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Bitcoin halving

Did Bitcoin’s Current Bearish Rally Began During “Positive Q2 2020”?

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The second quarter of 2020 has been extremely tumultuous. Bitcoin  and the rest of the crypto market initially put their right foot on the gas and the market exploded. According to data provided by Binance Research, BTC USD was up by 42% in Q2 2020, making it one of the best quarters in recent coin history.

 

bitcoin 2020

Other altcoins were also able to take advantage of the rally, with the likes of Ethereum, Bitcoin , and Litecoin sustaining significant gains. Correlations between the various crypto assets had also remained high in the charts, but slightly lower compared to Q1. The 90-day rolling correlation between the S&P 500 and the BTC was positive. But its influence decreased dramatically after mid-June.

Despite major positive moves by BTC USD, Binance’s report noted that it was crucial to note that almost all of BTC USD’s gains came in the first 45 days of the quarter. Referring to it as a “Kangaroo market,” the market environment was divided between the period when prices were going up and the period when prices were falling.

Now, although many supporters have liked to believe that current market stagnation and decline is due to recent market inactivity, the above data may suggest that Q2 2020 was not entirely positive.

Did Bitcoin ‘s current bearish picture start after mid-May?

Let us have some of the facts right. BTC USD’s last high occurred at the end of May when Bitcoin reached $10,250. From here on, the asset’s inability to breach $10,000 was rightly questioned, but the reason is that Bitcoin cash was halved on 11 May. Casual viewers hoped for a bullish rally right after the halving, but it has historically been identified that the BTC usually follows a prolonged correction for the first 6 months after the halving.

It is therefore not inaccurate to state that Bitcoin’s 42 percent positive return in Q2 2020 was down to the hype of the pre-halving. After the halving has been completed, Bitcoin cash is now following its historic past, and the underlying bearish trail is something that was triggered in the midst of Bitcoin’s bullish Q2 period.

Ethereum performed better in Q2 than BTC USD

The report further added that amidst Bitcoin’s stronghold, Ethereum consistently out-marched BTC with a quarterly return of approximately 70 percent in the charts. Major factors behind ETH’s rally has been down to the growth of DeFi and the anticipation surrounding Ethereum 2.0.

Now, with the commencement of Q3 2020, it will be interesting to see the development of the crypto market over the next three months; whether the bearish grip is broken towards the end of the year or not.

Cheaper T19 Bitcoin Miner Launched Bitmain to Recoup Lost Market Share

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On June 1, giant mining equipment manufacturers Bitmain announced the launch of the cheaper T19 Bitcoin miner in a bid to reclaim its lost market share. The new Antminer T19 has a hash rate of 84 terahash per second (TH/s) and power efficiency of 37.5 joules per terahash (J/TH).

The new model was designed after the cost-effective Antminer S19 Bitcoin miner, but only cheaper. The S19 which comes with a computing power of 95 TH/s, with a market price tag of $1,785. On the other hand, the cheaper T19 Bitcoin miner costs slightly less at  $1,750. According to the announcement:

“The Antminer T19 is housed with the same generation of custom-built chips found in the Antminer S19 and S19 Pro, ensuring capable and efficient operations for mining cryptocurrencies.” 

Cheaper T19 Bitcoin miner available from June 1

As per the international Bitcoin mining network, F2pool, the cheaper T19 Bitcoin miner will generate up to $3.17 in daily profits. In contrast, the efficient S19 model can generate up to $3.96 based on the expense of $0.05 per kilowatt per hour.

Moreover, the new T19 model went on sale on June 1, with the maximum restriction of two miners each to each purchaser. This limit is put in place to avoid stockpiling and to enable individual buyers to purchase mining equipment as per the company. Additionally, the latest model will be shipped between June 21 and 30 according to Bitmain.

The latest model is more effective than its predecessor the T17 model, which has declined at a staggering rate of  20 – 30 percent together with the Antminer S17. The more common failure rate is basically 5 percent. The new cheaper T19 model comes with an ‘upgraded firmware’ seemingly to enable “faster start-up speeds.”

Bitcoin Halving forced Bitmain’s hand

Furthermore, the new cheaper T19 Bitcoin miner comes after Bitcoin’s May 11 rewards halving, which slashed miners’ rewards by half to 6.25 BTC per block. The halving event has resulted in most miners shutting down shop and look for more cost effective mining equipment 

Additionally, Bitmain has lost its market share to upcoming rival Microbt. As per data by Coinshares, the Beijing-based mining giants gave up at least 10 percent of the market share to Microbt back in 2019.

Cost of Bitcoin Transactions Drops by 50% as The Network Recovers Post-Halving

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Transaction costs for Bitcoin have dropped by 50 percent within five days as the pile-up of transactions the Bitcoin Network has started to reduce. This is a quick reversal for Bitcoin, which saw transaction fees rise by more than 2,000 percent in 2020 alone.

According to data from Bitinfocharts, the average bitcoin transaction cost has plummeted by 53 percent. The average bitcoin transaction fell from $6.64 to $3.06 in five days. See the following chart.

 

Cost of Transacting Bitcoin

Drop in number of transactions brought down the Bitcoin transaction costs

The abrupt drop in bitcoin transaction fee follows a sharp fall in the number of unverified transactions accumulated in the Bitcoin mempool (where unverified transactions are held awaiting network confirmation).The Bitcoin mempool can be measured in raw figures or in megabytes of data.

Cost of Transacting Bitcoin

The number of bitcoin transactions sitting in the Bitcoin mempool have reduced by a massive 71 percent over the last five days, as per Blockchain.com data. Moreover, despite the substantial reduction in the number of clogged transactions, the size of the Bitcoin mempool remains significantly high.

Low BTC transaction rate

Currently, the Bitcoin mempool is clogged with 60MBs  of transactions compared to its previous high of 90MBs on May 20. Given that the Bitcoin Network produces ten blocks every ten minutes, the Bitcoin mempool could dwindle in just over 10 hours.

Cost of Transacting Bitcoin

Overall, the number of Bitcoin transactions has fallen drastically. The data by Blockchain.com assumes a low bitcoin transaction rate. In fact, since May 11, when the block rewards halving even took place, the number of bitcoin transactions have dropped by 37 percent. As per data shared by Bitinfocharts. Although the cost of transacting bitcoin is dropping, it is not a good sign when the number of transactions is decreasing as well.

Bitcoin Trading Volume Dwindling as Investors Become Nervous

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The price of Bitcoin is currently in consolidation within the lower $9,000 price level. This is the region where the cryptocurrency has been trading for the last day, as both the buyers and sellers reach a stalemate, pushing down the Bitcoin trading volume.

This consolidation has triggered a reduction in Bitcoin trading volume, which has been soaring high over a multiple week time frame. Additionally, it seems that the investors have become nervous as it’s getting increasingly unclear where the world’s largest cryptocurrency will go next, up or down?

Bitcoin trading volume declines as the crypto commences consolidation stage

Last week, Bitcoin suffered vast volatility that was triggered by the transfer of 50 BTCs from an account that has been dormant for over a decade. This price volatility happened when Bitcoin’s price was about $9,800, triggering a sharp decline to $8,800 lows. At this point, the buyers upped their game to regain the $9,000 price levels.

Notably, Bitcoin has formed a string of lower highs over the past couple of weeks, as it saw a number of harsh rejections at about $10,000, distracting its momentum. Its current dull price action has already made investors nervous and fearful, resulting in a decline in the Bitcoin trading volume.

Bitcoin traders have become fearful

A recent study carried out by Arcane Research concluded that BTC’s trading volume is diminishing after hitting this year’s high last week. The decline has conflicted with the occurrence of last week’s vast volatility, which seems to symbolize a shift of sentiment in the industry.

https://alternative.me/crypto/fear-and-greed-index/

According to the study’s report, Bitcoin’s stalling price action has got the investors nervous. Per the Fear and Greed Index, market participants have become more fearful as Bitcoin fails to break past $10,000. If Bitcoin carries on with its price struggles in the coming days, investors will get even more worried and fearful.

Bitcoin Rises Post-Halving as Users Withdraw 25000 BTC since 11th May

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When Bitcoin’s value crashed by 15% two days before the halving, the community took a massive price downside after the event.

Nonetheless, 3-day post-block reduction, Bitcoin’s price has now rebounded above $9,500 at press time. The bullish rally appeared evident in the charts, as Bitcoin has hit more than $8800, $9100, and $9500 in the past 24 hours.

Bitcoin continues to imbue bullish behaviour post-halving

According to Glassnode’s GNI index, a metric developed to measure the bitcoin blockchain on-chain metrics indicated a 2 point drop before halving. Now that the sentient began to decline rapidly, it was suggested that the investor’s interest could be declining low after the event. It was also speculated that the holders might also be able to sell their old coins.

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However, the health of the network and the profits in Bitcoin suggested a different story. Previously, glassnode stated that the number of active companies has reached an unprecedented amount since January 2018 and that liquidity has also seen major market improvements as seen in the above map.

In addition, addresses holding 0.01 BTC, 0.1 BTC have indicated a surge over the past week and the new bullish moment is directly converted into monetary gains for the largest digital asset. The study suggested,

“Along with Bitcoin’s strong fundamentals, this suggests a stable, if not bullish, environment for BTC over the coming months.”

Users holding more number of Bitcoin post-halving

On the other hand, the exchange rate has not been too strong since the crash in mid-March, the majority of Bitcoin exchanges have seen a high net exchange rate, but it has had little effect on investors’ interest.

According to reports, some 25, 000 BTCs have been withdrawn from exchanges since the halving of 11 May and there are speculations that traders are starting to trust institutions even less at the moment.

The lack of confidence in exchanges started to escalate as BitMEX’s conundrum caused major losses on the investor’s part during the 13th March crash.

With an increasing number of Bitcoin active daily addresses in the ecosystem (over 1 million), it can be speculated that people hoarded their assets on their own rather than handing them over to a third-party institution in the space.

Mining Pool CEO Claims 30 Percent of all Bitcoin Miners Will Soon Shut Shop

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Bitcoin’s halving has been the talk of the cryptocurrency town for the past couple of months and now that the event has occurred, the community is waiting with bated breath for price changes. Although the halving marks a major event in Bitcoin’s history, it spelled doom for many of the Bitcoin miners across the globe.

Recent reports showed that the halving may result in almost 30 percent of all Bitcoin miners to shut shop. Several factors such as reduced rewards, increasing electricity prices, and geographical difficulties have all contributed to this gloomy fact.

In a recent interview with Bitcoin.com, the VP of mining pool Poolin Alejandro De La Torre claimed that several miners who make up a large chunk of the industry were abandoning the trade. He added that the final difficulty adjustment with the 12.5 BTC block subsidy will occur one week before the halving at 1008 blocks. He continued in a recent statement:

“We expect that the first 1008 blocks after the halving will be mined slowly as huge numbers of unprofitable miners drop off the network. We estimate around 30% of the entire Bitcoin network will be squeezed considering that the first 1008 blocks will have the pre-halving difficulty, but half the reward.”

After the third and last halving, the mining rewards per block were reduced by 50 percent to 6.25 BTC. De La Torre pointed out that mining and mining organizations using old machinery, such as Bitmain’s S9 miner, will be the most affected by the change. The only way that companies could pull out of this rut is if the value of Bitcoin increases significantly.

Experts have recommended miners to switch to faster machines that would enable them from escaping the void. Even De La Torre claimed that mining was a long game about survival and that organizations that fail to innovate will capitulate. In the worst-case scenario of Bitcoin’s price falling, more miners will be squeezed out of the Bitcoin ecosystem.

During press time, Bitcoin was trading for $8920 with a total market cap of $160.98 billion. The price remained stagnant for hours as the 24-hour market volume rose slightly to $56.566 billion. The last major fluctuation occurred before the markets closed on May 11 when BTC’s price fell from$8912 to $8425 in a matter of hours.

Miners in areas with cheaper electricity may still have a shot at surviving after the halving. There are miners who defied all odds during the earlier halvings to remain in the game. The first Bitcoin halving occurred in 2009 when the block reward was reduced from 50 to 25. The current 6.5 BTC will be a hard figure to digest for those miners who have been in the game since Bitcoin’s inception.

 

Post- Bitcoin Halving Could see 30% of Miners Close Shop as Business Turns Unrewarding

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Almost a third of bitcoin mining farms could shut down their mining machines as business turns unprofitable post-bitcoin halving, as businesses turn unprofitable due to the lowering of BTC mining rewards.

The third bitcoin mining event that was completed yesterday slashed the supply of bitcoin, reducing the incentives paid to miners for their efforts by half to 6.25 BTC per block. According to the vice president of Poolin Mining Pool, Alejandro De La Torre, BTC miners who make up 15 percent to 30 percent of the total bitcoin network hash rate are already in the process of shutting down their equipment as profit margins fall.

Miners with outdated rigs to shut down post-bitcoin halving

Indeed, mining companies that use old obsolete mining rigs such as the Bitmain S9 miner, which consumes more energy, will have to be the most affected, according to Poolin’s vice president. In his recent analysis, he wrote:

“We expect that the first 1008 blocks after the halving will be mined slowly as huge numbers of unprofitable miners drop off the network. We estimate around 30% of the entire Bitcoin network will be squeezed considering that the first 1008 blocks will have the pre-halving difficulty, but half the reward.”

Occasional halving events put a lot of pressure on the miners, as the incentive has a 50 per cent effect on the revenues produced by the mining companies. Nevertheless, some experts believe that the dip in income is indemnified through a spike in the price of the flagship digital currency; an accomplishment often associated with the past two halvings. Regardless of the argument, the less effective mining firms will be pushed out of the game easily.

Bitcoin mining is all about durability

According to Poolin VP, this is a long game that relies on durability and survival. He claims that mining companies that are unable to reduce the cost of mining to keep up with the most powerful mining rigs on the market must pay the price.

No matter how miners feel about their revenues, the new bitcoin halving event means their rewards; it will be halved for every block mined. Post-bitcoin halving, bitcoin network complexity, total hashrate, and the price of bitcoin could be big statistics to keep an eye on.

Bitcoin Halving: 3rd Halving Sees BTC Record an all-time High Hash Rate

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On Monday, May 12th, the much-anticipated bitcoin halving event happened, lowering the rate at which fresh BTC coins are created. Monday’s adjustment reduced the rewards given to BTC miners from 12.5 BTC per block mined, to 6.25 BTC. Bitcoin recorded an all-time high hash rate on its third halving day.

According to data by TradeBlocks.com, the historic third-halving event happened at  3:23 p.m. EST on Monday. Following the halving event, BTC is presently trading at $8,720 dominating 67 percent of the entire cryptocurrency market, according to Coinmarketcap.com.

BTC sees record hash rate on Bitcoin halving day

The flagship digital currency recorded an all-time high hash rate on its block halving day. This is the third occasion the block rewards reduction is taking place since Bitcoin was created 11 years ago. The new record hash rate is at about 140 EH/s. Despite being a slight improvement on the previous high recorded back in March, it was not consistent in anticipation of lessening of the hash rate.

The previous all-time high hash rate was recorded early in March at approximately 133-135 EH/s. The popular digital currency, which is currently trading at around $8,700, has surged by about 20% since January. BTC price touched $10,000 last week after recovering from the mid-March market crash which saw its price fall below $4,000. 

The Aftermath of BTC halving

Bitcoin halving events have been the subject of divergent price predictions and discussions due to the positive effect of the previous two halvings on the price of BTC. Some market participants speculate that the latest event won’t have any effect on the price of BTC, while others anticipate a positive outcome due to the reduction in the supply of BTC tokens.

Although its impact on the price of BTC remains to be seen, bitcoin halving has a direct impact on bitcoin miners. Indeed, some market experts anticipate miners to close down the creation of fresh bitcoin tokens as the majority of mining equipment will be out of date.

 As per the vice president of mining firm Poolin,  Alejandro De La Torre, several unsuccessful mining firms had already begun closing down their equipment before the Bitcoin halving event on May 12.

Are Bitcoin Miners Finally Cashing in, as Bitcoin Transactions Fees Spiked by 300%?

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After teasing a potential rise above the $10,000 mark on the 8th and 9th of May, the bullish momentum blew up on Bitcoin’s face and a huge 15.22% dump was witnessed in the charts.

Support for $9400, $9100, and $8800 were all broken during the crash, and Bitcoin is currently valued at $8649. With a halving less than 24 hours ago, the largest digital asset will end its price point below $9,000 before the halving.

Currently, over the past 24 hours, a series of other improvements have also been found in the BTC ecosystem.

bitinfo scaled

According to data from Bitinfocharts, Bitcoin transaction fees have increased from $0.66, up to $3.19 dollars in the chart over the past week. Marking an extremely turbulent period, it was also noted that at the time of the press, transaction fees had dropped to $1.92.

In addition, it was also indicated that the last time Bitcoin obtained such an increase in transaction fees, it was back in July 2019. However, the average transaction fee of $55 back in December 2017 appears to be an all-time high valuation.

One of the reasons behind such a high transaction fee is that users are actually paying more to get their transactions checked at a quicker pace on the network. With halving hour away, it is possible that the increased strain on the network may be caused by a rise in sales pressure on the network.

Is mining sell pressure increasing after the price collapse?

Before Bitcoin broke above $9000 towards the end of April, mining selling pressure was recognized as a legitimate concern for the price of Bitcoin after the halving. As Bitcoin consolidates close to $10,000, a sense of excitement has been breathed into the ecosystem as the majority of users predicted Bitcoin to reach halfway over $9,000-$9,500.

The situation has changed dramatically over the past 48 hours, as Bitcoin has fallen to a price of $8500. Alas, bringing back the necessary threat of mining pressure to sell.

Currently, rising sales pressure from miners will implicitly suggest that miners are considering the profitability of Bitcoin mining. Bitcoin had to maintain a valuation above at least $8000 for miners to stay on the network. However, Matt D’Souza of Blockware Solutions said that 27 percent – 35 percent of Bitcoin miners might go offline if Bitcoin stays under $9,000 for a few weeks post-halving.

If the mining distress situation has some reality to it, Bitcoin’s price could have dropped even lower in the next few weeks after halving.

Crypto-Related Hedge Fund Survey Suggests Massive Financial Polarity

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Crypto-related hedge funds assets under management soared last year as a result of a recent survey. However, there have been some major performance disparities in 2019.

The total amount of AUM cryptocurrency grants jumped to over $21 billion by the end of 2019, from $1 billion by the end of 2018. In addition , the average amount per fund rose from $21.9 million to $44 million, as per the recent survey conducted by PwC and Elwood Asset Management Service Ltd. The price of BTC surged by 95 percent in 2019.

Crypto-related hedge fund performance 2019

According to the study, long-term funds had the highest intermediate performance of 42% on average. In comparison, both long and short discretionaries had an average and median advance of 33%. Multiple strategy funds increased by a total of 15%.

With a 30% jump in quantitative funds, they had an efficiency of 58 percent. The 28 percent gap between the two numbers means that there have been some huge out-performers. According to PwC ‘s global chief and partner, Henri Arslanian:

“The volatility of crypto markets offers many opportunities for quant traders. The performance of crypto quant funds tends to be more linked with market volatility rather than market performance.”

Nevertheless, the study report came with caution: the findings were compiled by the fund managers themselves and were not authorised by the controller of sovereign funds or any other intermediary.

Criticism of digital currencies

Digital currencies have their own critics, including the billionaire Warren Buffet, Nouriel Roubini and many others. Two years ago, in May, Warren Buffet went on to describe BTC as a “rat poison squared.” However, they went on to intrude more institutionally, holding back the launch of fresh products such as futures and options.

According to the survey, 97% of participants traded Bitcoin, 67% Ethereum, 38% Stellar Lumens, 38% LTC, 31% BCH and 25% EOS. As per the report, it is surprising that LTC appears among the top traded altcoins, given its market capitalization, in comparison to the other cryptocurrencies.

“I expect the crypto hedge fund industry to grow significantly over the coming years as investing in a crypto fund may be the easiest and most familiar entry point for many institutional investors looking at entering this space,” PwC’s Arslanian stated.