of Risk Management (IRM) has drawn attention to the potential of Bitcoin (BTC) to serve as a catalyst for a worldwide energy transition.
The report, authored by members of the IRM Energy and Renewables Group, Dylan Campbell and Alexander Larsen, bears the title “Bitcoin and the Energy Transition: From Risk to Opportunity.”
This comprehensive analysis challenges the prevailing notion that BTC poses a threat due to its energy-intensive nature and instead sheds light on its capacity to instigate transformative changes in the global energy landscape.
The IRM report underscores the indispensable role of energy in contemporary society and the growing demand for sustainable, cost-effective, and clean energy sources.
Notwithstanding the criticisms regarding Bitcoin’s substantial energy consumption, the study offers a more nuanced perspective by elucidating the potential advantages BTC could bring to the energy sector.
One of the most noteworthy findings within the report is the assertion that Bitcoin mining has the potential to reduce global emissions by as much as 8% by 2030.
This ambitious target can be achieved through the conversion of wasted methane emissions into less harmful byproducts.
The report elucidates a theoretical scenario in which captured methane is harnessed to power Bitcoin mining operations, effectively mitigating the release of methane into the atmosphere.
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Furthermore, the report outlines additional opportunities for Bitcoin to make meaningful contributions to the energy sector.
It suggests that Bitcoin could enhance energy efficiency by facilitating electricity grid management through the deployment of Bitcoin miners and the transfer of excess heat generated by mining operations to greenhouses, thus optimizing resource utilization.
The authors of the IRM report articulate their perspective succinctly: “We have shown that while Bitcoin is a consumer of electricity, this does not translate to it being a high emitter of carbon dioxide and other atmospheric pollutants.
Bitcoin can be the catalyst to a cleaner, more energy-abundant future for all.” In essence, the report underscores the potential of BTC not only to coexist with the imperative for a sustainable energy future but also to actively drive positive change within the energy sector.
In conclusion, the IRM’s report challenges the prevailing narrative surrounding Bitcoin’s environmental impact, positing that BTC has the potential to be a constructive force in shaping a cleaner, more energy-rich global future.
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