Bitcoin Hash Rate Takes a Big Jump as Miners Migrate from Sichuan, China

Bitcoin price may have taken a breather after a 20% rally, but the same can’t be said about the hash power miners are using to produce BTC.

Towards the end of Sept., the network’s hash rate hit a new all-time high in terms of raw value, as per Blockchain.com.

On Nov. 2nd, the hash rate tanked to mid-June levels, under 95 Th/s as China’s rainy season came to an end. One of the biggest Bitcoin mining pools Poolin noted,

“Bitcoin’s network hashrate has been consistently dropping for the past two weeks as miners in China are packing up their operations for seasonal migration.

Without the cheap electricity of the wet season, they are moving from Sichuan to colder regions with cheaper electricity prices.”

The day after that low, bitcoin difficulty saw its second-biggest negative adjustment in the digital asset’s entire lifetime.

Now that the rainy season is over, many miners switched off and started seeking new hosting facilities that helped them see an increase of 25% in revenue per Th/s, making most of the old-gen mining hardware profitable, including S9s, yet again. Poolin, in its latest Miner’s Digest, said,

“It usually takes two weeks for mining farms to migrate to another location, so we expect most of the 40EH/s of network hashrate to return between the 10th and 14th of November.”

And as expected, the hash rate saw a big spike, approaching the ATH again.

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As a result of this big jump in hash rate yesterday, the block generation time that surged above 15 minutes, from the regular 10 minutes has come down under 8 minutes.

As such, the unconfirmed transactions in mempool have also come down drastically from 150k two weeks back to a mere 11k. Naturally, the average bitcoin transaction fees have also come down from $13.4 on Oct. 31st to under $6.

Still, the fees are high compared to early 2020 levels when it was under $1, but given the bull run we are seeing, it is to be expected as it was in December 2017, that average fees hit an all-time high at above $55.

Thanks to high fees, Bitcoin miner revenue saw a new high in 2020.

Last week, nearly $21 million were paid to miners in a single day, as per F2Pool. During this time, the Lightning Labs team launched a non-custodial Lightning pool to earn yields on BTC by selling liquidity while F2Pool launched its Conflux mining pool.

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Author: AnTy

Tech Firms Have an ‘Obligation’ to Solve Societal Issues: Ripple CEO Criticizing Coinbase

Ripple CEO Brad Garlinghouse rejects the apolitical stance taken by Coinbase and has no plan to follow it.

Last month, Coinbase CEO Brian Armstrong wrote a blog post where talking politics is banned in the company. US-based cryptocurrency exchange’s policy to not “debate causes or political candidates internally” or engage with issues that aren’t related to its core mission crypto caused quite a stir.

Many of its employees (5% workforce) took the severance package offered to those wanting to quit the firm over its mission and left the company.

Twitter CEO Jack Dorsey opposed the decision at that time. Now, Garlinghouse has shared his displeasure while Ripple offers employees paid time off to vote and volunteer in the upcoming presidential election.

“The sad reality is — and I say this as a long-time veteran of Silicon Valley — some of these (societal) problems are, at a minimum, exacerbated by the tech platforms themselves,” Garlinghouse said.

As has been seen, the manipulation of elections and political discourse on the biggest online platforms like Facebook, Twitter, and YouTube.

Brad Garlinghouse also shared that Ripple is taking YouTube to court over Google’s video-sharing platform, failing to protect users from “giveaway” scams.

“We didn’t need to do that; it doesn’t help Ripple,” he said. “But what it highlights is that platforms need to take ownership of the problems they are contributing to.”

Garlinghouse’s comments on Coinbase’s mission came soon after he said the company, which has a $10 billion valuation, is considering relocating overseas with Japan, Singapore, Switzerland, the UK, and UAE potential candidates due to lack of regulatory clarity in the US regarding its digital asset XRP.

“Ripple was once a darling of Silicon Valley & raised tons of capital from US investors. It’s pretty shocking to see them consider fleeing the country now. This isn’t a move any company takes lightly. I wonder what this says about the state of their relationship with the SEC….” said Jake Chervinksy, General Counsel at Compound Fiance, about this development.

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Author: AnTy

MicroStrategy CEO: Bitcoin is the “Ultimate Inflation Hedge,” 1000x Better than Gold

Publicly traded MicroStrategy has taken a deep dive into Bitcoin, having bought a total of 38,250 BTC at a rate of $425 million and making the leading digital asset a part of their reserve, replacing cash.

This is a big conversion from MicroStrategy CEO Michael Saylor’s tweet about “bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling,” in 2013.

However, in a conversation with Anthony Pompliano on his podcast, Saylor shared that he is “ashamed” for tweeting what he did, which he didn’t even realize until the crypto community reminded him of when the company first announced buying $250 million worth of bitcoin. He said,

“I’m like oh my god, I literally forgot I ever said that…but I took it as kind of like, kind ribbing like I didn’t get all worked up about. I’m like you’re right, I was wrong, what an idiot I was.”

Because They’re Going to Crush Everything

During his conversation, Saylor further talked about how before agreeing on bitcoin is the right idea, “we all needed to collectively be of the opinion that we were going to be generating cash at infinitum,” for which they went on a journey through corporately over the past year.

The company had $500 million in cash, and they had to decide whether to buy-back stock, buy another company, or keep it for a rainy day.

Saylor credited his friend Eric Rice, who owns bitcoin investment fund and kept on advising him on bitcoin, which the CEO kept on dismissing until “one day we’re sitting around my pool in Miami and he starts explaining it and something clicks in my head that maybe this is a pretty good idea.”

So, here they had to decide between precious metal and bitcoin after dismissing commercial real estate and equities and “I want something that can go up by a factor of 10,” Saylor said.

He compared Bitcoin to Amazon and Apple when they first came out — a good investment that has a digital dominant network and dematerialized something fundamental. So, you invest in that thing when they have a hundred billion dollar market cap because,

“When they’re ten times bigger than the next biggest thing, and they’re a hundred billion dollars, they’re probably going to crush everything.”

This is the Real Deal

Saylor, however, isn’t interested in hundreds of other cryptos available in the crypto space. Because, while it’s “great” to have all that innovation which may or may not work, an outsider needs something in which one can put in their $500 million and,

“Everybody in the community is going to spend every iota of their energy to make sure no one f’s with that network.”

Not to mention, bitcoin is the dominant crypto, and nothing comes close to it. Also, community ethos is one of the key drivers of their belief in its success.

And although BTC is volatile, what other choice does anyone have in the current environment.

“Let’s be honest there’s a negative real yield on everything else,” whether it’s gold, bond, or cash.

“Every other non-volatile asset is a negative real yield, which means that everything else is lifeblood draining out of my veins,” said Saylor, adding he would choose the asset with volatility over “non-volatile cash that bought 30 percent less in a matter of eight weeks.”

Moreover, in the next ten years, with people coming into move hundreds of millions of dollars, they will tend to damp all the volatility because it’s in their interest.

“I think people were kind of oblivious to the need to slash the role of bitcoin and the bitcoin narrative of digital gold – this is the ultimate inflation hedge,” said Saylor, who sees the digital asset as a 1000x better than the yellow metal.

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Author: AnTy

Bitmain’s Wu Regains Power Over Micree Zhan As Jihan Named Legal Representative

The struggle for Bitmain’s control has taken a different turn, with Jihan Wu regaining the position of executive director and legal representative of this Chinese Bitcoin mining rig manufacturer. According to the latest update on China’s business registration record, Macree Zhan will no longer serve in the above capacities but remains a general manager in the company.

This turn of events comes as an upper hand to Wu’s side of the company, given the powers embedded within the legal representative and executive director role in Chinese-domiciled entities. Wu is now the one in control of Bitmain’s seal hence broad powers to act on behalf of the company as well as sign strategic decisions into effect.

Bitmain’s Power Brawl

With cryptocurrencies on the rise, Bitmain pivoted as one of the leading mining rigs manufacturers, but the firm’s internal brawls since late 2019 have cost the business a fortune. The real trouble began when Wu ousted Zhan towards the end of 2019; a move that Zhan later termed to be illegal and took the battle to the courts. Since then, Bitmain’s operations have been at the mercies of the two opposing camps.

Fast forward, Zhan was able to regain control of Bitmain’s Beijing offices in June 2020 and proposed to buy Wu’s shares at a valuation of $4 billion. His helm at the firm, however, seems to have been cut short with the latest developments. Nonetheless, Wu has maintained that Bitmain’s respect for Zhan remains unchanged in a recent WeChat post on the Bitmain AntMiner brand account.

Bitmain’s Woes Might Be Far from Over!

While the latest changes may have signaled calm waters for Bitmain’s operations, it is still too early to predict whether the firm’s internal power struggles will persist. For starters, a lawsuit between the two divides is still pending in the Cayman Islands, where Bitmain’s holding entity is domiciled. This regulatory uncertainty has ultimately threatened the firm’s operational side as well; Wu, however, noted that they are looking to find long-term solutions for the troubles caused to Bitmain stakeholders.

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Author: Edwin Munyui

A Dose of Hopium Amidst the Bitcoin Market Sentiments Turning to ‘Fear’

With so much red across the crypto market, the market sentiment has taken a drastic turn.

Until yesterday, the market sentiments were of “extreme greed” with a reading around 80, on a scale of 1-100, as per Crypto Fear & Greed Index. The crypto market has been in “extreme greed” ever since late July.

But yesterday’s correction resulted in a sudden decline to a reading of 40, which translates to “fear” last seen in early July when bitcoin was around $9,100.

Crypto Fear & Greed Index
Source: Crypto Fear & Greed Index

The sentiment makes sense, given that bitcoin nearly dropped to $10,000 level in over a month. The crash in the prices of the leading digital currency also sent altcoins in a free fall.

Overall, the crypto market cap lost $60 billion but is currently seeing a small rebound as bitcoin trades at $10,450 with altcoins making a recovery as well.

However, analyst Rekt capital notes, “In the bear market, BTC was in a macro downtrend with relief rallies on the way to new yearly lows. In this bull market, BTC is in an overall uptrend with small pullbacks on the way to new highs.”

Given that crypto markets were influenced by the stock market where tech stocks experienced a sharp reversal, we need to pay attention to the last trading day of the week for the US stock market and, of course, the U.S. Dollar Index, which seems to be gaining strength.

Amidst this somber mood, the popular analyst “Nunya Bizniz” shared the hopium that calls for stacking the sats in anticipation of a bullish wave.

Comparing the 2015 market structure, currently, we are retesting the descending trend line on the weekly just like we did at that time. After the successful retesting five years back, the digital asset had a rally of 8,000% into the all-time high of $20,000 in December 2017.

Source: TradingView

Also, it is nothing out of character for bitcoin to fall this much. As a matter of fact, if bitcoin drops to $8,000, even that won’t be out of the ordinary. During the past cycle, the flagship cryptocurrency had about nine such retracements, where it fell 30% to 40%.

If anything, it is a good buy the dip opportunity.

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Author: AnTy

The US Seizes $2M in its Largest-Ever Move Against Militant Group’s Crypto Fundraising Effort

The US Justice Department has taken down the efforts by the military wing of al Qaeda, Hamas, and Islamic State to raise funds via cryptos through schemes that sold bogus COVID-19 safety equipment to US hospitals.

The agency said they seized about $2 million in the largest ever move by the US against the use of cryptos by militant groups. Authorities confiscated over 300 crypto accounts, four websites, and four Facebook pages.

All 150 cryptocurrency accounts used to launder funds were seized, investigators said. The department said in a statement,

“These actions represent the government’s largest-ever seizure of cryptocurrency in the terrorism context.”

Homeland Security, Federal Bureau of Investigation, Internal Revenue Service, and the U.S. Justice Department were all involved in the investigation to take down the fundraising schemes.

During the probe, the US agents operated an undercover website mirroring a Hamas website for 30 days, said John Demers, head of Justice Department’s national security division.

Using FaceMackCenter.com website, the militant groups peddled the personal protective equipment touted as approved by the US Food and Drug Administration, which in actuality “were not FDA approved,” to first responders, nursing homes, and US hospitals.

Investigators also reported that the payments were collected through US credit cards and PayPal, but the equipment was never delivered.

The Islamic State promoted its scheme via Facebook accounts while AL Qaeda solicited donation for its scheme through the Telegram app.

“Nothing was hidden,” said one U.S. official, “They thought they were protected” by the encryption in the apps they used.

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Author: AnTy

Institutional Investors Gobbling Up More Bitcoin Than Being Mined This Month

Even since Bitcoin entered August, the price has taken to test the $12,000 level after successfully breaching the key levels, $10,000 and $10,500 last month.

But so far, the digital asset hasn’t been able to sustain above $12k despite breaking above it twice, resulting in a crash afterward. We are now back to trading around $11,500.

While the price has taken a breather here, people are not passing this opportunity to buy the dips.

In the past two weeks, Grayscale Investments added 14,422 BTC to its bitcoin product Grayscale Bitcoin Trust (GBTC). Although the real BTC purchased might not be this high given that these figures are based on the outstanding shares created by Grayscale’s institutional clients which involve “in-kind” purchases as well, there is some level of activity going on, for sure.

Interestingly, Grayscale Bitcoin Trust saw its value increasing by $1.6 billion in the first half of 2020. The number of BTC held in the GBTC fund grew from 261,192 to 386,723.

In total, Grayscale has $5.6 billion in assets under management.

The Big Names

Besides Grayscale, the first publicly listed billion-dollar company MicroStrategy dived in Bitcoin. As we reported, within a fortnight of announcing in its Q2 2020 earnings call, the company bought 21,454 BTC, to replace cash in its balance sheet as a reserve asset. Arcane Research noted,

“To put that into context: MicroStrategy just bought the next 23.8 days of new bitcoin supply.”

The company shared in its official announcement that they see bitcoin as digital gold and a superior asset class with the potential for incremental returns. The decision to invest in bitcoin was taken in the light of ongoing currency debasement because of the unprecedented money printing, quantitative easing, and the lack of yield.

Going with Bitcoin for treasury management purposes resulted in the company’s market cap increasing by 11% “relative to the straight fiat cash exposure.”

Interestingly, the largest asset manager in the world, BlackRock, and largest mutual funds provider Vanguard together own 25% of MicroStrategy.

More Demand than Supply

This demand actually outstrips the supply of Bitcoin which has been 900 BTC per day since the halving.

In these past two days, while Grayscale and MicroStrategy combined bought 35,876 BTC, only 12,594 BTC were mined during this period, showcasing the growing demand for this “alternative” class as an inflation hedge.

Institutional interest in Bitcoin is strong as we have been seeing throughout 2020. As of June, about 90% of North America’s cryptocurrency transfer volume came from professional-sized transfers, those above $10,000 worth of digital assets, as per Chainalysis. The report states,

“Over the last two years in North America, we’re seeing the impact of a growing class of institutional investors whose transfers account for the growing dominance of professionals in the North American market since December 2019.”

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Author: AnTy

CEO of DeFi YFI Token Fork, Asuka, Exit Scams 2 Days After Launching; Binance To Investigate

Over the past few months, the crypto world has taken off with a helping hand from the DeFi market. The yield farming craze has seen blockchains like Compound, Balancer, etc. take off in a massive way, as investors chase the crazy annual yields these DeFi platforms offer. However, a report from Korea points to a DeFi exit scam conducted by a well-known person in the Korean crypto community – Jongchan Jang.

Jongchan Jang, CEO of Asuka token, a Yearn Finance (YFI)-fork token, is said to have exit scammed the project just two days after launch, on August 3. This was revealed by Korean media outlets. Jang also shut down the project’s website and social pages, causing the price of the ASUKA token to collapse from $1600 early on Monday GMT to about $18 per token at 1 PM GMT.

According to the Asuka.Finance website (now closed), the ASUKA token, once dubbed the Dogecoin of DeFi, has a limited supply and distribution like YFI, with only about 21,000 tokens ever to be produced. More details on the token reveal that the “YFI clone” aimed at ‘farming’ nearly half of the tokens.

To stake Asuka tokens, users had to buy the Maker stablecoin – DAI – and place the tokens in a Balancer liquidity pool. Once in the pool, the deposit earns a certain “BPT” token, which is then farmed (staked back) into the protocol. Almost 10 billion Won was staked in the liquidity pool fund, but Jang could not access this amount as he burned the key to the pool.

Binance set to Trace Jang

According to some sources, the DAI exit scam was made clear to Binance leaders, and now the exchange is looking into the matter to freeze these accounts. In a statement released to one of the crypto news outlets, Binance stated,

“We have identified the relevant account(s). Binance will assist Korean law enforcement in their investigation once we receive a request from them. As always, we will continue to strive for heightened security both on our platform and for the greater crypto space.”

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Author: Lujan Odera

This Top-Performing Crypto Asset Is Outpacing Bitcoin

For the past few months, the crypto show was run by small-cap assets but now large-caps have taken the reins. The large-cap and mid-cap index performed the best through the week with 9.8% and 7.4% returns while small-cap fell 2.3%.

Bitcoin hit five digits going as high as $11,400 but it was Ethereum that was the best performer recording a staggering 30.8% gains for the week. These strong gains have been a rational response to its improving network fundamentals as Ethereum benefits from hitting the most stablecoin and DeFi activity.

ETH market cap grew 15.6% week-over-week leading all other major cryptos, lagging behind the DeFi growth this week. Amidst this explosion, ETH adjusted transfer value surged nearly 78% and averaged close to $1 billion per day. Also, open interest in Ethereum futures surpassed $1 billion.

On Monday, Ethereum developers released a “validator launchpad” on the Medalla testnet to prepare future validators for the transition to ETH 2.0 that will take the second-largest network from proof-of-work (PoW) to proof-of-stake (PoS), which will take years to come to full realization.

This transition aims to improve Ethereum’s scalability issue, extremely necessary for the network as Ether transaction fees continue to surge, growing more than 76% week-over-week.

Over the last week, ETH had an average of $1.5 million daily fees outpacing Bitcoin by about $500k per day although bitcoin fees also showed strong growth, gaining 74% w-o-w.

With ETH fees skyrocketing and the network at near full capacity, Ethereum miners increased the gas limit by 4% to 12.5 million.

Thanks to the increasing fees, miners daily income soared by 60%, as per Sparkpool data. According to Bitinfocharts, mining profitability has been surging since March when it bottomed at $0.0094 to climb to $0.03.

DeFi’s hot streak also had Ethereum contract calls hitting a new all-time high of 3.11 million.

Not just in fees but ETH is also gaining momentum on exchanges. Over the last year, the amount of Bitcoin and Ether transactions sent either to or from an exchange has been relatively equal though BTCs movement has been more extreme. But in July ETH started to pull ahead.

Over the last week, BTC and ETH flows started going in opposite directions — ETH is flowing into the exchange while BTC is flowing out, a net outflow of 278,395 since March 15th.

But it isn’t a good thing for Ether as the outflow suggests lower selling pressure which means investors are looking to take off profit as ETH surges to a level last seen over a year back.

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Author: AnTy

Lebanon Protests Escalates amidst Currency Collapse & Economic Crisis

Hundreds of people have taken to the streets of Lebanon amidst the escalating protests as the country faces a collapse in its fiat currency.

The Lebanese pound, which is officially pegged at L£1,500 to the dollar for two decades fell to L£6,000 to the dollar. The pound started the week at L£4,000 to the dollar and fell 50% amidst panicked trading, local media reported prices as low as L£7,000 to the dollar in some places.

According to Nasser Saidi, a former central bank vice-governor, there was little the government could at this point. “This is a cash market, not your usual forex market. The central bank is no longer able to intervene.”

Demonstrators are blocking roads across Lebanon to protest against the government’s handling of the crisis as their purchasing power plunged. There have also been reports of fire outside the central banks’ office in the northern city of Tripoli.

In response, prime minister Hassan Diab held an emergency cabinet meeting, attended by the central bank governor.

Hedging with Bitcoin

In Lebanon, currently there are multiple exchange rates, the union of money changers at its exchange rate at just under L£4,000 while commercial banks’ at about L£3,000. On Friday, the central bank issued a circular instructing commercial banks to sell at the union’s rate.

The government announced that it would take steps to lower the exchange rate while President Michel Aound said the central bank would inject more US dollars into the market.

The Lebanese pound has tumbled to new lows, having lost 70% of its value since October when protests began — plunging the country into its worst economic crisis in decades.

The volatile price swings were driven by four main factors: printing currency to cover fiscal deficit left by falling tax receipts, uncertainty among currency traders about government policy, the economic impact of coronavirus, and the panic in the exchange market of neighboring Syria where the impact of new US sanctions are expected next week, said Saidi.

The official foreign exchange market has about disappeared in Lebanon since last year after a severe shortage. Meanwhile, in order to stem the outflow of dollars, depositors have been cut off from their savings.

A third of the population is unemployed and about 48% of the population was living in poverty, as per the Government’s April estimate which is expected to hit 60% by the end of 2020.

Amidst this turmoil, Lebanese citizens are turning to bitcoin and cryptocurrencies which are being “embraced as an alternative to dollar assets.”

The plunging currency of Lebanon has the price of bitcoin on peer-to-peer exchange LocalBitcoins ranging from 14 million LBP ($9,200 USD) to 56 million LBP ($37,000 USD).

Bitcoin is gaining popularity and adoption especially in emerging markets that are struggling with currency crises, social unrest, and failed government policies as we first saw in Venezuela then in Argentina and now Lebanon.

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Author: AnTy