Cryptocurrency Market News: Bitcoin stalls, DeFi craze spikes while Chainlink hits new all-time high
The cryptocurrency market is a mixture of red and green. Bitcoin is leading the bearish ‘gang’ while some selected altcoins such as Cosmos, Chainlink and Maker keep flying the bullish flag high above the crypto horizon.
Bitcoin price recovered from the dip to $11,100 but bulls could not sustain gains above $11,600. In other words, the hurdle at $11,600 is still intact. On the other hand, BTC/USD has retested the support at $10,500 and is trading at $11,550.
Ethereum is trading slightly in the green by 1.25% on the day. Like Bitcoin, the cryptoasset recovered from the support at $370 but failed to maintain the momentum to break the barrier at $400. Currently, Ether is valued at $391 while containing the gains accrued in the last 24 hours above the short term support at $390.
Ripple managed to reclaim its third position from Tether (USDT), the largest stablecoin in the industry. Recovery has not been substantial owing to the fact that the highest traded price level on the day is $0.2859. XRP/USD is slightly in the red while exchanging hands at $0.2822. The high volatility coupled with a bullish trend in the short term could easily pull XRP towards the hurdle at $0.30.
As aforementioned some altcoins are soaring to new levels such as Chainlink which hit a new all-time high ($17.00) and made it to the fifth-largest digital asset in the market. Other double-digit gainers in the last 24 hours include Tezos (12.74%), Cosmos (16.89%), IOTA (11.99%), Maker (13.98%), Algorand (27.88%), Band Protocol (19.39) and Swipe (30.56%).
Chainlink has surged massively this week to topple Bitcoin Cash from the fifth spot in the market. LINK is the native token of the decentralized oracle network, Chainlink. The cryptoasset now has a market capitalization of $5.82 billion compared to Bitcoin Cash’s $5.32 billion. At the time of writing, LINK is trading at $16.62 after a shallow retreat from the new all-time high at $17.00.
LINK has had an incredible year, rising from $1.80 to the current market price level. Crypto analysis platform, Messari attributes the surge to the growth of the DeFi ecosystem because Chainlink price feeds continue to play a key factor in the sector.
Decentralized finance (DeFI) has been an incredible run this year. The impact of the rally in the ecosystem continues to impact Ethereum in terms of increasing hashrate and gas fees. According to recent data by Glassnode, an on-chain analysis platform, Ethereum network hashrate has soared to break a 20-month high. The same metric is confirmed by Etherscan. The surge in the hashrate usually indicates a network’s heath level. Traders are using the hashrate metric to gauge the potential of Ethereum extending the bullish momentum to higher levels.
The increase in the use of DeFi projects is said to be impacting the Ethereum network resulting in the high hashrate as the network clogs. Transaction costs, referred to as gas fees have been surging too amid heightened activities in DeFi. The increase in gas fees has positively impacted miner revenues that have hit an all-time high according to researchers at Glassnode.
Miner revenue from fees on Ethereum has skyrocketed in the past two months, reaching an all-time high of around 18% (30d moving average). Conversely, this has brought the Fee Ratio Multiple (FRM) to lows never seen before on Ethereum. Created by Teo Leibowitz , the Fee Ratio Multiple (FRM) is defined as the ratio between the total miner revenue and transaction fees. FRM indicates how secure a chain is once block rewards disappear.
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- High Fees Make BTC Less Appealing for Remittances in Africa: ‘Pray Blocks Happen Quickly’ | Emerging Markets Bitcoin News
- Bitcoin Mining Can Be Profitable, If You Generate The Power
- $12K Bitcoin Price in Sight as Retail, Institutional Traders Turn ‘Greedy’
- Market Wrap: Stuck at $11.5K, Bitcoin Surpasses 25K Locked in DeFi
- Stock Trader Sees Bitcoin Hitting $14K on “Re-Accumulation” Sentiment
High Fees Make BTC Less Appealing for Remittances in Africa: ‘Pray Blocks Happen Quickly’ | Emerging Markets Bitcoin News
Bitcoin trading volumes are on the rise on the African continent despite the ongoing concerns about the high network fees. Data shows peer to peer bitcoin trading platforms recorded spiked growth in volumes starting in April. This was the same time as many countries implemented lockdown measures.
Anecdotal evidence seems to suggest that Covid-19 related regulations are the reason for the volume growth. This “evidence” is observed in Nigeria, already one of the biggest cryptocurrency markets in the world. Some observers from the country say the struggling economy, as well as the volatile currency, are helping to build new momentum for bitcoin as well as altcoins.
To illustrate, they show how the corona virus-induced drop in oil revenues has put increased pressure on local currency. Increased pressure on local currency inevitably leads to capital flight and scarcity of foreign currency.
Available data shows that between March and August 2020, the Naira (the Nigerian currency) has depreciated by 33%, from about 360 to 480 units for every US dollar. The ensuing shortages of hard currency has resulted in some banks limiting the amount of US dollars Nigerians can withdraw each month.
This scenario, which has played out in many African countries similarly affected by the closure economies, inevitably leads to growing interest in alternatives like cryptocurrencies as Nathaniel Luz, Lead for Dash in Nigeria explains.
Luz says the “increased instability of the Naira” as led to “more Nigerians keeping their money in crypto.”
The high transactions fees
Still, as Luz argues, the high transaction fees associated with a bull market, particularly on the Bitcoin network, are proving to be an unwelcome dynamic.
“Bull runs generate lots of excitement and optimism for the crypto space in general, serving as a good advert for newbies to get on board. With every bull run we see increased fees and slow confirmation times for bitcoin transactions due to the mempool being full,” explains Luz.
This makes the leading cryptocurrency less appealing as an alternative means of transacting or remitting funds.
Echoing Luz sentiments is Chris Maurice, CEO at Yellowcard Financial, the digital currency exchange that helps Nigerians in the Diaspora to send funds home using bitcoin.
According to Maurice, his organization is “seeing growth in volumes” although he admits that the “high transaction fees have definitely impacted us on the operational side, however.”
To try and mitigate the problem, Maurice shares a strategy his company has adopted to minimize the impact of the high fees.
“We move BTC constantly, and at this point, I only move bitcoin at around 2-3 am EST while everyone in the US is asleep and the chain is a little calmer. I’ll send with a ‘reasonable’ fee of $20+ and pray that blocks happen quickly and the coins don’t get caught for 24 hours or more.”
Using higher fees help get transactions confirmed faster, yet as one bitcoin trader from Zimbabwe, William Chiu explains, the final transaction cost will be much higher.
The final cost renders moot the appeal of bitcoin for remittances adds Chiu:
“The challenge we have is that we pay a premium already to get the BTC, then when we need to make a transfer, the fees are high, which further impacts us.”
In countries like Zimbabwe, banks are barred from interacting with cryptocurrency exchanges. That leaves traders with the informal crypto markets as the only source for getting bitcoin. For their effort, informal dealers charge a premium on top of the going bitcoin price.
The premium ranges between 5% and 10% and this is before adding the network transaction fee to the total cost.
“(At the moment) fees of about $8 help to get a transaction approved (confirmed) quickly, or else, people can play the lottery and pay a lower fee and possibly wait 3 days for it to clear,” explains Chiu.
This, therefore means the sending party will have to incur a minimum cost of $13 just to send bitcoin worth $100. Such costs make remitting funds via bitcoin less appealing when compared to traditional remitting channels.
Newcomers to cryptocurrency
Meanwhile, as Gray Jabesi, a founder at Crypto University and Buy Bitcoin Malawi argues, the bull market has had both positive and negative aspects to it. He explains the positive part first:
“We are seeing increasing volumes from beginners that are in it for speculation but we also still see a steady growth of those that want cryptocurrency because it works for what they want to do.”
Still, Jabesi admits the same bull market is making bitcoin less cost-effective for border remittances, the common use case for cryptocurrencies on the African continent. He ties the growing interest in alternative coins to BTC’s high network fees, as BTC’s fees rose as much as 550% last month.
Opportunity for BCH
“We are seeing a shift, by those that want to use cryptocurrency for legitimate reasons, from bitcoin to mainly bitcoin cash (BCH). In some cases, we also see interest in XRP.”
According to Jabesi, BCH seems to be the preferred alternative because it is “not only cheaper and faster, but also because it is accepted as payment on many online retail market places.”
Meanwhile, Maurice who insists that bitcoin remains king despite the high network fees, admits they are also looking to add BCH on the Yellowcard platform.
We get requests pretty often for BCH, and we’re actively working on listing it. BTC is still king, however, especially in Africa. I think even with the high fees right now it would take a large educational push around BCH to get people switching.
Dash is also seeing growing interest by users that want faster and cheaper fees. According to the Dash leader in Nigeria, one platform Coinprofile.co has already added Dash to the list of supported coins.
It would seem BCH, Dash and XRP are all poised to diminish BTC’s dominance in Africa, but as Maurice suggested, an educational campaign has to accompany any marketing push.
Success on this front will help these cheaper and faster alternatives to get more from this growing market.
Will the high network fees help the cause of alternatives to BTC? Share your thoughts in the comments section below.
Africa, Bitcoin, bitcoin cash, bitcoin remittances, Bull run, Coinprofile, Cryptocurrency Exchange, currency depreciation, dash, High network fees, naira, Nigeria, Oil revenues, XRP, Yellow Card
Bitcoin Mining Can Be Profitable, If You Generate The Power
BROOKLYN, NEW YORK – JULY 4: Six meters placed by National Grid measure natural gas consumption in a … [+] residential apartment building July 4, 2017 in Brooklyn, New York. National Grid is the fifth largest distributor of natural gas in the United States. (Photo by Robert Nickelsberg/Getty Images)
The New York Finger Lake Region is known for its wine and glacial formed waterways. It is a beautiful place. And it now hosts one of the largest Bitcoin mining facilities in the U.S.
Greenidge Generation is a former coal-fired electrical power plant that has converted to natural gas. They supply electrical power to New York State’s residents. Every day Greenidge has to bid in a competitive power market – sometimes, they make a profit when energy demand is higher. The company has been in business since 1937 but, in the last decade, suffered against cheaper power sources. The facility was mothballed in March 2011. Competition from cheaper shale natural gas supplies and coal exports from China put the old company into economic distress. Atlas Holdings bought the plant in 2014 and converted it to natural gas in 2017.
Atlas, which buys and transforms distressed industrial companies, helped turn the company into a more efficient energy model. But profits were always tight. It was in 2018 that CEO Dale Irwin and CFO Tim Rainey had the idea to use excess capacity to mine Bitcoin. This was a unique idea in the United States. Rainey says, “Cryptocurrency mining was an idea that evolved following discussions with our Board and Leadership team, as we explored the best way to utilize the unique assets we have at the facility. Our Board approved a plan to pursue Bitcoin mining.”
Dale Irwin said, “We started with a couple of S9’s and some GPU rigs in early 2018 to familiarize ourselves with the economics of the machines and learn how to operate and run them. We turned that into a small test pilot of several hundred machines from many different manufacturers in May of 2019. After completion and analysis of the test pilot, we built the current data center within four months, starting our larger-scale mining operation in January 2020.” They currently operate 8,500 of the latest generation miners from Bitmain and other manufacturers.
Greenidge is using over 20 megawatts (M.W.) of power to mine Bitcoin, which makes it the largest energy company in the U.S. with this kind of strategy. In comparison, 20MW is not very big, next to other countries. There are larger Bitcoin mining facilities. The University of Cambridge’s Bitcoin Electricity Consumption Index shows that global power use is estimated to be 7.25 Gigawatts (G.W.), where China is shown to use a bit over 71%.
Greenidge wants to increase its energy consumption. The company has plans to use the plant’s total capacity of 104MW in the next year.
Mining Bitcoin and cryptocurrency is an energy-intensive enterprise. Some argue that it is a waste of energy and that digital assets are a purely an environmental drain.
The company calls itself a power plant-mine hybrid, where it can generate more value being able to provide power to New York’s grid or mine cryptocurrency. The choice to one or the other depends on what is more profitable on the day. Irwin continued to say, “Without crypto mining, it was economically unfeasible for us to provide capacity and energy to the state grid year-round and to continue providing employment opportunities to the local community, which provides the bulk of our workforce.”
This model is unique as mining Bitcoin is not a trend in the power industry. If there are other power companies in similar situations, could this be a sustainable way to add income?
Tim Rainey said, “Without the mining operation, we would not be running most of the time, but if we ran around the clock, year-round, we would generate revenues of about $20/MWh. Bitcoin mining revenue with the latest generation hardware ranges anywhere from $70/MWh to north of $200/MWh depending on price, global hashrate and difficulty.”
Time will tell, but Rainey did add, “We’ve been able to capture over $500k additional revenue during hours when we would not otherwise have been dispatched to be online. Additionally, we are unique in that the same highly-skilled engineers, electricians, and other technicians that are on-site running the power plant 24/7 also help operate and maintain the mining hardware.”
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Author: Robert Anzalone
$12K Bitcoin Price in Sight as Retail, Institutional Traders Turn ‘Greedy’
After recovering 6.3% from a drop to $11,200 on Aug. 11, Bitcoin (BTC) price appears to be gearing up for a third run on the $12K mark.
This comes after a week of bullish news which included Nasdaq-listed investment firm MicroStrategy purchasing 21,454 BTC as protection against the weakening U.S. dollar, Coinbase exchange offering Bitcoin-backed loans, and the revelation that BlackRock and Vanguard are major holders of MicroStrategy shares.
Cryptocurrency daily market performance snapshot. Source: Coin360
The increasingly bullish sentiment extends across the entire crypto sector and proof of this comes from altcoins like Tezos (XTZ) and Chainlink (LINK) surging above previous all-time highs and a handful of DeFi-related tokens following suit.
Crypto Fear & Greed Index. Source: Alternative.me
The Crypto Fear & Greed Index currently shows that sentiment among investors is high as the indicator reads ‘Extreme Greed’. This is a sharp contrast from July when the indicator read “Fear” and crypto investors were afraid Bitcoin price would drop back into the low $10K range.
The daily timeframe shows Bitcoin continuing to make higher lows as the price consolidates into a tighter range between $11,200-$11,800. In a recent newsletter to clients, market intelligence firm, Stack Funds said:
“A retest of the $12,000 level is in sight as the formation of a bull flag crystallizes. Stack believes that the current market structure will continue to remain intact unless the $10,500 level is breached. Given the current economic backdrop coupled with the weakening dollar, we should continue to see bullish momentum moving forward for Bitcoin.”
The firm also pointed to Bitcoin’s growing correlation with gold, noting that BTC price corrected 2.7% as gold retraced by 9% earlier this week.
According to the researchers, a unique characteristic of Bitcoin is that the asset is somewhat shielded from wider market volatility as its correlation between gold and equities shifts depending on the price action with each market. Stacks Funds said:
“Despite the recent spike in BTC-Gold correlation touching March highs, the record decline in gold this week has not impacted Bitcoin price significantly, as the digital asset catches back on to the equity-like relationship to maintain its upward price trajectory.”
Bitcoin daily price chart. Source: Coin360
Altcoins also recovered well from the Aug. 11 correction and Ether (ETH) made waves managing a strong breakout above the $400 resistance level. Ether price rose by 7.88% to a new 2020 high at $430 and XRP price rose by 4.04%.
Chainlink (LINK) also reached a new all-time high after rallying 16% to $18.37.
According to CoinMarketCap, the overall cryptocurrency market cap now stands at $367.4 billion. Bitcoin’s dominance index currently at 59%.
Keep track of top crypto markets in real time here
Market Wrap: Stuck at $11.5K, Bitcoin Surpasses 25K Locked in DeFi
Stock Trader Sees Bitcoin Hitting $14K on “Re-Accumulation” Sentiment
Bitcoin (Symbol: BTCUSD) has enough momentum left to attempt an extended bull run towards $14,000, says Jacob Canfield.
The Signal Profits founder placed the benchmark cryptocurrency on a Fibonacci Retracement graph, a set of horizontal levels that indicates where the supports and resistances are most likely to occur. He noted that BTCUSD had ample of support near the $10,500 level, adding that holding above it would ensure a smooth upside move towards $14,000.
“As long as $BTC can hold $10,500 support, I think we continue to move up to test the 1.618 extensions,” Mr. Canfield tweeted. “1.618 is at $13k and 2.618 is around $14,800.”
The statement followed Bitcoin’s third failed attempt to break above $12,000. Last week, the cryptocurrency fell by more than $1,500 within minutes after testing the said level. And this week, it almost repeated the same pullback move, albeit falling less vigorously than the last time.
Traders caught the price near $11,500, suggesting that there were enough takers for Bitcoin on the said floor. The price rebounded modestly towards $11,600, only to find itself stuck inside a range between $11,650 and $11,500.
Josh Rager, a crypto-focused market analyst, stated Wednesday that BTCUSD needs to break above $11,900 before even thinking about hitting levels that are beyond. Nevertheless, he, like Mr. Canfield, also acknowledged the power of $10,500 in keeping the pair’s upside bias intact.
“Reclaim $11,900 on a daily close and we go up to $12,500 [and above], ” Mr. Rager stated. “Not worried one bit in this range unless price breaks below $10,500.”
$10,500 flipped into support after serving as a strict resistance level for almost a year. Bitcoin repeatedly failed to jump above it, validating a higher selling pressure. Only today, the selling pressure has turned into a buying one.
That makes $10,500 a borderline level to define Bitcoin’s short-term bearish/bullish bias. Breaking below it would make it a resistance level, which might end up creating an additional barrier between the cryptocurrency and its $14,000-price target.
“It is always possible that a ‘Bart Simpson’ trading pattern will be repeated in case of negative news on the market,” Sergei Khtirov, chief executive of Listing Help, told Financial Magnates.
“In this case, a retest of the level of $10,000 is quite possible, which remains a significant psychological benchmark,” he added. “Falling below it will mean the end of the recent bull run.”
Despite the concerning bearish technicals, Bitcoin is still looking ahead for an upside move thanks to supportive macro fundamentals.
The cryptocurrency rose by more than 60 percent earlier this year on increasing bids for safe-haven assets among investors. Their demand appears out of fears of inflation led by the US Federal Reserve’s open-ended stimulus package and near-zero interest rate policy.
The decision sent the US bond yields lower to 0.5 percent. It also made the US dollar the weakest in the last two years.
Just this week, public company MicroStrategy bought $250 million worth of Bitcoin as their tactical measure against the potential inflation. Before them, it was veteran hedge fund investor Paul Tudor Jones who had allocated 1-3 percent of his entire portfolio to Bitcoin futures.
Konstantin Anissimov, Executive Director at CEX.IO, told Bitcoinist.com that the events marked the beginning of a greater institutionalization of Bitcoin. Lower interest rates, followed by poorer returns, led investors to seek profits from cryptocurrencies. And the trend may continue ahead.
A listed company, said Mr. Annissimov, with strict requirements for financial diligence to its shareholders, has acquired a substantial amount of BTC, publically and strongly announced its decision and has taken a determined stance that this choice will not have a detrimental effect on the company’s share prices or its corporate social responsibility.
“This sends a signal of wide market acceptance of Bitcoin as a serious asset class for investment, and we are seeing the market react positively to the news,” he added.
Bitcoin was trading at $11,512 at the time of this writing.
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