The year 2020 was a fantastic year for the crypto investors who earned impressive profits from investing in the world’s largest cryptocurrency, Bitcoin.
According to data presented by BlockArabia, US crypto investors earned the most from Bitcoin, with their profits hitting $4.1bn in 2020, three times as high as the next country on the list, China.
US Bitcoin Earnings Bigger Than Those of China, UK and Japan Combined
The last six months have been pretty dynamic for the global crypto market, illustrated by Bitcoin soaring to an all-time high of nearly $65,000 in April before crashing below $37,000 in May. It is currently trading around $34,000, according to CoinMarketCap.
However, last year was a different story. Practically all countries recorded their biggest realized investment gains towards the end of 2020 as Bitcoin’s price surged from $11,471 in mid-October to just over $29,000 by the end of the year. That was a lucrative time for the US investors, who made the majority of their gains from activity on Coinbase.
Behind the United States as the top country by Bitcoin earnings, China ranked second with $1.1bn in investment gains, revealed the Chainalysis data. That is surprising because China has recorded the highest raw cryptocurrency transaction historically.
The United States likely surged past China’s $1.1bn due to massive inflows towards the end of 2020 that generated remarkable gains.
Japanese crypto investors ranked third on this list with $0.9bn in Bitcoin earnings last year. The United Kingdom, Russia, and France followed with $0.8bn and $0.6bn, respectively.
Statistics also showed that US Bitcoin earnings were 46% bigger than those of China, the United Kingdom, and Japan combined.
Bitcoin’s Market Cap Increased by 20% Since January
The CoinMarketCap data showed the world’s biggest digital currency managed to grow its market cap compared to January figures, despite the recent crypto price crash.
Bitcoin’s price rallied over 100% in five months of 2021, helping its market cap hit $1.1trn at the beginning of May. However, by the end of last month, the flagship cryptocurrency fell to more than three-month lows, dropping to about $30,000 at one point.
The unexpected pullback in Bitcoin and other cryptocurrencies came as a flurry of negative headlines and catalysts, from Tesla CEO Elon Musk to a new round of regulations by the Chinese government, causing a massive hit for the entire sector.
Statistics show that Bitcoin’s market stood at around $650bn last week, a 20% increase since the beginning of the year.
Twitter’s Jack Dorsey Speaks on Blockchain, Crypto; Fintech CEO Says Emerging Economies Should Listen
Recently, outlets reported on comments from Twitter CEO Jack Dorsey made at a conference, as well as on an earnings call, where the executive continued to prosecute the case for emerging blockchain-based technologies, including cryptocurrencies. He noted that cryptocurrencies are part of a technology trend which is beginning to mature and mainstream simultaneously, including artificial intelligence and decentralization.
“It is important to note that Jack Dorsey isn’t just a social media kingpin. He also was the founder of Square. He understands the payments stratosphere, and if he’s looking at cryptocurrencies and other blockchain-based payments to remain a considerable player in the way the world transacts its business, it’s definitely worth noting,” said 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.
Dorsey wrapped up the earnings call saying, “With decentralization, we increased the size of the corpus of conversation we have access to and improved conversational help by giving more people, more power to individuals. And with the global currency, we can ensure people and companies can freely trade goods and services anywhere on the planet.”
“Dorsey is making the same argument that I’ve been making for several years. Blockchain is bigger than blockchain. Blockchain itself is a gamechanger. But, adopting the technology is meaningful, even beyond the immediate implications in the payments space. Dorsey is talking about how shareholders will benefit from the company participating in the space and investing ‘aggressively’ in it. But, it isn’t just an opportunity for shareholders and individual companies. There could be implications for entire economies,” noted Gardner.
“To see that, I really think you need to look at just how Estonia has transformed over the past couple decades. Today, it has carved itself a niche as a startup destination. That was done over the course of time, with leadership which took methodical steps to create a culture of innovation. That same model can be replicated today, as new technologies and innovators are looking for jurisdictions which are friendly,” opined 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 NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“You’re going to see some startups flock to tech hubs like Silicon Valley or Tel Aviv. But, a lot of innovators that feed into the blockchain pipeline will look for a home that provides regulatory guidance which is friendly to innovation. By now, we’ve found out that innovation moves much faster than bureaucracy. As countries begin to roll out central bank digital currencies, leadership in that arena could be just what a developing economy needs to stand out from the pack. I think we’ve seen countries like The Bahamas, El Salvador, and Ghana all work to begin to build a culture that is seen as friendly by the fintech community. There’s no reason that countries like Kenya or Morocco, or even others that might find themselves well positioned in Eastern Europe or Southeast Asia, to begin to build a regional presence, as well. Right now, the industry is still evolving. Welcoming blockchain-based technologies is the first step to creating a culture that values technology as a way to create jobs and strengthen an economy,” said Gardner.
Bitcoin and Other Major Cryptocurrencies Braced For a $2.1T Inflow as Germany Institutional Investors Eyes Crypto Investment
Bitcoin and cryptocurrencies have seen a violent return to volatility over the last two weeks with the combined crypto market losing then gaining around $300 billion.
The bitcoin price, currently trading comfortably around the psychological $40,000 per bitcoin level, remains significantly down from its peak of almost $65,000 set in April.
Now, amid reports institutional investors are gearing up to reenter the bitcoin and crypto market, a new law in Germany will allow institutional investors that currently manage a staggering 1.8 trillion euros ($2.1 trillion) to invest in bitcoin and crypto for the first time.
So-called Spezialfonds, only available to institutional investors such as pension companies and insurers, will be able to invest up to 20% of their holdings in bitcoin, ethereum and other cryptocurrencies from Monday.
“Most funds will initially stay well below the 20% mark,” Tim Kreutzmann, an expert on crypto-assets at BVI, Germany’s fund industry body, told Bloomberg, which first reported the news. “On the one hand, institutional investors such as insurers have strict regulatory requirements for their investment strategies. And on the other hand, they must also want to invest in crypto.”
Earlier this week, some $2.5 billion in bitcoin moved off crypto exchanges including Coinbase, Kraken and Binance, according to market data provider Glassnode in what was described by CNBC as “a signal that institutional investors are getting off the sidelines.”
Some 63,000 bitcoin were transferred off major exchanges, Glassnode data reportedly showed.
“Trading activity has been higher in the past few days than what we’ve seen recently,” Jeremy Welch, chief product officer at U.S. bitcoin and crypto exchange Kraken, said in comments sent via Twitter DM and predicted “greater participation from regulated entities … If the narrative holds, this could ultimately prove to be highly price-positive for the crypto space.”
The recent bitcoin price rally was kickstarted by reports that online retail giant Amazon plans to roll out bitcoin and crypto support as soon as this year. The company denied the City AM report but said it’s “exploring what [crypto support] could look like on Amazon.”
“Regardless of whether [Amazon adoption] materializes or not, the point is that adoption from institutions and corporations remains one of the market’s driving narratives,” added Welch.
Bitcoin, Ethereum Hash Rate Slowly Recovers as Chinese Miners Redeploy Overseas
The hashing power securing the world’s two largest blockchains is on track of a slow recovery, as some Chinese miners have gradually completed their relocation after the crackdown.
Based on The Block’s Dashboard, the seven-day moving average of Bitcoin’s hash rate has slowly climbed up to and remained at the 100 exahashes per second (EH/s) level over the past three weeks.
Following China’s crackdown on the bitcoin mining industry, power stations across multiple provinces have been ordered to suspend energy supply to mining facilities. Bitcoin’s hash rate initially plunged to below 90 EH/s, a level not seen since early 2020. With the slow recovery, bitcoin’s mining difficulty is expected to post a 4 percent growth in its next adjustment, after having recorded four consecutive drops since mid-May.
Although China’s initial crackdown comment specifically said it was about bitcoin mining, the shutdown orders that were eventually handed down locally also affected the mining farms that housed graphic cards and ASIC miners securing the Ethereum network. That situation sparked Ethereum miners to dump their used GPUs on the secondhand marketplace.
Similarly, the hash rate on Ethereum also took a hit by over 20 percent after China’s crackdown orders but has steadily recovered to above 500 terahashes per second.
The hash rate rebound suggests that at least some Chinese miners have completed their relocation process and subsequently plugged in.
For instance, Shenzhen-headquartered BIT Mining, previously known as online sports lottery firm 500.com, had over 50,000 bitcoin ASIC miners in Xinjiang and Qinghai as of April this year. It also owned two operational mining facilities in Sichuan.
After the crackdown, the New York Stock Exchange-listed bitcoin miner said it would ship 3,000 units to Kazakhstan by July. In a statement on Wednesday, BIT Mining said it has shipped and deployed 3,819 units of bitcoin mining equipment with a total hash rate of 172 PH/s at facilities in Kazakhstan. It announced earlier this week that it has completely exited its lottery business to focus entirely on mining.
“A further 4,033 bitcoin mining machines with a total hash rate capacity of 121 PH/s have been shipped to data centers in Kazakhstan and are awaiting deployment,” BIT Mining said. In addition, it has signed a purchase agreement to acquire 2,500 new bitcoin miners that are expected to be delivered within seven days and it plans to deploy them in Kazakhstan as well.
Apart from bitcoin mining equipment, BIT Mining has started Ethereum mining operations outside of China with 86.4 gigahashes per second (GH/s) deployed. “An additional hash rate capacity of 4,713.6 GH/s is expected to be deployed by the end of October 2021,” the firm said, which accounts for about 0.7 percent of the total hash rate on Ethereum.
BIT Mining purchased 2,000 Ethereum miners for $30 million in February that are due for shipment throughout this year.
Russia-headquartered colocation provider BitRiver told The Block that after China’s shutdown orders, it signed contracts with Chinese mining clients for a capacity of 150 megawatts, which are expected to go online in batches over the coming four months.
Taking a step back, BitRiver’s founder and CEO Igor Runets said with a worldwide supply crunch for bitcoin mining hosting capacity, it may take much longer for bitcoin’s hash rate to fully recover to the all-time-high 180 EH/s level.
Meanwhile, BIT Digital, another U.S.-listed bitcoin mining firm that previously had operations in China, is in the process of shipping over 14,500 units of bitcoin miners to the U.S.
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