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Global Uncertainty, Hacker Plunge Bitcoin on Thursday

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Bitcoin

Bitcoin Price Plunges to $9,050 on Growing Uncertainty

The world’s most dominant cryptocurrency Bitcoin declined to $9,050 on Thursday after failing to break the $10,000 resistant level.

The coin plunged from $9962 on Thursday to $9,050 a coin before retracing on Friday during the Asian trading session to $9,486 as of 1:00 pm Nigerian time.

This was after the Federal Reserve said the economy may take several years to recover from the COVID-19 pandemic downturn despite the huge stimulus being pumped into the economy by Donald Trump. The unexpected comments led to a huge selloff in the US stock market and weighed on other global assets as investors remain apprehensive amid rising global uncertainty.

“A switch to ‘risk-off’ in global markets could lead to further downside pressure for major cryptocurrencies,” said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds.

The drop was coming after several Bitcoin focused media have reported a substantial increase in the coin acquisition by large buyers within the crypto ecosystem, known as whales.

As predicted by Investors King on Thursday, the activity of the Whales would help establish strong support for the coin above $9,000 level but not enough to open up a $10,519 key resistance level. BTCUSDDaily 3Capital inflow from outside investors or funds from institutional investors is needed to support price above the current level through $10,519.

This may not happen in the near-term given global risk and also cryptocurrency exposure to hackers. On Thursday, 400 BTC estimated at about $4.1 million stolen from Bitfinex, a cryptocurrency exchange, in 2019 was moved to an unknown address, according to a twitter bot Whale Alert.

While another big transaction estimated at about $1.5 billion was performed by an unknown wallet on Tuesday. A combination of all these is fueling a notion that whales might be preparing to dump their holdings and plunge the digital currency below the current level.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Bitcoin

Fintech CEO: George Residence Bitcoin Acceptance Has Policy Implications, More than Simple Brand Awareness

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bitcoin to Nigerian Naira

Last month, luxury hospitality icon, George Residence, announced that it would be the first hotel in Nigeria to accept Bitcoin. Most reviews of this announcement came using the lens of brand awareness, both for the property, as well as cryptocurrency. But, Richard Gardner, today, offered a different take on what’s unfolding in Nigeria.

“When we see news like this, it’s easy to trumpet the mainstream appeal of Bitcoin, and, over the past six months, there certainly has been a huge increase in familiarity with the alternative to fiat currency. Between business icons like Mark Cuban and Elon Musk openly supporting the growth of cryptocurrencies, it is easy to read news like this as just one in a line of businesses moving to accept a form of payment that’s becoming more and more popular. But, there’s something else at play here,” noted Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

In his announcement, George Residence CEO Yanju George said that, not only was he accepting Bitcoin, but that he planned to make Bitcoin the company’s primary reserve asset, noting that “[w]e have allocated around 50% of our cash reserves to Bitcoin… We hope to increase that as time goes on. Bitcoin is the currency of the future and it is only right that we are strongly positioned so we do not get left behind.”

“I think if you look at the policy behind the move, you’ve got to see this as a hedge against inflation. The Naira has had significant struggles. We’ve seen a surge in Bitcoin in 2021, but, at the end of the day, the surge means different things in different places. In the United States, folks may be looking at Bitcoin as an investment opportunity, but in places like Nigeria, Bitcoin and cryptocurrencies offer more than that. They are really a way to make sure that the assets you have today aren’t devalued over the next six months. Unchecked inflation is not just an economic problem; it’s a problem that deeply affects the citizenry when the fiat currency they rely on to purchase food and energy and life essentials is worth a fraction of what it was last year. In places with rampant inflation, Bitcoin is being considered by the populace as a potential solution to a number of institutional problems,” explained Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“As Nigeria looks towards the future, there is a lot of work to be done, to be sure. But, there is much to be optimistic about, as well. The fact that the citizenry is so engaged in cryptocurrencies means that, if the country can put the pieces together and get a handle on infrastructure-based issues, not the least of which is inflation, then it can begin to look at how it can invite innovation and enhance technology’s role as a tool in its economic engine. The interest is already there,” noted Gardner.

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Data Suggests Only Whales Moves Dogecoin

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Dogecoin

It was Doge day afternoon all over again on Wednesday as Dogecoin (DOGE) continued its assault on the cryptocurrency market capitalization rankings. The meme coin overtook XRP to become the fourth-largest cryptocurrency by implied market capitalization after climbing to an All-Time High of $0.69 per-coin valuation  — a target that was specifically set by traders on social media.

But cryptocurrency’s latest media darling may not be as wholesome as it seems. For all the hype surrounding Dogecoin (and its de facto master, Elon Musk), publicly available data suggests relatively few people are actually using the blockchain and those who do use its account for an incredibly large portion of its overall activity.

Consider that the dollar value of coins sent across the Dogecoin blockchain on Tuesday exceeded $58 billion. That figure was 70 percent higher than the amount transferred on Bitcoin ($34 billion) and 260 percent higher than on Ethereum ($16 billion).

Digging into on-chain data further, we see that despite Dogecoin moving a higher value of coins than the two largest cryptocurrencies in the world, it achieved this with a mere fraction of their transactions.

Over 1.4 million transactions were counted on the Ethereum blockchain yesterday, according to data from Bitinfocharts, while close to 300,000 were counted on Bitcoin. Compare this to just 76,000 recorded on the Dogecoin blockchain, and an apparent wealth gap begins to emerge.

Indeed, when looking at Dogecoin’s average transaction value on the day in question, it stood at almost double that recorded on Bitcoin (BTC). The average DOGE transaction value stood at $800,000, compared to $420,000 on BTC. Its statistics relative to Ethereum paint an even more dire picture — Dogecoin’s average transaction value exceeded Ethereum’s by 8,000 percent, despite processing only 5 percent of the number of transactions.

Combined with the long-standing reality that one single address holds 28 percent of all coins in existence, while just 12 accounts for 67 percent, it becomes clear that Dogecoin isn’t exactly the people’s champion that interested parties would have the public believe.

A recently published report by Galaxy Digital piled on the misery regarding Dogecoin’s general lack of authenticity as a true cryptocurrency project. Titled “Dogecoin: The Most Honest Sh*tcoin,” the report highlighted the fact that Dogecoin’s GitHub repository (where updates to the blockchain’s code are logged by developers) hasn’t been touched since 2017. What’s more, the number of fully synced nodes (computers running copies of the Dogecoin blockchain) is just 26 percent of the overall node count, suggesting few people are willing to make the effort to maintain the blockchain’s network security.

But even if the Dogehouse seems like a ghost town, the glaring reality remains that Dogecoin is the best performing digital asset in the cryptocurrency space. The coin has recorded 14,000 percent growth since Jan. 1, when it was priced at a fraction of a cent.

Both credit and blame for Doge’s seemingly irrational ascent have been placed on the “Dogefather” himself, Elon Musk, who has taken great pleasure in posting Doge memes to his 52 million followers on Twitter throughout much of 2021.

However, it should also be noted that the coin’s recent peak of $0.69 is the same price target set by Reddit traders intent on artificially pumping DOGE’s valuation. The price point was originally intended to be reached on April 20 — a joke on top of a joke on 4/20 day. Dogecoin only reached a price of $0.420 at the time (boom), but now, a little over two weeks later, it has finally achieved its jocular goals. The ultimate price point being pursued by traders is $1.

If more evidence is needed that markets are not always rational, look no further than this year’s GameStop pump, where the share price of a near-dead brand increased by over 9,000 percent.

“Dogecoin has always been a joke, and the joke keeps getting funnier,” stated the Galaxy Digital report. Author of the report and head of firmwide research at Galaxy Digital Alex Thorn did praise Dogecoin for its lack of pretense, noting that the coin’s fortunes weren’t tied to foundation announcements or developer promises and that its only goal was to elicit a reaction.

“Dogecoin’s longevity is ensured so long as one truism remains: people love a good joke,” Thorn ended.

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A New Shift In Bitcoin Mining, More Bitcoin Hashrate Comes From North America Than China

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The U.S. is slowly increasing its share of the Bitcoin hashrate, although the majority of Bitcoin mining is still based in China, there are signs it is beginning to shift elsewhere.

Chun Wang, the co-founder of one of Bitcoin’s largest mining pools, F2Pool, reported that China represented less than half of its hash rate during April 2020. Wung noted it was the first time the pool had seen Chinese miners represent a minority of hash rate in its eight years of operation. “The shifting is real,” he said.

Wang reposted data published April 22 by Digital Currency Group’s Barry Silbert, which revealed that the U.S.-based Bitcoin mining pool, Foundry, had climbed to rank among the top 5 pools globally during April, commanding a 7.6 percent share of the hashrate.

“Bitcoin hashrate is quickly shifting from China to North America,” Silbert claimed. The leading pool remains AntPool, which is operated by Chinese mining hardware manufacturer Bitmain, with an 18.6 percent share of the total hashrate.

The University of Cambridge calculated that China’s mining dominance was around 65 percent in April 2020. Noting those figures in January 2021, BTC mining publication Miner Daily estimated China’s share had fallen to 55 percent of BTC hashing power by the start of this year, with the U.S. accounting for 11 percent.

On April 30, Cointelegraph reported that China’s crypto mining operations may be set for stricter regulations in the future, which could further fuel the country’s hashrate exodus. China has also recently been examining miners’ power usage in light of its own carbon commitments.

In late February, it was reported that authorities of the Chinese autonomous region of Inner Mongolia proposed closing down all local mining facilities to reduce energy consumption in the region. The region accounts for as much as 8 percent of global hash.

In an article on May 5, Bitcoin podcast host Marty Bent said that the F2Pool findings are a confirmation of a trend in the mining world of hashrate production becoming more geographically distributed.

He added that this would help dissipate some of the “China controls mining” FUD surrounding the potential for the country’s central government to attack the network.

“It is great to have some data coming from Chinese pools that proves the percentage of overall hashrate production is being reduced within China’s borders.”

The FUD surrounding Bitcoin’s energy consumption and environmental impact may also reduce as more mining operations switch to renewable energy, especially in the U.S. which has tighter regulations.

According to a Nasdaq report on May 4, Texas has become a mecca for Bitcoin mining farms due to its low energy costs and the fact that the majority comes from renewables such as wind and solar.

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