Grayscale Investments bought up to 33% of all newly minted bitcoin over the last three months, as the asset manager continues to stockpile major cryptocurrencies.
The investment fund added 60,762 BTC to its Bitcoin Trust Fund between February 7 and May 17, a researcher posted on Reddit. That’s the equivalent of 607 BTC acquired by Grayscale each day during the 100-day period. Grayscale became aggressive in its acquisitions after April, as Bitcoin’s third halving hype reached fever-pitch.
About 34% of BTC added during the three months were bought in just 17 days amid a checkered spike in the price of BTC, targeting $10,000. As of May 17, the Grayscale Bitcoin Trust Fund had a total of 343,954 BTC under management, up 21% from 283,192 BTC held 100 days earlier.
In value terms, the portfolio has soared to $3.37 billion from $2.77 billion, at prevailing market prices.
The Redditor commented:
For good measure, 60k bitcoins in last 100 days is about 33-34% of all newly minted bitcoins in that period, give or take. And Grayscale is just one of the many ETF’s that people who don’t want to fiddle with private keys etc, can use to acquire bitcoin, albeit the largest one.
Grayscale operates ten cryptocurrency investment products focused on institutional investors. It currently has more than $3.7 billion worth of digital assets under management. Funds cover ethereum, bitcoin cash (BCH), zcash, XRP, and more.
The digital asset manager allows institutional investors to gain exposure to assets such as BTC or ETH, but without actually owning any coins. This means each Grayscale fund has to hold large amounts of specific coins in its portfolio.
Grayscale’s aggressive crypto purchases have recently been spotlighted around ethereum. At the end of April, it had bought about 50% of all newly mined ETH since the beginning of this year. It now holds the equivalent of 1.1% of ETH in circulation.
What do you think about Grayscale’s purchase of major cryptocurrencies? Let us know in the comments section below.
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Author: Mining by Jeffrey Gogo
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Bitcoin Price Prediction: BTC/USD chance of hitting $20,000 skyrocketing – Confluence Detector
After encountering another rejection at $10,000, Bitcoin price is struggling to hold above the intraday support at $9,700. Since Monday, the bulls’ focus has been to break the resistance at $10,000. However, just like Monday and Tuesday, BTC/USD is facing a growing bearish grip on Wednesday.
For instance, at the time of writing, BTC/USD is valued at $9,758 after losing 0.26% on the day. The daily chart shows the possibility of sideways trading taking precedence. A glance at the RSI indicates that the prevailing trend is neither bearish nor bullish. Buyers and sellers are equally strong. Also doubling down on the sideways trend is the MACD; currently in a level motion at 539.
Also read: Bitcoin price rallying to $120,000 as halving impact precipitates – eToro’s analyst Simon Peters
The options traders mainly on CME and Deribit exchange platforms show overwhelming strength and believe that Bitcoin price would continue to rally in the near future. According to a report by Cointelegraph using data by ecoinmetrics, Bitcoin has a 9% chance of skyrocketing to $20,000 by the end of 2020.
However, the traders on these platforms are particularly cautious when it comes to the medium-term trend. It is known that Bitcoin does not rally immediately after the halving. A rally in the past two halvings kicked in six to eight months after the events. This means that even if there will be a rally in the wake of the third halving, the medium-term trend remains uncertain.
From a confluence perspective, Bitcoin is facing growing resistance at $9,815 as highlighted by the previous high 15-minutes, the Bollinger Band 15-minutes upper curve, the Fibonacci 23.6% one-day and the previous high 4-hour. A break above this zone will be good for Bitcoin as it will allow the bulls to focus on breaking above $10,000. However, it is vital that buyers start preparing for the next hurdle at $10,019 as shown by the pivot point one-day resistance one and pivot point one-month resistance one.
On the downside, immediate support is established at $9,714; a zone where the SMA 50 1-hour, the previous low 4-hour, and the Bollinger Band 4-hour middle curve meet. Another key support holds the ground at $9,511 as highlighted by the previous low one-day and the previous month high.
First Mover: Bitcoin Just Got Easier to Mine, but for How Long?
Bitcoin’s mining “difficulty” has undergone its first adjustment since last week’s halving, dropping the figure by 6%.
Mining difficulty is part of an automatic procedure that takes place on the Bitcoin blockchain every 2,016 data blocks, or roughly every two weeks. The mechanism is supposed to help keep the blockchain network humming along steadily: When computational power flags, the difficulty of finding new bitcoins automatically adjusts downward, helping to restore miners’ profitability and encouraging them to crank their machines back up.
That’s what happened on Tuesday when the mechanism automatically responded to the miner shakeout that took place following last week’s quadrennial halving on the blockchain. In the halving, the number of new bitcoin produced with every data block got cut in half, so it took a steep toll on miners’ profitability.
A drop in mining difficulty theoretically favors miners that have remained in the game. With less competition from the miners that got shaken out, they stand to benefit from a newly improved chance of winning freshly minted bitcoin.
But a drop in difficulty can also make obsolete equipment profitable again.
A report Tuesday from data firm Coin Metrics found many of Bitmain’s Antminer S9s bitcoin-mining computers, which saw their heyday in 2018, powered up in response to bitcoin’s recent price increase past $9,000. The halving made them less profitable, but the easing in mining difficulty should help to improve margins.
It doesn’t hurt that the S9s are available at rock-bottom prices on the secondary market, from $20 to $80. With such a tiny capital investment, the only real consideration is whether revenue from mining exceeds the costs, primarily electricity.
The dynamic shows “the degree to which mining with old hardware may be viable given favorable conditions, and the ease with which this less-expensive hardware can be deployed,” according to Coin Metrics.
Due to what has been generally an ever-increasing amount of computational power on the network, bitcoin’s mining difficulty has almost always trended upwards. That’s not to say there haven’t been dips, such as the precipitous drop at the end of 2018, after as many as 800,000 miners turned off their rigs following deep price drops.
But the current difficulty is still well over double what it was this time last year – a sign of just how competitive the mining business has become.
At bitcoin’s current price of $9,776 and using the latest Antminer S19 Pro, a single miner paying the U.S. average electricity price of $0.13 per kWH could expect a profit of $0.97 a day, according to profit calculator NiceHash.
So unless there’s a meteoric price rise, a subsequent increase in difficulty would quickly erase the incremental profit miners gained from Tuesday’s difficulty dip.
And if the chart above is anything to go by, that’s only a matter of when, not if.
Taken alone, the dynamic shows that, while the network’s design comes with temporary adjustment mechanisms to help keep miners on the network, it’s ultimately bitcoin’s market price that’s most influential in fattening their profit margins.
More broadly, some observers of the network worry that there’s no end to the longer-term trend of bitcoin mining power consolidating in a handful of major entities. These stronger hands have enough capital to buy equipment, enough equipment to assure steady revenues, the ability to purchase electricity at wholesale prices and the fall-back resources to weather market downturns.
With total network hash rate down 20%, it’s possible mining difficulty could well fall again at the next adjustment date in two week’s time.
But Tuesday’s drop in mining difficulty will likely will prove a blip in that longer-term trend, and bitcoin’s mining power will continue to consolidate. Ultimately, many of the smaller hobby miners who once dominated the network will get priced out.
In fact, greater concentration was “harmless, as attacks on bitcoin incur an opportunity cost that scales with the amount of hash power an attack controls,” he said. “An attacker with a lot of hash power would incur a large cost.”
Tuesday’s difficulty adjustment might help keep those S9 machines online for just a little while longer.
Eventually, though, only a rocketing bitcoin price would be enough to save them.
Tweet of the day
BTC: Price: $9,750 (BPI) | 24-Hr High: $9,899 | 24-Hr Low: $9,577
Trend: Bitcoin is trapped in a narrow trading range between $9,450 and $10,000 for the third straight day.
Technical indicators and on-chain metrics favor a range breakout, or a sustained move into five figures, however. For instance, the 50-day and 200-day averages are about to produce a golden crossover, a long-term bull market indicator.
Further, the weekly chart MACD histogram and the relative strength index are reporting bullish conditions, validating last week’s violation of the descending trendline connecting the June 2019 and February 2020 highs.
Meanwhile, the number of bitcoins held on exchanges has dropped to 2,324,674, the lowest level since May 20, 2019, according to data provided by blockchain intelligence firm Glassnode. The metric has declined by over 11% in the past two months and indicates strong holding sentiment in the investor community.
The Puell Multiple, too, has declined to levels below 0.50, indicating the cryptocurrency is undervalued. The metric is calculated by dividing the daily issuance value of bitcoins in U.S. dollar terms by the 365-day moving average of the daily issuance value.
A range breakout, if confirmed, would likely yield a move toward $10,500 (February high). A violation there would invalidate the lower-highs pattern seen on the weekly chart and strengthen the case for a re-test of the 2019 high of $13,880.
Alternatively, if the buyers fail to defend the lower end of the trading range at $9,450, a deeper decline to the 50-week average support at $8,795 could be seen.
Author: Omkar Godbole
Bitcoin is pouring out of exchanges as price flirts with $10K
Users continue to withdraw Bitcoin from exchanges in record numbers, as the original king of crypto inches towards $10,000.
Liesl Eichhols, a growth strategist at blockchain research firm Glassnode, wrote about the trend in Glassnode’s latest weekly report. The report noted that Bitcoin’s overall market health and the sentiment of its investors, based on data collected by Galssnode, is in a strong place.
And while not overly bullish, there’s still a sense of optimism in the market. It’s reflected in the price of Bitcoin, which continues to flirt with $10,000. But it’s also reflected in another data point: how much Bitcoin is being withdrawn from exchanges.
According to Glassnode, users are withdrawing their Bitcoin in droves. Bitcoin holders have been withdrawing from exchanges ever since the March 12 crash in a withdrawing spree that has become “the largest and most prolonged BTC exchange balance downtrend in Bitcoin’s history.”
This activity, Glassnode postulates, may be attributed to bullish sentiment in light of Bitcoin’s halving—that once-in-four-years event that caused quite a ruckus within the crypto industry last week—considering that the trend began in the weeks leading up to the halving and has continued after it.
“A possible explanation for this decrease is that investors are withdrawing funds from exchanges to hold in cold storage, implying a longer-term outlook,” the report stated.
Data that suggests small account holders are rising (alongside the balance in Bitcoin whale’s wallets, as well) corroborates this view, Glassnode wrote in its report.
But there’s another factor that could explain why Bitcoin holders are moving their funds away from centralized exchanges.
During the Black Thursday market crash, the Seychelles-based BitMEX exchange suffered a technical snafu that may have contributed to Bitcoin’s historic plunge during the macro market selloff. Once the place to trade Bitcoin futures, BitMEX has since lost major market share to competitors, and exchange withdraws may play into a trend of distrust that exchanges like BitMEX have engendered in Bitcoin investors.
Instead, Bitcoin holders may be opting to trust themselves with their coins more—which is how Bitcoin was intended to be used in the first place.
Author: Decrypt / Colin Harper