The Wolf Den #388 - The Tables Have Turned
Bitcoin Hash Rate Quickly Recovers - IntoTheBlock
In this report, we bring to you the latest in on-chain cryptocurrency analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB). ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data.
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Bitcoin Hash Rate Quickly Recovers
The Chinese government’s crackdown on mining had a direct impact on the aggregate computing power contributed by miners to secure Bitcoin’s blockchain. The hash rate decreased by 40% in June, making it one of the sharpest drops in its history. Since miners secure the network, the decline in their contributions to the blockchain makes it less costly to attempt to attack the blockchain.
But since the Chinese government's crackdown on the crypto mining sector happened, the hash rate has quickly recovered, increasing by 108% since the June lows.
Check out IntoTheBlock’s Bitcoin Mining Indicators
As evidenced by the image above, the Bitcoin hash rate has been on a rising trend. On December 6, the Hash Rate - which measures the aggregate computing power provided by miners in a proof of work blockchain - soared to 190.78 TH/s, only surpassed a couple of times in May.
As the hash rate recovered, it is also important to note how the distribution of the hash rate changed since the mining ban happened. Intotheblock’s Hash Rate distribution points out how the contribution of computing resources is split across mining pools.
Mining pools aggregate hash power between various miners to provide them higher odds of obtaining block rewards and more predictable income. While mining pools had for the most part consistently been growing their hash rate, mining pools with a large presence in China have been negatively impacted by the migration.
Check out IntoTheBlock’s Bitcoin Mining Indicators
The impact on Chinese miners is reflected in the sharp decrease in the number of blocks mined per day in the Binance and Huobi pools, both dropping to 0%. At the same time, independent and unrecognized miners, labeled as “unknown” have grown remarkably over the past months from 3 blocks/day in May to over 30. Finally, as displayed on the Hash Rate Distribution indicator, mining pools such as Antpool increased their share in this period.
Bitcoin Thoughts And Analysis
DAILY CHART
Nothing has changed on the Bitcoin chart, so I do not want to waste your time repeating the same ideas over and over again. What I can say is that the price action circled in red is abominable for traders and should be avoided. Wicks up, wicks down, impossible to read and easy to get chopped up.
This market looks ugly for the moment. Above 53K we can make a renewed bullish case, but for now I fear that we will be bored and anxious for quite a while. I hope that I am wrong.
Chart Requests
The market is looking rough, so the chart requests livestream was an adventure. Here it is if you missed it!
Coinbase Holds 12% Of The World's Crypto
Alesia Haas, the CFO of Coinbase, was one of the 6 crypto executives testifying in congress and calling for immediate and favorable action from regulators. During her speech, an astonishing fact was revealed regarding the sheer amount of coins that Coinbase holds. According to Haas, Coinbase currently holds 12% of the world’s crypto - WOW. Here is the actual quote,
“We now securely store 12% of the world’s crypto across more than 150 asset types. We serve more than 73 million customers globally, including 10,000 institutions and 185,000 application developers. Importantly, nearly 50% of our transacting customers are doing something other than buying and selling crypto, which indicates to us that crypto is moving beyond its initial investment phase into the long-expected utility phase.”
Evergrande Officially Defaults
Evergrande has finally defaulted. My opinion is that this inevitable eventuality is already priced into markets and that there's no reason to panic. This will begin a long process of winding down for Evergrande, with debt restructuring and government intervention. We will be suffering through updates for months and years to come.
Money Is Pouring Into Crypto
Venture capitalists have bet big on crypto start-ups in 2021, investing more than $27 billion globally as of late November, more than the previous 10 years combined, according to PitchBook. I have included the chart above, in case you cannot read the article.
I talk about this frequently on my streams - institutions are pouring money into crypto, whether they are buying Bitcoin or not. The "picks and shovels" approach of investing in infrastructure is a safer bet for most of them.
The Wolf Of All Streets Podcast Ft. Mayor Francis Suarez
Mayor Francis Suarez has led the charge for city and state adoption of Bitcoin and crypto. His relentless commitment to technological innovation and welcoming companies and individuals with open arms has quickly made Miami a contender for crypto capital of the world. Be careful if you listen to this episode, because there is a good chance you will feel a strong urge to pack up everything and move to Miami if you don’t already live there.
In this episode, Mayor Francis Suarez and I discuss:
Miami’s Professional Transition
Can Miami Replace New York?
Miami Becomes A Leader In Tech
Why Is Bitcoin A Part Of Miami
What Is MiamiCoin?
Rebuilding A 21st Century Miami
Can Regulators Threaten Miami’s Plans?
Miners Moving To Miami
Running The City Without Taxes
The First Bitcoin President
This episode is sponsored by: ARCULUS, and KAVA
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.