The Mining Companies that “Hodl” the most Bitcoin are Expanding Relentlessly

Audy Castañeda
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The Mining Companies that “Hodl” the most Bitcoin are Expanding Relentlessly

According to a number of mining metrics, miners are not only holding hard but also dramatically increasing their hash rate.

Bitcoin (BTC) miners are holding more and more coins as they “relentlessly expand” their operations in 2022.

A report from Arcane Research indicates that publicly traded Bitcoin miners are “constantly looking for expansion opportunities,” as they plan to grow their hash rate faster than the entire network by 2022.

Nearly forty-five percent of the global hash rate comes from North American mining companies, according to the latest figures from the Cambridge Bitcoin Electricity Consumption Index. With the anticipated massive increases in target hash rate among publicly traded Bitcoin miners, it is “likely to rise.”

The Experts’ Opinions

Jaran Mellerud, an analyst at Arcane Research, told Cointelegraph that “most publicly traded miners pursue a hodl strategy, doing their best to keep as much of their mined Bitcoins as possible.” He adds that, “this hodl strategy allows them to serve as Bitcoin investment vehicles for investors who want to own Bitcoin indirectly through an investment structure.”

On the other hand, Whit Gibbs, founder and CEO of Compass Mining, explained to Cointelegraph that, “public mining companies definitely have an advantage when it comes to holding Bitcoin because they have access to the capital markets.”

Gibbs added that, “They don’t need to liquidate their Bitcoins to buy more equipment, increase their operating space, etc. They can go to the capital markets and get that money to keep expanding. So they are able to hold large positions in Bitcoin.”

Some of the biggest miners own huge amounts of Bitcoin, adds Gibbs, “it’s crazy how much some of them own.” As published on BitcoinTreasuries, the Bitcoin mining company Marathon owns the third-largest amount of Bitcoin among companies worldwide, just behind Tesla and MicroStrategy.

Since January 2021, miners’ reserves have been steadily increasing, reflecting their “hodl” strategy. Gibbs suggests that publicly traded Bitcoin mining companies are “taking a more bullish approach to Bitcoin.” He further states that, “companies are looking at Bitcoin on their balance sheet as a way to boost their market valuations.”

Mellerud also understands that Bitcoin mining stocks are becoming increasingly popular in traditional financial markets. “The demand for Bitcoin investment vehicles is high, especially in the US, as the Bitcoin ETF market is immature.” The Bitcoin exchange-traded fund (ETF) saga is an Achilles heel for the network, as there has been a rejection of successive Bitcoin ETF applications.

To sum up, as market interest in Bitcoin miners grows, Mellerud summarizes why the mining business model is attractive and effective. He does so by echoing Gibb’s viewpoints, “Miners are some of the biggest Bitcoin bulls out there, using the highly developed equity and debt markets in the United States to raise money to pay for their expansions and operating expenses, allowing them to keep the Bitcoins they mine.”

Bitcoin miner Hut 8, for example, recently posted record revenue, seeing a 100% increase in its BTC holdings. This year may not be the right time for bulls, but it is certainly a good time to publicly mine the orange coin.

By Audy Castaneda

ETH Derivatives Show Professional Traders Worried about Ethereum’s $2.5K Support

Audy Castañeda
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ETH Derivatives Show Professional Traders Worried about Ethereum’s $2.5K Support

The Ether price has been trading sideways for 27 days, but professional traders are not trusting the $2,500 support, based on derivatives.

Ether (ETH) investors are having a tough time in 2022 as ETH accumulates a 25% loss year-to-date as of March 17. Still, the cryptocurrency has bounced around $2,500 several times in recent months, indicating a solid support level.

On March 15, Ethereum developer Tim Beiko announced that the Kiln testnet, formerly Ethereum 2.0, successfully passed the Ethereum “merge”. The process involves taking the Ethereum execution layer from the existing proof-of-work (PoW) layer and merging it with the Beacon chain consensus layer. The ultimate goal is to turn the Blockchain into a proof-of-stake (PoS) network.

The US Federal Open Market Committee (FOMC) raised rates to 0.50% on March 16, the first such move since 2018. The monetary authority warned of persistent “upward pressure on inflation”, precisely the problem that the digital scarcity of cryptocurrencies aims to solve.

Investors fear that further rate hikes by the FOMC could have a negative impact on risk markets. For example, higher borrowing costs reduce economic stimulus, creating a drag on business expansion and consumer spending.

Regardless of its potential, Ether’s 80% historical volatility shifts the perception of most investors towards a risky asset that will inevitably succumb to an eventual broader market correction.

Ether Futures Show Modest Improvement in Sentiment

To understand how professional traders position themselves, one should look at data from the Ether futures and options market. First, the basis indicator measures the difference between longer-dated futures contracts and current cash market levels.

The Ethereum futures annualized premium should range from 5% to 12% to compensate traders for “locking in” money for two to three months until contract expiration. Levels below 5% are extremely bearish, while numbers above 12% indicate a bullish trend.

Based on analyzed data, the basic indicator of Ether recovered from 2% on March 13 to 3.5% today. However, that level falls below the 5% threshold expected in neutral markets, indicating that professional traders are far from comfortable holding long ETH futures.

Therefore, an eventual breakout of the $3,200 resistance will catch those investors off guard, creating strong buying activity to cover short positions.

Options Traders Fear ETH Could Drop Lower

Ether’s daily closing price has hovered between $2,500 and $3,000 for the past 27 days, making it difficult to discern a direction in the market. In that regard, the 25% delta bias is extremely useful as it shows whether arbitrage desks and market makers are overcharging for upside or downside protection.

If those traders fear an Ether price drop, the bias indicator will move above 10%. On the other hand, widespread enthusiasm reflects a negative bias of 10%. This is precisely why the metric is known as the fear and greed metric of professional traders.

According to the data, since March 11, the skew indicator has been above 10%, indicating fear that these options traders are overcharging for downside protection.

Although there was a modest improvement on Ether’s futures premium, the gauge remains bearish. Considering that ETH options markets price in more downside risk, it is safe to conclude that professional traders are not confident that the current $2,500 support will hold.

However, not everything is lost for Ether bulls as the cheap futures premium offers the opportunity to go long at a low cost. As long as the Ethereum network continues to make progress in fixing its scalability issue, it is still possible a revision of the $3,200 resistance, considering global macroeconomic uncertainty and inflation.

By Audy Castaneda

Experience in El Salvador: Criptovision TV Reached the Place where there are Plans to Build Bitcoin City

Audy Castañeda
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Experience in El Salvador: Criptovision TV Reached the Place where there are Plans to Build Bitcoin City

TV station broadcasted the construction site of Bitcoin city in El Salvador.

The producers of the television program Criptovisión, Iñaki Apezteguía and Martín Ferratto, presented a new program in which they arrived at the construction site of the Bitcoin city, or Bitcoin City, in El Salvador (according to an announcement made last year by President Nayib Bukele).

What the Producers of the TV Show Say

Iñaki Apezteguía explained that, “We went to Bitcoin City, where the city announced by Bukele is going to be built. We wanted to see where they would install it. It is in a region close to the border between El Salvador and Guatemala, with a volcano nearby.”

Martín Ferrato, on the other hand, commented that, “We were looking at the area. There, in theory, the city would begin construction. There are expectations that construction could begin this year. The shape will be like a Bitcoin coin. It will be a technological city”.

Iñaki Apezteguía said that the journey from San Salvador to the future location of Bitcoin City was through a road in poor condition, and many towns were crossed. “It was an experience. What we were realizing as we moved away from the capital is that there is more and more ignorance and less education. And a lot of expectation for what Bitcoin city is going to represent for that area”, he indicated.”

It is worth mentioning that, recently, the producers of the Criptovisión television program also made a documentary called “Volcanic Gold”, in which they show Bitcoin mining in El Salvador, with renewable energy.

Nayib Bukele’s Vision of Bitcoin City

Several months ago, the Central American nation began to adopt Bitcoin as legal tender, a historic event in the field of cryptocurrencies. Furthermore, President Nayib Bukele recently announced the construction of the world’s first Bitcoin City.

According to Bukele, Bitcoin City will have the shape of a currency, as well as geothermal energy, restaurants, shopping areas, residential areas, and a central square in the shape of the Bitcoin symbol. It will even have its own airport, thus giving meaning to such an innovative plan that reminds of what at the time Alexander the Great wanted to build with his circular cities. We will find all of this in the coastal area of ​​Conchagua, in the department of La Unión, where it will coincide with the Conchagua volcano, which will provide energy to the city through a geothermal plant.

The news of Bitcoin City took some by surprise and others with a lot of skepticism. For the most optimistic, the construction of said city will offer a world of opportunities for all. Its development would make the country an attractive place for foreign investors, who could invest significant income into an economy that once suffered from financial chaos.

The main disadvantage that this would attract is that Bitcoin City is probably an exclusive territory that will not be accessible to all its citizens. As it is a tax-free territory, only those with sufficient capital will be able to acquire the greatest proportion of opportunities that arise there.

Finally, everything seems to indicate that El Salvador has taken an important step in its development. Conchagua is one of the most neglected areas in terms of infrastructure and now it will have the opportunity to emerge as a prosperous territory, something that aims to spread throughout the Salvadoran territory to bring possibilities for economic growth. It remains to be seen how events will unfold.

By Audy Castaneda

Russians Have Considered Using CBDCs to Avoid Sanctions

Alexander Salazar
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Russians Have Considered Using CBDCs to Avoid Sanctions

Several analysts believe the conflict in Ukraine and the economic sanctions against Russia could promote the development of CBDCs. Those centralized digital currencies aim to counteract the dominance of US dollars, emerging as alternatives for cross-border deals.

The whole world repudiated the invasion of Ukraine ordered by Russian President Vladimir Putin. The United States led economic sanctions against the Eurasian country, like cutting off the flow of money kept abroad. Several analysts believe that fever of excitement about developing central bank digital currencies (CBDCs) could start.

Countries could use those government-owned digital currencies to prevent the effects of international sanctions. For example, if the digital ruble had existed, the rest of the powers would not have frozen much of Russian finances. Banking executive Hiromi Yamaoka thinks states will change their views toward that alternative due to the conflict in Ukraine.

Digital Yuan Could Be a Currency with International Weight

Yamaoka was the head of the payments and settlements department of the Bank of Japan. He sees much potential in China to make the digital yuan a currency with international weight. The goal would be to counteract the dominance of the US dollar, the most widely traded currency worldwide.

The executive highlighted that freezing the foreign reserves of Russia was the most effective and powerful weapon.

Much of the funds of Russia were in foreign banks and became frozen due to the sanctions. The people from other countries fear that the armed conflict will continue to grow.

Hiromi Yamaoka, an expert on international sanctions, stated this demonstrated the effect of politics and national security on global finance. The digital yuan could emerge as an alternative currency for daily cross-border deals.

He said that China could create a currency bloc, and defense and national security would become crucial issues when discussing the CBDC.

Yuan Digital Positions Itself above Other CBDCs Worldwide

When creating its digital yuan, China did not hide its intentions to take power from the US dollar. Even though they have not yet fully applied its use, many operations within their territory use the CBDC, not the local fiat currency.

China launched its CBDC during the Beijing 2022 Winter Olympics, and over 260 million people have already used it. That number, which will gradually grow, represents 18% of the population.

The International Monetary Fund (IMF) endorsed the cryptocurrency created by the Xi Jinping government. They alleged that the digital yuan had the potential to facilitate cross-border payments. That would be particularly true if China reached an understanding with foreign jurisdictions.

Russia had already undertaken the creation of its digital ruble, but its development is not as complete as the Chinese CBDC. Something similar has happened in the United States, which entertained the idea, but it has not materialized yet.

Digital money will be the future, but its advantages only encourage producing central bank digital currencies. Unfortunately for Russia, they realized it too late and now suffer the consequences.

Cryptocurrencies have become increasingly relevant in the economy, and many governments are aware of that. However, the creation of CBDCs will not allow citizens to use their money without the control of the state.

By Alexander Salazar

Although the TLC Price Action Is Bearish, It Tries Not to Lose Too Much

Alexander Salazar
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Although the TLC Price Action Is Bearish, It Tries Not to Lose Too Much

The price action of Litecoin has not yet confirmed the control of the bears over the market in the medium/long term. If the increasingly low lows remain, further selling of up to USD 68 might occur soon.

The lack of determination among those participating in the cryptocurrency market generates pessimistic scenarios. However, many users continue to defend the most significant support levels. The price action of Litecoin (LTC) is an example of that widespread tide of little decision that tilts the odds slightly towards the bears.

LTC is trading at around USD 110.58 and has accumulated a 0.1% gain in the last 24 hours. Its daily trading volume is above USD 456.18 million, and its market capitalization is about USD 7.72 billion. It occupies 21st place in the cryptocurrency ranking, according to CoinGecko.

Monthly Technical Analysis Allows Understanding the LTC Price Action

The monthly LTC/USD chart shows an evident bearish trend since mid-2021 due to a correction after a significant bullish rally.

The supply zone left by the all-time reached in 2017 hampered the price of Litecoin. Since then, the price created a descending triangle, a chart figure indicating a possible reversal in the trend.

The price could be making a simple correction before resuming the previous trend. However, the lack of determination among buyers puts that scenario at risk.

During the 2021 rally, the price of LTC crossed the 8-month EMA and 18-month SMA to the upside. However, it now breaks through those indicators to the downside. The value of LTC is more likely to lose the immediate support level around USD 117. If that happened, the ground would be clear for USD 68.

At the moment, medium/long-term holders can trust Litecoin, as its price action has not confirmed the control of the bears over the market. The value has not yet fully broken through the descending triangle, suggesting it may be near the bottom of the drop.

Key Short-Term Levels in the Price of LTC

The weekly chart allows making a more accurate forecast of the LTC price action.

During that time frame, sellers control the short-/medium-term trend despite showing weakness.

Traders defend the price of Litecoin above the 200-period SMA, which could be a good sign.

However, the trend of the price of LTC is undoubtedly bearish. As long as the increasingly low lows remain intact, there will more likely be selling soon. If the value lost the support at USD 110, sales of up to probably USD 68 would occur.

Before thinking of buying, the bulls must first break through the immediate resistance at USD 127. However, if the price recovers the USD 160 level, investors can trust in a possible resumption of the long-term upward trend.

The decrease in prices in the cryptocurrency market has affected altcoins like Litecoin. Besides, events like the war between Russia and Ukraine and the growing inflation worldwide have made them drop.

By Alexander Salazar

While Waiting for the Outcome of the War, the Bitcoin Price Stabilizes at USD 40,000

Alexander Salazar
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While Waiting for the Outcome of the War, the Bitcoin Price Stabilizes at USD 40,000

There has not been such a correlation between the price of BTC and other cryptocurrencies like ETH since 2019. The market has adapted to the war between Russia and Ukraine, and small investors have increased their demand for BTC.

The price of Bitcoin (BTC) has recently managed to stabilize at the USD 40,000 level. It has exceeded that goal for three days and could grow further if the pressure of demand continues. The war between Russia and Ukraine no longer scares cryptocurrency investors, who have made themselves feel in the market again.

The stability of the value of BTC indicates that the conflict is a reality that does not affect its market any longer. The same happens with Ether (ETH) and other cryptocurrencies, whose searches on Google have increased. Meanwhile, people seem to have lost their interest in the words war, Russia, and Ukraine, compared to previous weeks.

There is a tense calm among the investors that increase the demand for Bitcoin and drive its price higher. However, the buyers causing the rise are not the usual billionaires known as the whales.

Curiously, the people who have pushed the price of Bitcoin up are small and new investors. According to analyst Will Clemente, entities with a low statistical history of BTC spending continue to absorb the supply.

The Cryptocurrency Market Is at All-Time Correlation Highs

Digital asset researcher Arcane Research recently reported that the correlations in the cryptocurrency market are approaching all-time highs. That is evident in the similar steady rise that Bitcoin, Ethereum, and other cryptocurrencies have seen in the last few months.

Over the last three months, the cryptocurrency market has been approaching correlation highs seen in the 2018 and 2019 bearish moves. However, they are now moving to the upside, drawing a picture of a general risk-off sentiment in the market.

Renowned analyst Willy Woo warned that the market still shows the first signs of a sea change. He stated that there is now confirmation that demand has returned, and long-term futures markets signal a reversal from selling to buying.

Woo argues that data indicates a context of recovery in demand for the cryptocurrency created by Satoshi Nakamoto. He thinks that the price of Bitcoin will continue making limited downward movements in the coming days.

Similarly, he clarifies that there might be a bullish breakout within the next two weeks if demand and lower volatility continue. In other words, the bearish market will end, and the price of Bitcoin will rise. There will be a confirmation of that with the data presented in the coming days.

BTC is trading at around USD 41,910 and has accumulated a 2.6% gain in the last 24 hours. Its daily trading volume is above USD 29.480 billion, and its market capitalization is about USD 764.80 billion, according to CoinGecko.

Bitcoin is an increasingly relevant cryptocurrency, which has led investors to become interested in its price action. The above analysis allows understanding how events like the conflict between Russia and Ukraine affect its value. Besides, it shows that investors have overcome the fear of the war and have made themselves feel in the market once more.

By Alexander Salazar

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