Bitcoin: Still the King of Currencies (BTC-USD)

Marina Meza
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<strong>Bitcoin: Still the King of Currencies (BTC-USD)</strong>

Against the backdrop of a U.S. Securities and Exchange Commission that has been dropping bombshells across the cryptocurrency industry through lawsuits with Binance (BNB-USD) and Coinbase (COIN), the altcoin market has dealt with a substantial amount of selling pressure in June. Much of that pressure is a reaction to SEC allegations that several significant cryptocurrencies are unregistered securities.

Bitcoin’s Dominance is Growing

In the SEC’s complaints against Binance and Coinbase, the agency added language stating that major altcoins such as Cardano (ADA-USD), Solana (SOL-USD), and Polygon (MATIC-USD) are unregistered securities. Since those designations, the performance of those coins has been abysmal, with some of them declining by as much as 20% in just a 15-minute period in morning trading on June 10th according to a table developed with data by  YCharts.

With the SEC wielding its sword in the altcoin market, Bitcoin’s (USD-BTC) dominance is at a 48% two-year high. A chart shows by CoinMarketCap, Bitcoin’s dominance versus the entire crypto market and includes major stablecoins such as Atar (USDT-USD) and USD Coin (USDC-USD)

On its own, Bitcoin’s resilience against other currencies in the crypto market this year is noteworthy. It has become even more impressive when we look at Bitcoin’s dominance against other proof-of-work coins in the market such as Litecoin (LTC-USD), Bitcoin Cash (BCH-USD), and ZCash (ZEC-USD).

Bitcoin has shown a 95.7% dominance figure, which is also a 2-year proof-of-work and not far off a 96.4% six-year high from February 2017. At that time, the BTC price was closer to $1,000 per coin.

SEC Chairman Gary Gensler has hinted in the past that BTC is the only coin in the crypto market that is not an unregistered security. To be clear, dominance doesn’t mean BTC’s price can’t go down. But there are potential macro catalysts that could push BTC higher even as other currencies move lower given the regulatory environment.

Fed Pivot?

There has been a lot of anticipation for the Fed’s June rate hike decision, both from crypto market participants and the broader financial markets. Following the release of May CPI on June 13th, the probability of “no change” target rate at the June 14th Fed meeting jumped to over 94%:

With the prospect of no hikes, equity markets have been rallying for most of June. As of the article’s filing that month to date, rallies in both the S&P and NASDAQ are approaching 5%. Given Bitcoin’s previous correlation with the stock markets, it might be predictable to see the same price movement in BTC. However, since mid-May, Bitcoin has been more correlated with gold and negatively correlated with stocks:

BTC Correlations

From June 12th, BTC’s 30-day correlation with NASDAQ is minus 69, while the correlation with the metal is 7. Although it should be noted that the last time the correlation with stocks was this negative, there was a dramatic reversal a month later. If history repeats itself, this could be an indication that BTC is poised to recover or that the stock could reverse soon.

We don’t know whether the interruption of rate hikes in June would be the end of this hiking cycle. But if one considers it to be the end of the process and looks to 2019 as a comparison, Bitcoin may have already bottomed or may not be too far away.

Fund Flows

CoinShares publishes a weekly report tracking fund flows in many major digital asset investment products globally. These products include funds from Grayscale, ProShares, and many others. As of the June 12 report, CoinShares notes 8 consecutive weeks of crypto fund outflows for a whole of $417 million.

Looking at flows from a year-to-date standpoint, the largest contributor to outflows globally has been Canada at -$286 million. However, in the report, CoinShares stated that the firm believes the outflows are related to monetary policy and are indicative of investor caution regarding the rising cycle. If that’s true, the digital asset fund outflow

By Marina Meza

In June, Bitcoin Miners Focus on Liquidation

Audy Castañeda
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<strong>In June, Bitcoin Miners Focus on Liquidation</strong>

During the second week of June, Bitcoin miners reversed the hoarding trend and are now selling considerable amounts.

Since May 2023, Bitcoin miners brought a strong trend of coin accumulation. However, the magic was broken during the second week of June, according to data from analytics firm Glassnode.

The coin generators would have been hit by three very determining forces in their decision-making. It is about the high difficulty of the network, which makes the ability of miners to find valid blocks to process uphill. The other factor is the drop in Ordinals trading. Finally, the fall in the value of BTC also plays its part.

Thus, the large coin generators now seem to take a sell position that may prove negative for the price of BTC.

Factors Keeping Bitcoin Miners Knocked Down

During 2023, the price of Bitcoin became a relief for the miners’ profits. After a 2022 of great falls, the industry received a new stimulus. Despite this, the price of the pioneering digital currency still remains well below the entry level of many miner investments.

This means that any slip generates a negative situation in the groups in this area, which seems to be the case. The US Securities and Exchange Commission (SEC) crackdown on exchanges last week pushed back digital asset prices.

The same thing has to do with the Ordinals. The boom in activity on the BRC20 with NFTs and meme coins like Pepe Coin clogged the Bitcoin mainnet, leading to high fees. Trading with Ordinals slowed, however, and commissions fell from the highs they had been since February.

With this, the two factors, the decline in commissions and the fall in the price of Bitcoin hurt the gains. The third factor is the difficulty of the network.

The Increased Difficulty of the Blockchain

Every 2,016 blocks processed, the Bitcoin Blockchain experiences a difficulty adjustment that directly affects miners. The objective of these automatic adjustments is to keep the processing time between one block and another in a range of approximately 10 minutes. When the hashrate (combined computing power of all connected miners) drops, the difficulty goes down. When the hashrate goes up, the difficulty goes up.

With the rise in the price of Bitcoin and the rise of Ordinals in 2023, mining became very profitable. Mining companies took advantage of the profits to expand and prepare their capacity for the halving of 2024. In simple words, new connections are skyrocketing.

All of this pushed the Bitcoin hashrate to all-time highs. As a result, the difficulty was also brought to levels never seen before. According to data from BTC.com, the next adjustment will take place before the end of this Tuesday, and a new rise of more than 3% is expected, which would set a new record at 52.80 T.

Consequently, all three factors combined forced Bitcoin miners to sell their production to pay for operating expenses.

The Stress Level of Mining Companies

Mining companies maintained an accumulation trend since May, which broke in the second week of June. The wallets tracked by the aforementioned on-chain analysis firm, as belonging to Bitcoin miners, seem to show stress.

On the other hand, the cost of producing a BTC is increasingly suffocating, especially in times of rising temperatures. In any case, to produce a Bitcoin, approximate expenses between $21,000 and $35,500 dollars are required. This is a complex strip, considering that the price of the virtual currency is below $26,000.

Glassnode notes that shipments from Bitcoin miners to exchanges accumulated over $70 million last week alone. The firm ensures that it is the third largest amount recorded and the largest since $101 million during the 2021 bull market.

By Audy Castaneda

Chris Burniske Forecasts Crypto Market to Rise ‘100x’ Amid Uncertainty

Audy Castañeda
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<strong>Chris Burniske Forecasts Crypto Market to Rise ‘100x’ Amid Uncertainty</strong>

Burniske emphasizes that widespread social acceptance rarely drives rapid growth, with real value often hidden in underappreciated or questioned aspects.

Chris Burniske, partner at venture capital firm Placeholder, shared his thoughts on the future of cryptocurrencies, indicating that the current skepticism and doubt surrounding the industry are typical elements of market cycles that historically lead to significant returns.

On June 11, Burniske tweeted the following:

“Existential doubt about crypto’s future in 2023 is the prerequisite for the types of multiples that people will gawk at in a few years — the specifics of doubt change each bear, but the doubt always emerges. Something that’s a consensus long by society doesn’t print 10-100x’s.”

The Importance of Perspective and Patience in Blockchain

Burniske urges stakeholders to maintain perspective and patience, recognizing the great risks of Blockchain technology’s role in our future digital infrastructure and property distribution. By not succumbing to overwhelming doubt, the community can better appreciate the transformative potential of Blockchain technology.

High Impact News Ahead

Recent industry-specific events, such as the lawsuits filed by the SEC against Binance and Coinbase, have caused notable ripple effects in the cryptocurrency market.

Binance’s legal battle is not over yet. The US SEC is seeking restraining orders to freeze Binance assets. Although the exchange has asked the court to deny the restraining order, the ongoing standoff could further affect the value of BNB.

However, Burniske warns that broader economic news may soon be in the spotlight, with a focus on the US Consumer Price Index (CPI) and the outcome of the upcoming Federal Open Market Committee (FOMC) meeting in June. Observers are eager to see if headline inflation will ease from its April rate of 5.5%.

Crypto Market Outlook and Future Prospects

The cryptocurrency market currently boasts a staggering valuation of $1.06 trillion, showing a modest rise of 1.11% in the past day. In particular, Bitcoin and Ethereum, two of the largest cryptocurrencies, are experiencing an increase in value.

Against the backdrop of turbulent market conditions and impending economic news, Burniske’s optimistic projection for the future of cryptocurrencies offers hope to many within the industry.

Twitter user @Metropolis also shares Burniske’s optimism, in the following terms:

“Cryptocurrencies have experienced periods of skepticism and bear markets, which can lead to significant market shifts and potential returns. Believe in the potential of crypto, embrace uncertainty, and stay optimistic to reap the benefits in the long run.”

Doubt, skepticism, and fear are clouding the markets today. However, those who have been around the game for a long time know that it is a high-risk, high-reward game. It is paramount for investors, though, to do their own research before making important financial decisions, not necessarily rooted in current trends or fashions.

As Burniske tweeted on May 30:

“Never ceases to amaze me how humans chasing hot balls of money eerily resemble mosquitoes drawn to the light. Don’t be a mosquito.”

 “Everyone wants a scapegoat in a bear, but you are responsible for your life. Don’t be a mosquito, be light.”

By Audy Castaneda

Will the Latest BNB Chain Offering Give BNB Investors Reason to Rejoice?

Audy Castañeda
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<strong>Will the Latest BNB Chain Offering Give BNB Investors Reason to Rejoice?</strong>

Daily active BNB addresses and daily transactions have decreased over the past month. The coin is down over 16%, and several metrics were still bearish.

BNB Chain [BNB] adoption has been on the rise with the latest being the Polyhedra Network. In a recent tweet, Polyhedra announced that it will support the BNB Chain Luban upgrade on zkBridge on LayerZero Labs.

Besides, BNB also revealed, via Twitter, that it had successfully implemented the BEP-126 update:

“We are proud to support @BNBChain Luban upgrade on zkBridge and our zk light client on @LayerZero_Labs. Luban upgrade introduces super-fast finality and enhanced security on BNB Chain. We keep building on BNB Chain with the most secure and efficient interoperability using ZKP.”

All about BNB Chain’s BEP-126

BNB Chain’s BEP-126 introduced the Fast Finality feature that increases the security of the Blockchain. Users can ensure they receive accurate information on the last completed block thanks to the quick completion feature.

BEP-126 May Significantly Benefit BNB Chain

A look at the Artemis data revealed that the use of BNB Chain has been on a downward trend. This was evident by the drop in its daily transactions, which have plummeted in the last 30 days. Not only that, but after the May 17 rally, BNB’s daily active addresses followed suit as well.

However, now that the new feature has increased the security of the Blockchain, a turnaround can be expected. This seemed likely, as security plays an important role in attracting and retaining users on a Blockchain.

BNB Under Selling Pressure

While BNB Chain users received good news, BNB investors were still struggling. According to CoinMarketCap, BNB is down more than 16% in the past seven days. At the moment, it was trading at $233.89, with a market capitalization of more than $36 billion.

Lookonchain’s tweet revealed that a whale that has been dormant for two years sold 10,000 BNB worth $2.3 million at $230. This suggested that the coin was under selling pressure, raising the chances of a continued downtrend:

“1/ A whale that has been dormant for 2 years sold 10,000 $BNB ($2.3 M) at $230 today. This whale was a #SAFEMOON whale before and made 110K $BNB ($47.5M at that time) with only 10 $BNB ($2,400 at that time) on #SAFEMOON.”

It was interesting to note that the whale transaction count spiked around the time of the BNB price crash and on June 12, when it showed something of a recovery.

Will BNB Rebound Soon?

The possibility of a northerly price move seemed unlikely at press time as several metrics looked bearish. For example, BNB’s MVRV ratio dropped substantially.

That, coupled with the high 1-week price volatility, suggested that the coin price could see further declines in the coming days. The Santiment chart suggested that negative sentiment around BNB was dominant in the market, as evidenced by the drop in its weighted sentiment.

By Audy Castaneda

Bitcoin Ordinals Hype Lures Meme Token Traders into a Wallet-Draining Attack

Marina Meza
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<strong>Bitcoin Ordinals Hype Lures Meme Token Traders into a Wallet-Draining Attack</strong>

Bitcoin Ordinals are “sats” or satoshis that have been ordered and inscribed with a piece of information, such as text or an image. This piece of information makes the sat unique and turns it into a de-facto NFT.

Ordinals gave Bitcoin a way for creators to “sign up” NFT-like digital media and later meme tokens on the Bitcoin blockchain, but along with substantial growth has come the same type of scams and exploits that have thrived on other platforms. Last week, the Ordinals space saw what some users describe as the largest such attack to date.

New Token Meme ORNG

On Friday, a new token meme project called ORNG was launched, offering users the ability to mint a fungible BRC-20 token via the Ordinals protocol. It was implemented on what appeared to some users to be a genuine Ordinals launch pad site called Luminex.

But not period Luminex, and apparently the mint were not legitimate either. It was launched through a copycat worldwide website called “Luminux” (note the sly vowel change), and soon Twitter users were complaining that their Bitcoin wallets were depleted after believing they had signed up for a transaction to mint the new meme token.

It’s an acquainted story in the world of Ethereum NFT and token drops, and such “wallet-draining” scams come in various forms. Sometimes, it is a phishing-style attack in which a manipulated net site is created that looks like an authentic net site or official marketplace. Other times, such scams are spread through a hacked Twitter account of a notable creator or brand.

It’s unclear exactly how much was stolen in the attack, but the wallet tied to the scam took about 2.37 bitcoins-or about $63,000 by value primarily on Friday, with fewer transactions recorded over the weekend.

Since Friday’s launch, the Twitter account linked to the scam has rebranded to try to present another potential scam, with the same fake “Luminux” landing page tweaked to promote a new token coin. It is still unclear who was behind the scam mints.

Warnings from Luminex and Bitcoin Xverso

Wallet creator Luminex and Bitcoin Xverso were among the companies that warned users about the scam and tweeted details on how to avoid falling for similar attempts. A Luminex spokesperson said Decipher warned its community “within minutes” of the scam’s launch.

Like similar Ethereum scams that have drained countless millions of dollars in cryptocurrencies from unsuspecting users, it often involves people acting too quickly to take advantage of what they think will be an opportunity to make some money.

That “fear of missing out,” or FOMO, often leads cryptocurrency traders and NFT to overlook potential red flags. In this case, the growing hype around Ordinals projects and BRC-20 tokens, including the recently publicized launch of the OXBT token, may have tripped up over-eager miners.

Scams often travel in waves of popular projects, as seen here,” said the Luminex spokesperson decipher that we always encourage our community to verify URLs and wait for official announcements before joining new projects.

By Marina Meza

Interest in Bitcoin is at its Lowest Point since 2020, According to Google Trends

Marina Meza
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Interest in Bitcoin is at its Lowest Point since 2020, According to Google Trends

Interest in Bitcoin is in long-term decline, according to data compiled by Google Tendencies. That’s despite recent innovation in BRC-20 tokens and price recovery in 2023.

Refereeing by Google search frequency, interest in Bitcoin is at the lowest point in two years. Worldwide search volume for the world’s oldest cryptocurrency has reached its lowest level since 2020.

While there were brief moments of increased interest during the negative events of 2022, such as the ecosystem collapse and bankruptcies, the common trend has been a decline in interest throughout 2023. This decline persists even as cryptocurrency prices show signs of recovery.

A Global Recession

Contrary to common belief, the decline in interest in cryptocurrencies is not limited to the United States. Although the regulatory environment in the U.S. has contributed to the recent decline, this downward trend began before the 2022 bear sector.

According to research from CoinJournal, crypto hubs such as Singapore are also witnessing a long-term downtrend in interest in Bitcoin. However, in line with Glassnode data, the long-term trend in active Bitcoin addresses tells a more complex story.

Bitcoin Interest over Time

Bitcoin active addresses are unique addresses used in Bitcoin transactions. They are usually a good indication of the level of engagement.

From approximately March 2020 to May 2021, the basic trend was a steady increase in active addresses. However, since the summer of 2021, the number of active addresses remained stable or decreased.

Currently, Bitcoin’s dominance is also at its highest since April 2021, as traders flee the plummeting altcoins following the recent SEC action.

In a statement provided to BeInCrypto, Copeland, CoinJournal Director, described an exodus from the sector, and indicated that anyone remotely attuned to the markets will be able to tell you that interest is not as high as it used to be. However, seeing the extent to which Google’s search volume has declined is jarring. Even with prices rising in 2023, many of those who have lost interest in cryptocurrencies are not coming back. Not only this, but volume continues to fall as crypto companies and other industry stakeholders battle a number of headwinds.

Neelakanti, CEO, and co-founder of Ecosapiens, offered some perspective on the trends. During bear markets, such a lack of interest is not unusual, he said that in 2019, we experience a similarly low level of interest, and this is to be expected when price action is trending sideways. There is also the broader regulatory uncertainty surrounding the digital asset space in the U.S. that is likely to be discouraging retail investors at the moment, he added.

In Neelakanti’s view, holding normally acts as a catalyst that drives prices higher. That will bring back interest on a large scale; he predicted that in fact, that’s when your cousin and your grandmother start calling you about this or that coin. And that’s when Google search trends tend to come up. So it’s mainly a question of timing in terms of where we are in the four-year cycle, he added.

By Marina Meza

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