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Another Bitcoin Metric Is About To Reach A New All-Time High Despite The Bear Market

The price of Bitcoin has taken a beating in the past month. The leading cryptocurrency by market cap is down by more than 11% from its price in July and has lost more than $50 billion in market cap since then. 

While the price plunge has been painful for investors, Bitcoin miners have also been feeling the sting as mining revenue per computing power has been dwindling for the past few months. On the other hand, Bitcoin’s hashrate has soared to high levels as mining farms continue to come online.

Bitcoin Hashrate Reaches All-Time Highs Despite Bear Market

Over the last year, Bitcoin’s hashrate (the total combined computing power of miners) has almost doubled. Data from Blockchain.com shows that the Bitcoin network hash rate surpassed 414 terahashes per second (TH/s) for the first time on August 16. 

This metric has since retraced to 390 TH/s, but it is expected to rise further in the coming weeks as miners bring on more computing power to break even on their mining operations. The higher the hashrate, the more difficult it becomes to mine BTC and earn rewards. This means that miners are now making less BTC per terahash of computing power than ever before. 

Data from Hashrate Index shows this figure is now at $0.06016 per terahash/second per day. In comparison, this figure was at $0.08124 on May 8 during the rise of Bitcoin Ordinals and Inscriptions. A further decline from here would see mining revenue fall below the lowest point in November 2022.

How Miners Are Adapting To Stay Profitable

The Bitcoin mining industry has proven itself resilient, even during the depths of the crypto winter. According to data from investment information platform MacroMicro, the current average cost to mine a BTC stands at $45,877 with the current price of BTC now at $25,936. 

Bitcoin price cap chart from Tradingview.com (Metric)

To remain profitable with the rising hash rate, Bitcoin miners have had to adjust their operations. Publicly traded mining companies like Marathon Digital and Riot Platforms have had to raise about $440 million through stock sales. 

Bitcoin miners have also avoided selling their $900 million BTC, as it could trigger a major selloff from investors. While previous on-chain data have shown miners sending a significant amount of coins to exchanges, miners have been expanding their reserves recently. 

BTC Mining Outlook

The outlook for Bitcoin mining economics in the coming months is uncertain but potentially promising if the hashrate continues to increase. The next Bitcoin halving is expected to take place in April 2024, slashing block reward by 50%. 

When the halving occurs, things could even get tighter for miners, as they would have to increase mine more blocks to break even. Nevertheless, big BTC mining companies are already on track for this adjustment. Marathon Digital, for example, was able to achieve a 54% boost in its hashrate during the second quarter but reported a net loss of $21.3 million.

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CryptoQuant Discusses How Bitcoin Has Changed In Past 1 Year

The on-chain analytics firm CryptoQuant has discussed how the Bitcoin market has changed during the past year.

Bitcoin Has Been Going Through Some Changes Recently

In a new post on X, CryptoQuant has broken down the changes that the cryptocurrency’s landscape has observed recently. The first would be that the US-based exchanges have been registering withdrawals, while the global platforms have seen growing holdings.

The relevant on-chain indicator here is the “exchange reserve,” which keeps track of the total amount of Bitcoin stored inside the wallets of a centralized exchange or a group of exchanges.

First, here is a chart that shows the trend in this metric for the foreign platforms:

Bitcoin Exchange Reserve

The above graph shows that the Bitcoin exchange reserves for Binance, Bitfinex, and OKX have increased during the past year. In total, the indicator’s value for these non-US platforms has increased by 10% in this period.

This increase would naturally suggest that these exchanges have seen net deposits in the last year. However, the exchange reserve for the US-based platforms paints a different picture.

Bitcoin US exchanges

While the foreign exchanges have seen deposits, the platforms based in the US, such as Coinbase, Gemini, and Kraken, have observed declining reserves during the past year.

In general, the reserves of these platforms have dropped by at least 30%, which is a very significant value. The opposite trends being followed by the two groups of exchanges could imply a migration of coins between them, with investors increasingly preferring the non-US platforms.

The second change in the BTC market is that institutional investors have started displaying an accumulation behavior. “Considering the amount withdrawn and the deposit and withdrawal records of the wallets, institutions are continuously buying Bitcoin,” explains the analytics firm.

CryptoQuant notes that in August alone, Gemini has seen a huge withdrawal of more than 20,000 BTC, which can be a sign that institutional investors are buying.

Bitcoin Gemini

Finally, there is a change in how market participants have been looking at the futures sector recently, as they have increased their exposure to derivative products.

The ratio of the trading volume of the asset between spot and derivative platforms has dropped to pretty low values recently, a sign that activity on the derivative exchanges is overwhelmingly more than on the spot ones.

Bitcoin Trading Volume Ratio

The open interest, a measure of the number of positions open on the derivative market, also showcases this change, as the metric’s value hit very high just recently.

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The chart shows that while the open interest was at highs just a while ago, it has since observed a plummet. The reason behind this plunge was the latest Bitcoin crash, which resulted in a cascade of liquidations in the market.

BTC Price

Bitcoin is trading around the $25,900 level, unchanged from one week ago, showing how stagnant the cryptocurrency has been recently.

Bitcoin Price Chart

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JP Morgan Explains Why Bitcoin Price May Not Fall Further

The cryptocurrency market has been in a declining trend for years. However, reports reveal a possible recovery and bullish turn for popular cryptocurrencies in the space. JP Morgan has predicted a possible price rebound for Bitcoin, saying that long-term liquidations are “largely behind us.”

JP Morgan Sees Upside For Bitcoin Price

JP Morgan, an American multinational financial services firm published an interesting research report on Thursday, August 24. Analysts led by Nikolaos Panigirtzoglou, Managing Director at JP Morgan indicated that crypto markets are likely to emerge from the declining trend from liquidations and market turmoil and move into a correction phase completely. 

They believe that the crypto market has been able to overcome a significant amount of negative factors that push the market to a “limited downside.” Their predictions are also based on the indications of a decline in open interest in Bitcoin futures contracts on the Chicago Mercantile Exchange (CME), a global derivatives marketplace. 

The crypto market has been on a severe declining trend while Bitcoin’s progress has been muffled after experiencing devastating market blows, and regulatory hurdles. The stunning fall of Terra stablecoin was one of the major challenges the industry faced, wiping over $200 billion worth of cryptocurrency assets from the space.

FTX’s collapse has also pushed the evolution of cryptocurrencies back by a couple of years, shattering investor’s confidence in the crypto space and hinting at the lack of a better regulatory framework in the industry. 

The United States Securities and Exchange Commission (SEC) has also been in hot pursuit of new victims, throwing lawsuits against prominent exchanges and crypto firms like Binance, and Coinbase.

All things considered, Bitcoin’s fight against evolutionary pressures has yielded positive results. A crypto analyst provided compelling insights on Bitcoin’s network, revealing that the spikes in on-chain transfers seen in Bitcoin’s network activity are a great indicator for a probable macro uptrend for the cryptocurrency. 

 

Bitcoin Price On The Verge Of Recovery Following Positive Developments In Crypto Space

There have been a significant number of positive developments that have pushed the price of major cryptocurrencies, including Bitcoin upwards. Ripple’s victory against the SEC is among said developments. The XRP ruling by Judge Annalise Torres has brought new optimism in the space and has also provided essential regulatory clarity for cryptocurrencies. 

Additionally, the increase in applications for Bitcoin spot exchange-traded funds (ETFs) has also boosted its price considerably. World-leading financial services providers like Blackrock, Ark Investment, Hashdex, Grayscale, and others are already competing for a spot in Bitcoin ETF. 

There are also reports of a potential collaboration between Bitcoin and Elon Musk’s SpaceX to enable cross-border payments for space-linked activities. 

Overall, the crypto landscape is showing signs of stability as it navigates through major industry hurdles. Crypto investors are also eagerly anticipating the potential recovery of Bitcoin and other cryptocurrencies. 

Bitcoin price cap chart from Tradingview.com (JP Morgan)

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OnlyFans Parent Company Buys $20 Million Worth of Ethereum – A Boost To ETH Price?

OnlyFans, the well-known adult content subscription platform, has made a bold move into the world of cryptocurrencies. Its parent company, Fenix International, recently revealed its significant investment of nearly $20 million in Ether (ETH) in 2022. 

According to official financial filings submitted to the UK corporate registry, Fenix International acquired nearly $20 million worth of ETH over a two-year period.

While the company’s investment in Ether demonstrates its progressive approach, it wasn’t immune to the market’s inherent volatility. By the end of November 2022, the value of Ether had plummeted by $8.5 million, leading to an impairment loss on the investment.

The remaining carrying amount of Ethereum stands at $11.434 million, reflecting the broader trends and uncertainties in the cryptocurrency market.

OnlyFans Ventures Beyond Traditional Offerings

The move to invest in Ether aligns with OnlyFans’ broader strategy of diversification and technological innovation. Investing in intangible assets with an “indefinite useful life” showcases the company’s willingness to embrace emerging technologies like blockchain, positioning itself at the forefront of industry trends.

The disclosure about Fenix’s acquiring a substantial amount of Ether has not seemed to provide a lift yet to the price of the crypto. At the time of writing, ETH was trading at $1,636, down -0.8% in the last 24 hours, and sustaining a slight 2.2% loss in the last seven days, data from crypto market tracker Coingecko shows.

The financial filings offer a glimpse into OnlyFans’ multi-faceted performance. Despite the challenges posed by its cryptocurrency investment, the company reported impressive financial results for the year ending November 2022. 

With revenue surpassing the $1 billion mark, driven by an influx of over 50 million new users and more than a million content creators, OnlyFans solidified its position as a revenue-generating powerhouse. Users collectively spent an astounding $5.5 billion on the platform.

OnlyFans Pioneers NFT Integration And Celebrity Trading Cards

Leonid Radvinsky, the visionary entrepreneur of Ukrainian origin who acquired OnlyFans in 2018, has reaped the rewards of the platform’s surging popularity.

The filings unveil that Radvinsky amassed dividends approximating $485 million since the inception of the previous year, in line with the escalating demand for OnlyFans’ offerings.

This recent crypto venture is not the company’s first stride into the digital asset domain. In early 2022, OnlyFans facilitated a pioneering move by enabling verified creators to replace their profile pictures with Ethereum-based non-fungible tokens (NFTs).

Moreover, in June of the same year, former OnlyFans executives unveiled Zoop, a celebrity trading card platform leveraging the Ethereum scaling solution Polygon. Zoop allowed users to trade 3D digital playing cards depicting their favorite celebrities.

The disclosure of Fenix International’s Ethereum holdings dovetailed with an industry-wide trend, as adult content creators began flocking to Friend.tech, a decentralized social media platform rooted in the cryptocurrency realm. This rush underscores how crypto’s recent surge has not only captured financial markets’ attention but also influenced sectors far beyond conventional investments.

Featured image from Verità e Affari

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Friend.tech Activity Crashes 94%, Is This The End?

Decentralized social networks have always faced significant challenges to gain mainstream adoption. Such is the apparent case of Friend.tech, a new decentralized app that enjoyed explosive growth earlier this month. 

Just barely two weeks after its launch, Friend.tech saw its trading fees grow to rival top cryptocurrencies like Bitcoin and Tron. However, the euphoria is starting to subside, as activity and trading fees on the social media app have crashed by 94%. 

Friend.tech Records Massive Fall In Trading Activity

Friend.tech’s model had raised concerns from some crypto investors, with some arguing about its long-term viability. Their criticism has been proven to be accurate as the situation at Friend.tech has started to deteriorate. 

Friend.tech allows users to buy and sell shares of influential accounts and social media profiles, and the platform reportedly registered over 35,000 and 4,400 ETH ($8.1 million) in trading volume in its first 24 hours. 

However, data from Dune Analytics show that trading volume has fallen since then, with less than $200,000 in fees generated in the past 24 hours. Trading activity has also been down from over 35,000 to less than 6,000 users. This has been reflected in trading costs, as revenue has decreased by more than 94% since the exchange first opened its doors.

Friend.tech’s business model relied heavily on charging users a 10% fee for every buy and sell of shares. Friend.tech surpassed Bitcoin in terms of trading fees, recording almost $1.4 million in revenue during the height of the platform’s trading activity. However, data from DeFiLlama shows that trading fees are now at $160,000 in the past 24 hours.

Friend.tech also incorporates Maximal Extractable Value (MEV) bots, which are automated trading bots designed to exploit rapid price movements. Although these bots have generated over $2 million in profits, they have been credited with discouraging content creators and users.

The Plight Of Decentralized Social Media Platforms

Decentralized social media have been touted to be the future of the internet. However, platforms have been faced with many challenges and have struggled to gain a firm footing in the market. One of the challenges is the expansion of the user base. Overcoming these challenges will be key to disrupting the status quo and achieving the promise of decentralized social media. 

At the time of writing, Friend.tech has a TVL of $6.4 million and has generated fees of over $7.8 million to date. But while Friend.tech is still operating, critics have likened its imminent failure to the fall of BitClout, another decentralized social media app.

Crypto total market cap chart from Tradingview.com (Friend.tech)

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XRP Faces Big Challenge: Scaling The $0.55 Wall – Possible?

XRP, the cryptocurrency tied to Ripple, found itself entangled in a familiar tussle with the $0.55 resistance level as bearish forces thwarted its early attempts at a rebound.

While last month’s pivotal summary judgment offered a glimmer of regulatory clarity for XRP, the ongoing specter of the SEC appeal and an impending trial slated for the first half of 2024 are fostering an air of skepticism among the investor community.

Despite the much-needed legal clarity provided by the recent summary judgment, a cloud of uncertainty still hangs over XRP’s trajectory. The forthcoming SEC appeal and the looming trial timeline have combined to cast doubt on the cryptocurrency’s immediate future. The ripple effect of these uncertainties is palpable as investors remain cautious about diving back into the XRP market.

XRP Bearish Sentiment Prevails

Price analysis indicates that the prevailing bearish sentiment pervading the broader cryptocurrency market is acting as a significant impediment to XRP’s upward breakout.

Santiment’s Network Value to Transaction Volume (NVT) ratio, which gauges the relationship between a blockchain network’s transactional activity and its recent price performance, reveals the extent to which bearish undercurrents are hampering XRP’s ascent.

As of now, XRP’s price hovers around $0.513, marking a decline of 2.8% over the last 24 hours. The past week has seen the cryptocurrency grappling with losses amounting to 1.6%, CoinGecko data shows.

The struggle to break through the $0.55 resistance level seems to mirror the broader market sentiment, reflecting the challenges that lie ahead.

A Glimmer Of Positivity

Coinalyze’s data presents a somewhat brighter aspect. XRP’s funding rates turned green on August 25, signifying an improved stance.

Moreover, the Open Interest (OI) rates, which indicate the total number of outstanding derivative contracts, have risen from approximately $340 million to surpass $360 million.

This increase could signal growing interest among traders and investors, adding a dash of optimism to the otherwise cautious outlook.

In addition, seasoned crypto investor Austin Hilton offers a contrarian view, suggesting that XRP is poised for a significant 20% breakout in the short term. Hilton points to various indicators and fundamental factors underpinning his projection.

Notably, his argument centers around a Tradingview indicator that tracks momentum shifts on the daily timeframe, helping traders determine optimal entry and exit points.

XRP’s journey forward remains intricate, marked by legal battles, market sentiment, and technical indicators. As the cryptocurrency navigates these multifaceted challenges, investors and enthusiasts alike eagerly await the next chapter in XRP’s tumultuous saga.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from LinkedIn