According to 13F filings with the U.S. Securities and Exchange Commission (SEC), Millennium Management, a highly successful hedge fund, holds nearly billion in spot bitcoin exchange-traded fund (ETF) shares. This week, it was further revealed that Morgan Stanley, a giant multinational investment and financial services firm, also has exposure to spot bitcoin ETFs. Top […]
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Red Alert For Bitcoin: Network Hashrate Takes A 20% Dive
The post-halving world of Bitcoin continues to throw curveballs. After a hashrate surge to celebrate the block reward reduction in April, Bitcoin’s computational power has taken a nosedive, dropping 20% in recent weeks.
This unexpected decline has ignited a debate among analysts, with some sniffing out a fire sale and others urging caution.
Bitcoin: Hashrate Hiccup Or Miner Exodus?
Hashrate, a measure of the combined processing power dedicated to securing the Bitcoin network, typically climbs after a halving event as miners invest in more powerful rigs to compete for the reduced rewards.
However, this time around, the trend defied expectations. Experts like Maartunn, a pseudonymous analyst at CryptoQuant, believe this signals a potential “miner capitulation.”
Less efficient miners are now likely throwing in the towel. The halving, which cut block rewards in half, squeezed profit margins for miners using older equipment. As these miners shut down their operations, the hashrate dips.
Hash Ribbons Flash Warning Sign
Supporting Maartunn’s theory is a technical indicator called Hash Ribbons. This metric tracks the difference between short-term and long-term hashrate averages. When the gap widens, it suggests a decline in mining activity, potentially due to less efficient miners dropping off.
The recent hashrate plunge has triggered a spike in Hash Ribbons, historically a sign of miner capitulation that has often coincided with price lows for Bitcoin.
Bitcoin Miners Selling Off?
Further fueling the capitulation theory is a decrease in Bitcoin’s Miner Reserve. This metric tracks the amount of Bitcoin held in wallets associated with miners. A decline in the reserve suggests miners might be offloading their mined coins, potentially to cover operational costs or to exit the market altogether.
Undervaluation Signal Or Cyclical Dip?
Maartunn interprets these signs as a bullish indicator. Hash Ribbons often point to opportune moments to buy, he argues. Backing his claim is the Market Value to Realized Value (MVRV) ratio, which suggests Bitcoin might be undervalued.
This metric compares the current market price to the average price at which all Bitcoins were acquired. A negative MVRV, like the one Bitcoin currently has, suggests the asset is trading below its historical cost basis, potentially indicating a buying opportunity.
Related Reading: Buckle Up, XRP Fans: Analyst Eyes Price Explosion To .65 In Next 5 Days
Not Everyone On The Capitulation Train
However, not all analysts are convinced. Some argue that the hashrate decline could be temporary, perhaps due to factors like extreme weather events disrupting mining operations in certain regions.
Additionally, the post-halving period is typically one of adjustment for miners, and a short-term hashrate fluctuation might not necessarily signal a mass exodus.
The post-halving Bitcoin landscape is still unfolding. While the hashrate decline and other signs suggest a potential buying opportunity, particularly for long-term investors, the situation remains fluid.
Featured image from Shutterstock, chart from TradingView
US Bitcoin ETFs Achieve 3-Day Inflow Streak, Netting $303M on Wednesday
U.S. spot bitcoin exchange-traded funds (ETFs) performed well on Wednesday, completing a three-day streak of inflows and accumulating 3 million in gains on May 15. Data indicates Blackrock’s IBIT inflows have been minimal, recording zero inflows over the past few trading sessions. In contrast, Grayscale’s Bitcoin Trust (GBTC) saw inflows of approximately million during […]
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Why Did The Bitcoin Price Rise Above $66,000 Today?
Bitcoin recently rose above ,000 for the first time since April. This recent price rally from the flagship crypto is believed to be due to several factors, including the recently released inflation data.
Inflation Data Comes In Lower Than Expectations
The Consumer Price Index (CPI) inflation data was announced on May 15 and came in lower than expected. The CPI rose by 0.3% in April, against forecasts of 0.4%. The CPI data was also lower than those recorded in March and February, when inflation rose by 0.4%.
Therefore, the latest inflation data suggests that inflation in the US might be slowing down. This development has provided some relief for investors, as the Fed is likely to maintain a dovish stance and consider rate cuts as inflation looks to decline. Lower interest rates mean investors will be more confident investing in risk assets like Bitcoin.
Another factor contributing to Bitcoin’s rally is recent reports showing that some notable institutions are heavily invested in the flagship crypto. Bitcoinist reported that the State of Wisconsin has invested almost million in BlackRock’s Spot Bitcoin ETF. Hedge Fund Millenium Management is also reported to hold .94 billion across five different Spot Bitcoin ETF products.
This presents a bullish outlook for Bitcoin as it suggests that institutional investors are interested in the crypto token for the long term. Meanwhile, from a technical analysis perspective, Bitcoin also looked primed for this rally, with crypto analyst Rekt Capital revealing that the flagship crypto was out of the post-halving “Danger Zone.”
Crypto analyst Mikybull Crypto also noted that Bitcoin was displaying a cup and reversal pattern on the weekly chart and added that the “breakout will be explosive and will send it to a cycle top.”
What Next For Bitcoin?
In a Telegram update, crypto trading firm QCP Capital stated that they expect this bullish momentum to take Bitcoin’s price to the previous highs of ,000. They highlighted activity in the derivatives market and growing institutional demand as factors that could contribute to Bitcoin’s rise to this price level.
They also raised the possibility of this being the resumption of the bull market, stating that “the stars seem to be aligning on this breakout with significant sovereign and institutional adoption, abating inflation and upcoming US elections.” The trading firm added, “If this is indeed the start of the bull trend again, then this move could take us past all-time highs.”
Rekt Capital suggested that this might be the beginning of an upward trend for the flagship crypto as he revealed that the daily downtrend for Bitcoin is over. In another X post, the crypto analyst also noted that the Bitcoin bull market is not yet over.
Enegix Global Launches New Bitcoin Mining Brand 21pool After Halving
PRESS RELEASE. Dubai, UAE – Enegix Global, a leading player in the digital mining infrastructure industry based in the UAE, is excited toannounce the launch of its new brand, 21pool. The brand’s flagship product is a bitcoin mining pool that specializes in aggregating the computational power of miners to increase payouts. 21pool utilizes the most […]
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Bitcoin Miners Face Significantly Reduced Earnings in May Despite Bitcoin Price Rise
According to the seven-day simple moving average (SMA) statistics regarding Bitcoin’s hashrate, the network hashrate has stayed below the 600 exahash per second (EH/s) mark for approximately one week. The recent rise in bitcoin’s price has positively influenced the overall hashprice as the value of 1 petahash per second (PH/s) daily has climbed above the […]
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Michael Saylor Foresees U.S. Pension Funds’ Bitcoin Adoption
Michael Saylor, co-founder of Microstrategy and a prominent Bitcoin advocate, recently suggested in a social media post that U.S. pension funds, which collectively manage approximately trillion in assets, will need to incorporate bitcoin into their portfolios. He stated, “There are thousands of pension funds in the United States managing ~ trillion in assets. They […]
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Report: CME Group to Launch Bitcoin Trading Amid Rising Demand From Wall Street
CME Group, the world’s largest futures exchange, is planning to launch bitcoin trading to capitalize on the surging demand among Wall Street money managers for exposure to the cryptocurrency sector, according to a report from the Financial Times. The Chicago-based group has reportedly been in discussions with traders interested in buying and selling the cryptocurrency […]
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Most Important Bitcoin Indicator Nears Bullish Flip: $150,000 Soon?
In a recent analysis, James Coutts, Chief Crypto Analyst at Realvision, signaled a potential bullish turn in Bitcoin’s near future, attributing the forecasted change to shifts in global liquidity measures, specifically the Global Money Supply (M2) index which is widely seen as most important price catalyst. Coutts detailed this anticipation in a thread on X, where he examined the relationship between major economic indicators and Bitcoin’s price cycles.
Global Money Supply And Its Correlation With Bitcoin
Coutts’ analysis begins with the M2 money aggregates, which consist of cash, checking deposits, and easily convertible near money. He tracks these aggregates across the 12 largest economies, all adjusted to USD. This measure, he suggests, is central to understanding liquidity flows within the global fiat, credit-based financial system. According to Coutts, “The money stock often moves in one direction, with significant drops like those seen in 2022 being rare and typically brief.”
Currently, the Global M2 is neutral, but Coutts predicts imminent changes: “There is a sea of red across my macro & liquidity dashboard, but signs are emerging that this is about to change. Global M2 holds the key for the next leg of the cycle due to its high correlation with $BTC bull cycles.”
The rate of change in M2 money supply is more critical than its nominal value. Coutts noted, “The chart confirms what our MSI performance table suggests: Bitcoin usually moves with shifts in M2 momentum.” He explained that despite the global money supply MSI indicator being in an uptrend, the momentum remains sluggish, maintaining a Neutral MSI. For a shift to a bullish MSI signal, an increase in momentum is necessary, requiring a combination of dollar depreciation, credit expansion, and increased government debt issuance.
Coutts pointed out the crucial role of credit conditions, as evidenced by corporate bond spreads (BBB/Baa) compared to the US 10-year Treasury yield, which have historically aligned with significant inflections in Bitcoin’s cycle. “These spreads are currently narrowing, indicating that corporations are managing to issue and roll over debt despite the high interest rates resulting from the record hikes in 2022 and 2023,” he observed.
Using the chameleon trend indicator on the corporate spread index, Coutts suggests a strategy: “Long Bitcoin when the index shows a bearish trend (red) and stay alert for potential trend reversals (turning green).”
The Role Of the Dollar And Future Outlook
A key to this cycle, according to Coutts, is the behavior of the DXY (Dollar Index), which measures the US dollar against a basket of foreign currencies. “The Dollar is range-bound. A break below 101 would be rocket fuel for Bitcoin,” he asserted, emphasizing that market sentiment on liquidity is often reflected in real-time by DXY movements.
Coutts also touched upon the US debt situation, suggesting that without a conservative shift in Congress advocating for fiscal responsibility, more deficit spending is likely on the horizon, which could further influence liquidity conditions favorable to Bitcoin.
Coutts concluded with a note of caution mixed with optimism: “While my framework needs 2/3 MSI indicators to turn Bullish for macro headwinds to turn into tailwinds, Bitcoin price action will probably sniff out this inflection in the macro before most indicators react.”
His analysis suggests that if Bitcoin breaks above its all-time highs, it would be unwise to bet against it, anticipating potential climbs towards 0,000 in this cycle. “The DXY holds the key to the Bitcoin cycle as it prices in mkt expectations on liquidity in real time. And liquidity is coming. Watch the 101/102 level on DXY If that breaks, then we should see ~0k btc this cycle,” he remarked.
At press time, BTC traded at ,090.
Early Bitcoin Proponent Erik Voorhees: Crypto Will Be the Currency of AI
Erik Voorhees, an early bitcoin proponent and entrepreneur, believes that crypto will be the currency of artificial intelligence (AI) agents. At Unchained, Laura Shin’s crypto podcast, Voorhees explained that, as soon as AI agents start interacting economically, they only will be able to manage cryptocurrency. “An AI agent can’t go set up a bank account. […]
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