Markets briefly flashed green on Sept. 27 as equities markets bounced back from Sept. 26’s pullback, bringing the Bitcoin (BTC) price back to the long-term descending trendline resistance, which currently resides at $20,100. 

Unfortunately for bulls, the positive momentum for stocks and cryptocurrencies rapidly eroded and Bitcoin price gave up a majority of the intraday gains as it slipped back below $19,000.

As has been the case since March 25, BTC price has been unable to kick above the resistance for more than a few hours and the Sept. 27 breakdown at the trendline continues the trend of successive bear flags that see a continuation to the downside.

BTC/USD 1-day chart. Source: TradingView

According to Arcane Research, Bitcoin’s tight rally above $20,000 is relatively insignificant, given that futures premiums are still low and it “contributes little to improving the market risk appetite.”

BTC perpetual contract funding rate versus Bitcoin price. Source: Arcane Research

Additional data from Arcane Research shows funding rates flipping neutral for the first time since Sept. 13, but generally, traders are reluctant to add longs, given the concerns over macro challenges and the continuous threat of unfriendly crypto regulation.

There is a silver lining

As mentioned in previous analysis, despite the breakouts and breakdowns, BTC price is simply trading within the exact same $24,300 to $17,600 range of the past 103 days. To date, a catalyst to set off a breakdown below swing lows or to push price above resistance and confirm the former hurdle as support has yet to occur.

Fortunately, it’s not all doom and gloom for Bitcoin. A positive bit of news comes from on-chain analytics provider Glassnode, who noted that more mature investors have decided to hunker down and hold their positions rather than sell at the current price.

According to the Revived Supply 1+ Years metric, an indicator that tracks the “total amount of coins that come back into circulation after being untouched for at least 1 year,” the flow of latent supply shifting back into the active supply pool is “extremely low.”

Revived Supply 1 year+ Z Score. Source: glassnode

The compression in mature spending seen in the last stages of the 2018 bull market is not present during the most recent revisits below $20,000, suggesting that long-term holders are well accustomed to volatility and unwilling to sell at the current prices.

Revived Supply 1 year+ Z Score. Source: glassnode

Given that BTC is 72% down from its all-time high and a portion of investors expect prices to crumble toward $10,000 in the next unexpected capitulation event, one could interpret the lack of panic selling from mature investors as positive.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cointelegraph By Ray Salmond

Source link

Bitcoin (BTC) crossed under $20,000 after the Sep. 27 Wall Street open as United States equities inched higher.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewU.S. dollar has room to run — trader

Data from Cointelegraph Markets Pro and TradingView confirmed the $20,000 mark barely remaining as tentative support on the day.

BTC/USD had managed local highs of $20,344 on Bitstamp overnight, while retracing U.S. dollar strength gave modest relief to risk assets across the board.

The S&P 500 and Nasdaq Composite Index had been up 0.4% and 0.65%, respectively after two hours’ trading, but subsequently reversed.

At the same time, the U.S. dollar index (DXY) was down 0.15% on the day, back below the 114 mark but still near its highest since mid-2002.

“U.S. open coming up. Green numbers, while Yields & $DXY are correcting,” Michaël van de Poppe, founder and CEO of trading firm Eight, commented.

“Time for Q4 to be good for crypto.”

Popular trader Crypto Tony nonetheless cautioned on assuming that DXY had put in a major top.

“Bad news for the Bitcoin pump, the Dollar has not quite topped out yet, so we are looking for more pumps on the dollar and setbacks on $BTC,” he decided.

“Keep an eye on both of these if you plan on leveraging BTC.”

U.S. dollar index (DXY) 1-day candle chart. Source: TradingViewBinance BTC/USDT volume hits all-time high

With days to go before the monthly close, further BTC price volatility was expected, while traders demanded that October — traditionally a better month than September for crypto return — deliver the goods in 2022.

Related: More ancient Bitcoin leaves its wallet after 10-year hibernation

“Tracking price action over the past decade, Sept. has far and away been the worst performing month for BTC – closing positive only 20% of the time,” popular trading account Crypto Kaleo observed in a thread on Sep. 26.

“Silver lining – Oct. has been one of the best months for BTC – positive 78% of the time w/ a median gain of 28%.”

A close above $20,000 would be just enough for Bitcoin’s first “green” September since 2016.

BTC/USD monthly returns chart (screenshot). Source: Coinglass

In a sign of what the monthly close might have in store, meanwhile, major exchange Binance recorded its highest-ever daily trading volume for its BTC/USDT pair, with over 439,000 BTC equivalent changing hands.

BTC/USDT 1-day candle chart (Binance) with volume. Source: TradingView

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cointelegraph By William Suberg

Source link

On this week’s The Market Report show, Cointelegraph’s resident experts discuss why the British pound is at its all-time low and how that might impact the cryptocurrency market.

To kick things off, we break down the latest news in the markets this week:

Bitcoin gains 5% to reclaim $20K, eyes first ‘green’ September since 2016

A classic snap of sideways trading action sees Bitcoin’s (BTC) price aim higher, but concerns remain over what happens next. Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it added over 7% after the Sept. 26 close. Local highs of $20,344 appeared on Bitstamp before the pair began consolidating at around $20,200. Can Bitcoin achieve a green monthly close, and will the bulls be able to beat “Septembear?”

Is it Bitcoin’s time to shine? British pound drops to all-time low against the dollar

On Sept. 26, the British pound hit a record low against the United States dollar following the announcement of tax cuts and further debt increases to curb the impact of a possible economic recession. But could the British pound’s weakness be a positive for Bitcoin? Is it possible for the general population to move to cryptocurrencies once it realizes that people’s savings and investments are being devalued more aggressively?

Charles Hoskinson and Ethereum dev get into a war of words post-Vasil upgrade

Charles Hoskinson, founder of Cardano and co-founder of Ethereum, got into a war of words with Ethereum developers on the implementation of the proof-of-stake consensus via the Ethereum Merge. Hoskinson is known for his hot takes on his former project, and the bad blood between the two communities is nothing new. However, with both blockchains undergoing key upgrades on their networks, the recent exchange between the two sides highlights the disconnect between blockchain communities.

Next up is a segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Choosing a long-term coin.

Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down. The experts also go over some market news to bring you up to date on the latest regarding the top two cryptocurrencies.

Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. Our analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: XRP and Digg.

Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room and write your questions there. The person with the most interesting comment or question will be given a one-month subscription to Markets Pro, worth $100.

The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Cointelegraph By Cointelegraph

Source link

Bitcoin (BTC) will see increased interest from the United Kingdom “very quickly” as fiat currency volatility makes BTC look like a stablecoin.

That was the conclusion from Gabor Gurbacs, strategy advisor at investment giant VanEck, one of many flagging Bitcoin’s appeal over the pound this week.

UK becomes fertile ground for Bitcoin “orange pill”

As the U.S. dollar runs rampant, its strength has come at the expense of trading partner currencies, notably the euro, pound and Japanese yen.

The pound’s disintegration gathered pace this week, however, as GBP/USD hit its lowest on record at nearly $1.03.

With the United Kingdom’s central bank, the Bank of England, avoiding interventions so far, nerves are showing as purchasing power takes a double hit from currency weakness and inflation at forty-year highs.

“The United Kingdom will get orange-pilled very quickly given GBP volatility,” Gurbacs predicted.

“Given that the UK is now outside of the EU bureaucratic apparatus, it will get another chance to become a Bitcoin hub. I think UK leaders will use this opportunity reasonably well.”

The pound was down nearly 25% year-to-date at one point in USD terms. While Bitcoin beats it at 56%, data from Cointelegraph Markets Pro and TradingView shows, the longer the time horizon, the more attractive a BTC hedge becomes.

“Over the past four years the dollar has collapsed -67% gains USD,” Michael Saylor, former CEO of MicroStrategy, noted in his own assessment of fiat currency losses on Sep. 26.

BTC/USD vs. GBP/USD chart. Source: TradingView

According to data from CoinShares head of research James Butterfill, trade volume for the GBP/BTC pair on major exchanges Bitstamp and Bitfinex, normally worth a combined $70 million per day, hit a giant $881 million on Sep. 26 — an increase of over 1,150%.

Butterfill argued that this showed that “when a FIAT currency is threatened, investors start to favour Bitcoin.”

Reacting, Saifedean Ammous, author of the popular book, “The Bitcoin Standard,” called the phenomenon “fascinating.”

GBP/USD trade volume on Bitstamp, Bitfinex chart. Source: James Butterfill/ TwitterG20 “starting to understand” need for BTC hed

Gurbacs meanwhile acknowledged that while he “might be too optimistic about the UK,” G20 countries could yet enact a major policy shift vis-a-vis BTC acceptance.

Related: Bitcoin gains 5% to reclaim $20K, eyes first ‘green’ September since 2016

“Like gold, Bitcoin could be a hedge against their own policies. Which is worth a small % allocation and support,” he continued.

“Some are starting to understand this.”

Beyond the pound, data shows that it is the major fiat currencies which are suffering more at the hands of a surging greenback than those of emerging markets (EMs).

“The tables have turned,” Robin Brooks, chief economist at the Institute of International Finance, declared this week.

“Emerging markets like Brazil and Mexico are year-to-date outperforming G10 currencies against the Dollar. This is a big pivot in global markets that’s unprecedented. EM monetary policy is these days more orthodox than in advanced economies. Well done EM…”

An accompanying chart from Bloomberg showed the Brazilian real and Mexican peso even gaining on the dollar in 2022.

The pound brought up the rear along with the yen, while the Russian ruble was notably absent, having hit its highest in USD since 2015.

Fiat currency returns vs. U.S. dollar as of Sep. 26. Source: Robin Brooks/ Twitter

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cointelegraph By William Suberg

Source link

South Korean authorities have requested crypto exchange OKX and Kucoin to freeze 3,313 Bitcoin (BTC) reportedly tied to Do Kwon, the co-founder of Terra blockchain developer Terraform Labs.

Kwon, who is currently on the run from the Korean authorities in the securities violation case, reportedly created a new wallet on Sept. 15, just a day after a Korean court issued an arrest warrant against the fugitive crypto founder.

According to the crypto analytic group Cryptoquant, a new BTC wallet was created under the name of Luna Foundation Guard (LFG), and a total of 3,313 BTC was then transferred to the KuCoin and OKX exchange.

KuCoin received a total of 1,354 BTC, which were frozen immediately after the transfer, while OKX has reportedly ignored authorities’ requests. Thus, a total of 1,959 BTC couldn’t be frozen and could have been moved to other platforms.

Cointelegraph reached out to both crypto exchanges for confirmation but didn’t get a response at press time.

The movement of BTC from the LFG wallet raised many eyebrows as it contradicts Kwon‘s early claims of having used all the BTC in tLFG reserves to defend the TerraUSD Classic (USTC) peg. 

Related: Terra co-founder Do Kwon says he’s ‘making zero effort to hide’ following Interpol notice

Prior to the issuance of his arrest warrant on Sept. 14, Kwon claimed that he was neither under investigation nor had he been contacted by any authorities, despite numerous reports of several investigations in South Korea. However, right after the arrest warrant was released, Kwon reportedly fled Singapore, forcing authorities to seek help from Interpol.

On Sept. 26, Interpol issued a red notice against Kwon, confirming his fugitive status. However, despite all the evidence and an international notice against him, Kwon continues to tweet every now and then, claiming otherwise.

The $40 billion Terra ecosystem collapse led to a crypto market rout that wiped out nearly a trillion dollars from the crypto market. Even after such mayhem, Kwon continued to garner support from some sections of the community as he claimed his innocence and maintained he ha lost everything in the collapse.

Cointelegraph By Prashant Jha

Source link

The Southeast Asian nation of Vietnam now ranks among the top nations adopting cryptocurrencies. Indeed, the country has ranked first on Chainalysis’ Global Crypto Adoption Index for two years in a row.

Chainalysis’ research methodology took into account population-adjusted adoption in crypto platforms ranging from centralized exchanges to peer-to-peer (P2P) payment networks. Web traffic to major crypto networks was analyzed to determine countries with the highest interest and adoption percentages.

That said, Vietnam’s high adoption rate is a puzzling phenomenon, begging the question: Why is crypto adoption so high in the country?

No cryptocurrency taxes

There are numerous reasons why the crypto adoption rate in Vietnam is so high and one of them is that, unlike in the United States and other major jurisdictions where cryptocurrency holdings are taxed, there are no crypto taxes in Vietnam. 

Right now, the Vietnamese government does not even recognize cryptocurrencies as legal tender. While the nation’s tax authorities have shown interest in taxing cryptocurrencies, they lack the mandate to designate them as taxable assets. As such, Vietnamese law is largely silent when it comes to crypto taxation. 

Consequently, financial institutions in the country are barred from handling them. However, Vietnamese citizens are allowed to possess and trade crypto.

The lack of crypto taxes makes digital currencies ideal as investment instruments, hence the rise in adoption. The trade-off is that Vietnamese law doesn’t protect crypto users in the event of scams or losses. As such, cryptocurrencies cannot be used legally in trade relationships.

However, the nation’s financial regulatory agencies are working to come up with elaborate crypto usage guidelines. This is following a July 2021 directive issued by Prime Minister Phạm Minh Chính in which he asked the State Bank of Vietnam to explore the benefits and downsides of digital currencies with a view to draft regulations. The institution is likely to come up with a raft of measures that include tax and user protection guidelines.

Cointelegraph had the chance to speak with Gracy Chen, managing director of the Bitget cryptocurrency exchange, regarding Vietnam’s regulatory landscape and the developing situation.

According to Chen, clear and robust regulations would allow institutional inventors in the country to start dealing in crypto, and this would be a big win for the industry:

“When the regulation actually comes out, it may lead to a short-term impact on local fiat exchange trading, but in the longer term, clear regulation may encourage broader adoption and lay the groundwork for increased retail and institutional engagement since a better-regulated market will provide greater protection and increase trust of investors. So overall, the pros outweigh the cons.” 

Vietnam has a huge unbanked population

Many Vietnamese have limited access to standard financial services. According to a 2021 study carried out by Statista, the country ranks second among the top 10 unbanked nations. The report highlights that about 69% of the citizenry lacks access to typical banking services.

World Bank estimates indicate that just over 61% of the country’s population resides in rural areas, where access to modern banking services is limited. This void is rapidly being filled by cryptocurrency networks. Novel revolutionary blockchain concepts such as decentralized finance (DeFi) are also gaining traction among Vietnamese crypto investors who wish to obtain credit for crypto investment purposes.

DeFi is a hypernym for blockchain-based financial networks that provide services similar to those offered by banks. DeFi platforms allow users to earn interest on their money, lend and borrow funds, as well as trade in crypto derivatives. They also enable investors to safeguard their assets using DeFi insurance and don’t require paperwork. This makes them convenient for unbanked Vietnamese, especially those who wish to scale their crypto investments and earn passive income.

Notably, Vietnam is ranked second among nations with the highest DeFi usage in the world, according to the 2021 Chainalysis Global DeFi Adoption Index report.


In 2021, Vietnamese nationals living in the diaspora sent home over $18 billion in remittances, setting a new record, which made the country the eighth biggest remittance beneficiary in the world. This was a 3% increase from the $17.2 billion recorded in 2020.

For Vietnamese who regularly send money to their families in Vietnam, transfer fees are often exorbitant. The surcharges usually include administrative fees and exchange rates. According to World Bank statistics, remittance costs to Vietnam average about 7% as of 2020.

Exorbitant fees, in addition to the unbanked population’s lack of access to money transfer services, have made cryptocurrency transfers an appealing option for Vietnamese living abroad to help support their families back home.

While blockchains do have transactions fees, they often pale in comparison to those of remittance networks, and furthermore are P2P and don’t rely on a middleman to complete the transaction.

The rising popularity of GameFi 

Blockchain games with financial incentives, often referred to as GameFi, use innovative economic models that allow users to earn rewards while playing. The rewards are usually in the form of nonfungible tokens (NFTs) and cryptocurrencies.

As cryptocurrencies are at the heart of GameFi environments, many gamers learn how they work as part of the gameplay, providing another avenue for adoption.

According to Chainplay’s State of GameFi 2022 survey in August, 75% of GameFi crypto investors said that they started investing in digital currencies after joining GameFi platforms.

GameFi, especially play-to-earn (P2E) games, are immensely popular in Vietnam and have contributed greatly to cryptocurrency adoption in the country.

According to a 2021 research report published by data aggregation service Finder, Vietnam ranks sixth on the list of countries with the highest percentage of P2E gamers. According to the survey report, 23% of Vietnamese participants said that they had, at some point, played P2E games.

Today, numerous GameFi startups have set up shop in the country due to the pervading NFT gaming culture, and this is, in turn, driving crypto adoption. The developers include Ancient8, Sipher and Summoners Arena.

Notably, Axie Infinity, one of the most popular play-to-earn games in the world, has its roots in Vietnam.

Chen said that the relationship between GameFi and crypto adoption is part of the reason why both sectors are thriving:

“According to data from Google, Sensor Tower, and, Vietnam ranks first in Southeast Asia in producing applications and games in stores like Apple Store and Google Play. Meanwhile, the new huge crypto adoption all over the world last year was in part due to GameFi. These two factors are significantly connected, creating massive crypto adoption in Vietnam.” 

Cryptocurrencies as a hedge against inflation

Vietnamese citizens have, throughout history, preferred using other national currencies such as the United States dollar during times of economic turmoil and hyperinflation. In recent years, Vietnamese people have also been accumulating assets such as gold to hedge against inflation.

At some point in the past decade, the Vietnamese citizens held as much as 400 tons of gold.

Of course, the emergence of cryptocurrencies has also led to more Vietnamese citizens using them to hedge against inflation instead of tangible assets such as gold.

While the Vietnamese central bank has warned individuals and institutions against dealing in virtual currencies due to their mercurial nature, dwindling faith in the Vietnamese dong has led to more Vietnamese investors turning to digital currencies. According to data derived from Statista, Bitcoin (BTC), which is widely used by investors as a hedge against inflation, is currently the most popular cryptocurrency in the country.

The report reveals that search interest in the country for the prime cryptocurrency stands at about 84.5% relative to other cryptocurrencies.

Crypto adoption in Vietnam is set to persist as more Vietnamese discover the convenience and possibilities of digital assets. Extensive regulations, however, appear to be a long way off. The State Bank of Vietnam has until 2023 to study the pros and cons of cryptocurrencies and come up with policy recommendations.

Cointelegraph By Elizabaeth Gail

Source link

Bitcoin (BTC) is seeing some of its oldest coins come back to life after a decade lying dormant.

The latest on-chain data reveals that two-year BTC price lows have reawakened the most ancient part of the supply.

“Very old” bitcoins come back to life

As BTC/USD returns to levels not seen since Q4 2020, questions are arising over how long-term holders will respond.

The on-chain picture is mixed — the dormant supply is aging, but certain old hands are showing signs of wanting to sell at current prices.

The latest piece of the puzzle comes in the form of BTC returning to circulation after remaining in the same wallet for at least ten years.

Off the menu since 2012 — or even before — a total of 510.65 BTC moved again for the first time last week.

Little is known about the origin of the coins and the motive behind them coming back to life. The movements were noted by Philip Swift, creator of on-chain analytics resource LookIntoBitcoin.

“We saw the movement of some VERY old coins last week. Coins that had not moved onchain for +10yrs,” he commented on social media on Sep. 27.

BTC moves after 10 years+ dormancy chart (screenshot). Source: LookIntoBitcoin10-year inactive BTC hits record high

At the same time, separate data from on-chain analytics firm Glassnode has confirmed that more of the BTC supply has now been dormant for a decade or more than ever before.

Related: Bitcoin gains 5% to reclaim $20K, eyes first ‘green’ September since 2016

As of Sep. 27, a total of 2,521,378.890 BTC has stayed out of circulation for a minimum of ten years — a new all-time high.

BTC supply last active 10 years ago or more chart. Source: Glassnode/ Twitter

Cointelegraph has been closely monitoring movements of old coins as the latest Bitcoin bear market takes hold.

Late August, for example, was marked by 10,000 BTC suddenly moving on-chain, leaving its wallet for the first time since 2013. At the time, concerns even linked the stash to defunct exchange Mt. Gox, a theory later disregarded.

According to LookIntoBitcoin, meanwhile, Bitcoin’s June lows saw a larger tranche for 10-year+ coins move in a single day, with 477.80 BTC recorded on Jun. 14.

Bitcoin spent output lifespan of 10+ years chart. Source: Glassnode

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cointelegraph By William Suberg

Source link

Bitcoin (BTC) delivered long-anticipated volatility on Sep. 27 as a squeeze higher resulted in a push beyond $20,000.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBTC price 9-day highs greet traders

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it added over 7% after the Sep. 26 close.

Local highs of $20,344 appeared on Bitstamp before the pair began consolidating at around $20,200.

The move naturally did not go unnoticed by in trading circles, but opinions differed over the outcome, amid warnings that the whole episode may end up trapping overoptimistic traders taking late long positions.

“No [rejection] yet, but soon. Expecting higher for now,” popular Twitter account Il Capo of Crypto summarized, sticking by a theory which demanded new lower lows than the sub-$19,000 levels seen over the past week.

Research firm Santiment meanwhile noted mass profit-taking beginning as Bitcoin recrossed the $20,000 boundary for the first time in over a week.

“Many traders were apparently awaiting the $20k threshold to begin selling their bags,” it revealed alongside a chart of transactions made at a profit or loss to their owner.

“As Bitcoin crossed back above this psychological level, mass profit taking ensued. Now we find out whether those anxious to sell will regret their decisions.”

Bitcoin transactions in profit/ loss annotated chart. Source: Santiment/ TwitterCan bulls beat “Septembear?”

In a sign of how even modest price moves can impact market sentiment, meanwhile, the return to $20,000 set up BTC/USD to finish September higher than at the start.

Related: ‘The bond market bubble has burst’ — 5 things to know in Bitcoin this week

As noted by on-chain analytics resource Material Indicators, all now rested on bulls’ ability to defend BTC price action into the monthly close.

“BTC now in position for a green Monthly close…if it can hold through Friday. Taking profits along the way,” it confirmed in a tweet.

While modest, Bitcoin’s September gains totaled 0.7% at the time of writing, with BTC/USD at $20,200. If the month ends up “green,” it would be the first non-loss making September since 2016, data from Coinglass shows.

Just a day previously, Bitcoin was looking at monthly losses of 6% or more.

BTC/USD monthly returns chart (screenshot). Source: Coinglass

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cointelegraph By William Suberg

Source link

The electricity mix of Bitcoin (BTC) has drastically changed over the past few years, with nuclear energy and natural gas becoming the fastest growing energy sources powering Bitcoin mining, according to new data.

The Cambridge Centre for Alternative Finance (CCAF) on Tuesday released a major update to its Bitcoin mining-dedicated data source, the Cambridge Bitcoin Electricity Consumption Index (CBECI).

According to the data from Cambridge, fossil fuels like coal and natural gas made up almost two-thirds of Bitcoin’s total electricity mix as of January 2022, accounting for more than 62%. As such, the share of sustainable energy sources in the BTC energy mix amounted to 38%.

The new study suggests that coal alone accounted for nearly 37% of Bitcoin’s total electricity consumption as of early 2022, becoming the largest single energy source for BTC mining. Among sustainable energy sources, hydropower was found to be the largest resource, with a share of roughly 15%.

Despite Bitcoin mining significantly relying on coal and hydropower, the shares of these energy sources in the total BTC energy mix have been dropping over the past several years. In 2020, coal power powered 40% of global BTC mining. Hydropower’s share has more than halved from 2020 to 2021, tumbling from 34% to 15%.

Bitcoin mining electricity mix from 2019 to 2022. Source: CCAF

In contrast, the role of natural gas and nuclear energy in Bitcoin mining has been notably growing over the past two years. The share of gas in the BTC electricity mix surged from about 13% in 2020 to 23% in 2021, while the percentage of nuclear energy increased from 4% in 2021 to nearly 9% in 2022.

According to Cambridge analysts, Chinese miner relocations were a major reason behind sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. China’s crackdown on crypto in 2021 and the associated miner migration resulted in a major drop in the share of hydroelectric power in the BTC energy mix. As previously reported, Chinese authorities shut down a number of crypto mining farms powered by hydroelectricity in 2021.

“The Chinese government’s ban on cryptocurrency mining and the resulting shift in Bitcoin mining activity to other countries negatively impacted Bitcoin’s environmental footprint,” the study suggested.

The analysts also emphasized that the BTC electricity mix hugely varies depending on the region. Countries like Kazakhstan still rely heavily on fossil fuels, while in countries like Sweden, the share of sustainable energy sources in electricity generation is about 98%.

The surge of nuclear and gas energy in Bitcoin’s electricity mix allegedly reflects the “shift of mining power towards the United States,” the analysts stated. According to the U.S. Energy Information Administration, most of the nation’s electricity was generated by natural gas, which accounted for more than 38% of the country’s total electricity production. Coal and nuclear energy accounted for 22% and 19%, respectively.

Among other insights related to the latest CBECI update, the study also found that greenhouse gas (GHG) emissions associated with BTC mining accounted for 48 million tons of carbon dioxide equivalent (MTCO2e) as of Sept. 21, 2022. That is 14% lower than the estimated GHG emissions in 2021. According to the study’s estimates, the current GHG emissions levels related to Bitcoin represent roughly 0.1% of global GHG emissions.

Combining all the previously mentioned findings, the index estimates that by mid-September, about 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. The analysts stressed that about 92% of all emissions have occurred since 2018.

Total greenhouse emissions related to Bitcoin as of mid-September 2022. Source: CCAF

As previously reported, the CCAF has been working on CBECI as part of its multi-year research initiative known as the Cambridge Digital Assets Programme (CDAP). The CDAP’s institutional collaborators include finance institutions like British International Investment, the Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard, Visa and others.

Related: Bitcoin could become a zero-emission network: Report

The new CDAP findings noticeably differ from data by the Bitcoin Mining Council (BMC), which in July estimated the share of sustainable sources in Bitcoin’s electricity mix at nearly 60%.

“It doesn’t include nuclear or fossil fuels so from that you can imply that around 30-40% of the industry is powered by fossil fuels,” Bitfarms chief mining officer Ben Gagnon told Cointelegraph in August.

According to CBECI project lead Alexander Neumueller, the CDAP’s approach is different from the Bitcoin Mining Council when it comes to estimating Bitcoin’s electricity mix.

“We use information from our mining map to see where Bitcoin miners are located, and then examine the country, state, or province’s electricity mix. As I understand it, the Bitcoin Mining Council asks its members to self-report this data in a survey,” Neumueller stated. He still mentioned that there are still a few nuances related to lack of data in the study.

Cointelegraph By Helen Partz

Source link

Michael J. Burry, the financial wizard who was portrayed in the movie “The Big Short”, is known for predicting crises. For instance, his investment fund made billions from the 2008 housing crash, and Burry liquidated almost all his entire portfolio during the 2Q of 2022.

Given that no one seems to know whether traditional markets will bounce before entering a further recessive environment, it might be a good time to consider investing in cryptocurrencies. Below are some examples on how experienced investors sometimes miss incredible rallies.

In May 2017, Burry said people should expect a “global financial meltdown” and World War 3. Instead, the S&P 500 rallied 20% over the following 9 months. A couple of years later, the index peaked in December 2021, at a level that was more than 100% above Burry’s suggested short entry price.

In December 2020, Burry said that Tesla’s stock price was “ridiculous” as part of his justification for opening his short position. A 47% rally happened in the 35 days following that remark and Tesla shares peaked 10 months later after a 105% total gain from Tesla’s supposedly “ridiculous” price.

Indicators point to a major recession, but exactly when remains unknown

Without mistake, traders should not dismiss the fact that the U.S. dollar index has rallied strongly against other major global currencies to reach its highest level in 20 years. This shows that investors are desperately seeking shelter in cash positions, exiting stock markets, foreign currencies and corporate debt.

Moreover, the gap between the U.S. Treasury 2y-year and 10-year notes widened to a record-high -0.57% on Sept. 22. Typically, when shorter-term government bonds have higher yields than long-term bonds — an inverted yield curve — it’s interpreted as heightened signs of a recession.

Adding to the concerns, on Sept. 22, the U.S. Federal Reserve reported an all-time high of $2.36 trillion in overnight reverse repurchase agreements. In a “reverse repo,” market participants lend cash to the FED in exchange for U.S. Treasuries and agency-backed securities. The excessive cash in investors’ balance sheets indicates a lack of trust in counterparty credit risk, which is a bearish indicator.

After laying out the three critical macroeconomic indicators hitting levels not seen in over 2 decades, two important questions are left. First, what is Bitcoin (BTC) and Ether (ETH) relation to traditional markets? More importantly, what impact should investors expect if the S&P 500 drops 20% and the housing market crashes?

Regardless of whether a person pays their bills using cryptocurrencies, energy prices, food and healthcare services are heavily dependent on the U.S. dollar. Commodity international transactions are mostly priced in USD, including imports, exports and the actual trading. So even if one pays their expenses using Bitcoin, odds are somewhere along the way, this value will be converted into fiat money.

The cost of borrowing USD impacts multiple economies

The main takeaway from the lack of an effective circular trade exclusively using cryptocurrencies is that everyone’s life depends on the U.S. dollar’s strength and borrowing cost. Unless one lives in a cave, isolated in a self-sufficient land, or on some communist island, when investors hoard cash and interest rates skyrocket, every market is impacted.

As for an eventual housing market collapse or another 20% crash in stock markets, the truth is its impact on Bitcoin and Ether are impossible to predict. From one side, there’s the pressure from holders scrambling to reduce their exposure and secure a cash position for an eventual longer-than-estimated crypto-winter. On the other hand, there could be a surge in investors looking for non-confiscatable assets or seeking protection from inflation.

That’s why Michael J. Burry’s story becomes relevant right now when every pundit and market analyst claims a near-future market collapse or the potential crash in housing prices. Bitcoin and Ether are facing an imminent global recession for the first time, and judging by March 2020, when a panic selling triggered by the Covid-19 crisis, those that stood for the long run were rewarded.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cointelegraph By Marcel Pechman

Source link