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JPMorgan claims El Salvador’s Bitcoin adoption may not be feasible

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Bitcoin adoption is usually taken as the standard for the entire cryptocurrency market with the coin charting out territories for its compatriots. El Salvador adding Bitcoin to its legal tender was the boost that a lot of proponents were looking for with institutional approval becoming a top priority. This news was not met with jubilation by everyone as critics broke down the issues of using Bitcoin as a legal tender.

JP Morgan analysts released a report on Sunday that touched on the problems El Salvador may face once they approve BTC payments for daily use. El Salvador President Nayib Bukele’s decision to make Bitcoin a legal tender laid the groundwork for serious discussions surrounding the digital asset industry.

The JPMorgan report read:
“Daily payment activity in El Salvador would represent approximately 4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year. A large portion of Bitcoin is locked up in illiquid entities, with more than 90% not changing hands in more than a year — with a “significant and rising fraction held by wallets with light turnover.”

The decentralized nature of Bitcoin was appealing to everyone but the report added that a few major companies held the lion’s share of the world’s largest crypto. This was seen as a hindrance to its potential as a medium of exchange. “Bitcoin as a payment system” was an age-old debate ongoing since its inception. Other officials in the cryptocurrency field were not as fascinated by Bitcoin as its proponents with Tether co-founder William Quigley calling it “the worst payment system ever invented”.

The JPMorgan report also claimed that a persistent imbalance of Bitcoin to dollar demand would lead to the destruction of the onshore capital liquidity. Sources within JPMorgan cited fiscal risks associated with Bitcoin transactions that may later translate into legal issues. This was a sentiment polar opposite to that held by Bukele and his cabinet ministers. In his words, Bitcoin will help to counter the country’s low banking penetration rate.

Bitcoin profitability expected to surpass 35 percent as users go all in

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The cryptocurrency market has settled into a rhythmic motion of bullish crests and bearish troughs with major coins flipping the script. Bitcoin being the largest cryptocurrency in the market has had its fair share of scrutiny under the financial microscope. Even though BTC’s value was much below its all-time highs, factors such as profitability and number of new users.

Analysts also predict a rise in prices in the coming months if the peripherals continue to climb. The combined positive factors play a big role in boosting investor sentiment in the cryptocurrency ecosystem. The short-term rise could mainly be attributed to the recent miner exodus from China. As it stands, the Bitcoin market is expected to enjoy a profitability factor of 35 percent or more soon. Following this news, Compass CEO Whit Gibbs said:

“We are expecting a period of much higher mining profitability for Compass Mining clients. We expect miners to be approximately 35% more profitable.”

At press time, Bitcoin was trading for $34,239 with a total market cap of $ 641.9 billion. A 3.6 percent daily dip brought the cryptocurrency’s 24-hour trading volume to $24.36 billion. Bitcoin’s price action came after a bear run wiped off more than 27 percent of its total 2021 earnings. Despite this situation, proponents such as Blockcap founder Darin Fernstein were confident in the asset’s future growth. The mining exodus was also seen as an unexpected “gift” to the Bitcoin network.

Kazakhstan became the hub for a majority of cryptocurrency miners after China’s latest policy. Most of them opined that they would settle in a region where the government actually supports them rather than infringing upon their functions. One of the main reasons for this has been a mix of lack of transparent regulations and government lethargy.

Iran confiscates 7,000 Bitcoin miners operating illegally

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Iranian authorities have reportedly confiscated 7,000 Bitcoin [BTC] mining machines that were functioning illegally in the country. According to the state media, this happened to be Iran’s largest seizure of cryptocurrency mining machines to date. The machines were found in a deserted factory west of the capital Tehran.

This comes in the backdrop of Bitcoin’s hash rate taking a massive hit, an event that was spurred by a 90% shut down in China’s cryptocurrency mining space, after years of extravagant mining.

Iran’s Cryptocurrency Mining Environment

Iran considers cryptocurrency mining as an authorized activity provided the miners acquire a license from the country’s Ministry of Industry, Mine, and Trade. The country provides cheap power but the miners are required to sell their Bitcoins to the central bank. Tehran also enables cryptocurrencies mined in the country to be used to compensate for imports of authorized goods. These moves by lawmakers have managed to attract miners of late.

Even with these provisions, the authorities claim that many miners flout the rules and keep operating in the country without obtaining a proper license.

Interestingly, the latest news comes a month after the western Asian country had announced banning all cryptocurrency mining rigs, including the legal ones, until the end of the sixth Iranian calendar month on the 22nd of September amidst widespread power outages across the country.

During this time, President Rouhana had also claimed that 85% of crypto mining in the country was operating illegally and unlicensed. Since then, the authorities have been on the lookout.

Besides, a recent study by blockchain analytics company, Elliptic revealed that nearly 4.5% of all BTC mining takes place in Iran and the country is using cryptocurrency to dodge sanctions imposed by other countries. In addition to that, Elliptic also disclosed that crypto mining needed the equivalent of around 10 million barrels of crude oil a year, or 4% of total Iranian oil exports in 2020.

BlackRock Held 37 Bitcoin Futures Contracts From CME

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Following the crypto revolution in 2021, many prolific institutions have embraced Bitcoin. In the latest development, the investments giant and the world’s largest asset manager, BlackRock indicated that it could potentially include BTC futures in its funds in the coming days.

This was revealed in a regulatory filing with the United States Securities and Exchange Commission [SEC], as per which BlackRock held 37 futures contracts from the Chicago Mercantile Exchange [CME] that are worth approximately $360,458 earlier this year.

The latest figures regarding BlackRock’s holdings only represent a mere 0.0014% of the firm’s colossal Global Allocation Fund on reporting day of 31st of January. However, it is still not clear if the asset manager still holds any Bitcoin futures contracts. In addition, the original batch of futures contracts held by the company expired this 26th of March, as per the filing.

Dabbling in Bitcoin

This development comes almost two months after the multi-trillion-dollar asset manager had revealed that it has started to “dabble” in Bitcoin. While speaking about Bitcoin on CNBC, BlackRock’s chief investment officer of global fixed income, Rick Rieder had earlier stated that,

“I wouldn’t put a number on the percentage allocation one should have, depends on what the rest of your portfolio looks like. Today the volatility of it is extraordinary, but listen, people are looking for storehouses of value,” Rieder said on “Squawk Box.” “People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building”.

As mentioned above, BlackRock registers an astonishing $9 trillion in assets under management[ AUM], and happens to be the biggest investment management company in the world. Tailing behind it are other investment firms such as JPMorgan Chase, Fidelity, Vanguard, UBS, and BNY Mellon. Hence, the news is crucial for the cryptocurrency which has seen significant adoption this bull season.

In January this year, BlackRock had added Bitcoin futures as a potential investment for two of its funds. This was according to the company’s SEC filings. The two funds, in question, are BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund.

Fresh Drive Above $60K Reignites Bitcoin Mining And Its Environmental Impact Debate

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Bitcoin mining energy consumption debate is on the table yet again.

Bitcoin’s reign above $60K has reinvigorated debates surrounding negative environmental impact. Concerns regarding mining the cryptocurrency being harmful to the environment because it utilizes substantial energy have made rounds as experts continued to weigh in the matter.

The latest one to chime in the matter that has been making rounds was Bixin Group’s Mustafa Yilham. Bixin currently manages nearly 2.5% of the total global Bitcoin network through its mining operation. Yilham opined that a Bitcoin miner tries to use renewable excessive energy because they are environmentally friendly and cheaper.

He elaborated his first statement by explaining the migratory nature of Chinese miners wherein mining operations are mostly based in Sichuan. In winter, on the other hand, Bitcoin mining operations are moved to Xinjiang/Inner Mongolia where reportedly 43.4% of the energy on its electricity grid is renewable. During the rainy season, Sichuan produces “excessive hydro-power”. He Yiham concluded that,

“Bitcoin is probably one of the MOST Environmentally-friendly financial industries. Because we can migrate during seasons and maintain 100% renewable during summer and over 40% renewable during winter. The renewable rate will further increase soon.”

Bitcoin Mining and Gas-flare Recapturing

Bitcoin mining is also helping resolve gas-flare issues. Here’s how:

Gas flaring has been a concerning issue to the oil and gas industry. A combustion of associated gas is flared into the air which is generated during the processing of natural gas. This byproduct can be captured by the Bitcoin who can then use it for energy instead of releasing it into the open door.

This is not the first time that Bitcoin’s strikingly high carbon footprint has been a matter of debate. By its very nature, Bitcoin mining needs a lot of electricity along with sophisticated devices. However, with regards to energy consumption, ARK Investment Management revealed that traditional banking consumed 2.34 billion gigajoules (GJ) per year while gold mining 500 million GJ. Bitcoin, on the other hand, consumes 184 million GJ, less than 10% and 40% of traditional banking and gold mining, respectively.

Further debunking the misperceptions, ARK’s research stated,

“Additionally, Bitcoin mining’s estimated dollar cost per GJ expended is 40 times more efficient than that of traditional banking and 10 times more efficient than that of gold mining.”

Bitcoin [BTC] Bulls Remain Critical Despite The $50K Climb

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Bitcoin’s [BTC] price picked up late this weekend as it finally reclaimed the $50,000-mark. Following this, several technical pattern signals flipped bullish as it nears the $1 trillion market cap.

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Bitcoin amassed weekly gains of 5.48% received a major boost soon after the US Senate passed the $1.9 trillion stimulus bill on the 7th of March.

After a minor increase of 0.42% over the last, Bitcoin was trading at $50,780. At the time of writing, the crypto-asset recorded a market cap of $940 billion with a 24-hour trading volume of $45 billion.

Is Bitcoin ready to probe highs that has not been marked since the second week of Feb?

Bitcoin [BTC] Daily Chart:

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Despite coming close to the Bitcoin [BTC] candles, the moving averages continued to hover well below. Furthermore, the gauge between the 50 DMA [Pink] and the 200 DMA [Purple] continued to remain consistent depicting less signs of volatility.

The Fib retracement highlighted several points of resistance and support areas for the crypto-asset.

Patterns Indicate Receding Bearish Bias

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The Chaikin Money Flow [CMF] remained steady depicting a consistent flow of capital in the BTC market.

The MACD also depicted a potential bullish breakout in the near-term after treading on the negative side for nearly two weeks.

It is important to note that despite the king coin’s sluggish price movement, the pullback has managed to gain significant attention as many institutional and retail investors bought the dip. This was evidenced by the RSI which continued to remain afloat above the 50 median line even after taking plunge below $45K.

It also indicated a sentiment of buying pressure among the investors in the coin market.

As marked by Fib Retracement, the area at around $50,680 at 0.5 Fib remains highly decisive. If the bulls manage to hold this level, upward target for Bitcoin stands at $55,071 at 0.786 Fib, $58,344 at 1 Fib respectively.

Support levels, in case of a market downturn, that can also be targeted were found to be at $48,566 and $43,021 at 0 Fib.

Bitcoin Briefly Becomes More Expensive Than a 1 KG of Gold

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The buzz around the cryptocurrency space has intensified, thanks to Bitcoin’s record-breaking rally to a $1 trillion market capitalization.

Now the world’s flagship crypto is nearing yet another milestone of $60,000 after adding nearly $7K throughout the week. After smashing through the record high of $58,000, Bitcoin became more expensive than one kilogram of gold.

Around this time, last year, Bitcoin was under $5,000. But now it is well over $50,000. And this development is indeed a pivotal moment for Bitcoin especially at a time when debates on whether the cryptoa-asset is investment-worthy have flourished among investors, analysts, and the public.

Several BTC pioneers and advocates have long pinned for the crypto-asset to be a digital store of value. And its gains have been fueled by signs it is gaining acceptance among mainstream investors and companies, from Tesla and Mastercard to BNY Mellon. And its prominence this bull season was due to the entry of these institutional players who also believed the store of value narrative.

Gold’s market cap stands at around $9-10 trillion. If one were to consider that Bitcoin gets to half of gold’s market cap, that still signifies an astounding growth of 4X, or $200,000. Hence, there is a lot of upside to the crypto if the store of value narrative strengthens for it.

Rough Patches For Bitcoin?

The world witnessed Bitcoin fair against traditional assets in 2020 right after suffering one of the biggest crashes in its history. Its proponents argue the cryptocurrency is “digital gold” that can hedge against the risk of inflation sparked by the massive central bank and government stimulus packages designed to counter COVID-19.

The value of US dollar incurred a sharp fall as a result of quantitative easing measures. Around this time, gold and Bitcoin both went up too, which strengthened its cause.

Despite an overall macro bullish trend, there are several hurdles that BTC has to cross. For instance, the asset class, in general, is patchily regulated and happens to be a highly volatile digital asset that is used very little for commerce.

While the latter has been changing slowly, many analysts and investors still remain skeptical.

Canada’s First Bitcoin ETF Collects $421M In First 2 Days

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Times are changing and Bitcoin ETF’s long-term outlook is brightening, at least in North America. The first-ever Bitcoin ETF that was launched earlier this week has reportedly collected an astonishing $421 million in assets in the first two days of its launch.

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This was revealed by Bloomberg’s Analyst Eric Balchunas in his latest tweet about the world’s first Bitcoin ETF by the asset management company, Purpose Investments Inc. It made a debut on the Toronto Stock Exchange on the 18th of Feb.

Soaring Bitcoin ETF

Here’s what Balchunas had to say about the latest figures of the Bitcoin ETF,

“Proportionally speaking it is the equiv of a US ETF taking $8 billion in first two days. If it were to keep up this pace it will be the biggest ETF in Canada in 20 days.”

He also went on to add,

“The premium on this puppy was a mere 0.40% on Friday, or 250x less than $GBTC on Day Two. The beauty of arbitrage. This is about what we thought it would be, 20-60bps depending on day and poss over 100b on crazy days. In short, working as designed”

The figures show the popularity of Bitcoin ETFs in the country as its underlying crypto-asset continued to conquer new highs every week as it sits above the $1 trillion market cap.

The immense popularity can be attributed to the fact that these vehicles offer investors looking for a low risk way of reaping the profits Bitcoin’s bull run.

For the uninitiated, two Bitcoin exchange-traded funds were launched back to back on the Toronto Stock Exchange this week. Leading the charge was Purpose’s ETF, under the ticker “BTCC” launched this Thursday.

The fund witnessed a monumental interest, as it was found to be trading more than $100 million shares on its first day alone. If this continues, the ETF could potentially reach $1 billion in assets by the end of next week.

Just a day later, Evolve Funds Group Inc which happens to be yet another Canadian platform with $1.7 billion in assets under management [AUM], announced the launch of the Bitcoin ETF – EBIT. This Bitcoin ETF, on the other hand, was trading at $1.271 million AUM.

The latest news definitely raises stakes for the US policymakers especially the SEC which is yet put a stamp of approval to a Bitcoin exchange-traded fund.

The Motley Fool Is Not A Bitcoin Sceptic Anymore

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The financial and investment advisory giant The Motley Fool revealed that it is all set to add $5 million of Bitcoin to its own balance sheet as part of its real-money 10X portfolio.

According to the announcement on the 18th of Feb, it also plans to hold the cryptocurrency purchase for several years.

In a series of tweets, the firm asserted that it believes Bitcoin would store value more effectively than gold over the long term. It opined that Bitcoin might become a medium of transactions when its “price stabilizes in a decade”.

Motley also said that it could be a productive hedge against inflation.

The Motley Fool’s tweet read,

“Since we’re focused on the long-term opportunity, we don’t worry much about the volatility in the short term. We plan to hold this Bitcoin investment for many years and we’ll wait for all of our members in our new 10X service to be able to buy before we do.”

The firm had previously confirmed that it won’t be buying “overpriced ETFs” but will be “buying Bitcoin directly”. Not just that, it also asked its readers to buy the cryptocurrency.

The Motley Fool Was Not always a Big Fan of Bitcoin

It has been critical of Bitcoin and the cryptocurrency industry by extension.

The latest news comes as institutions continued to pour capital into space. Firms such as Tesla and MicroStrategy have also upped their game by making multi-million dollar Bitcoin investments in the recent weeks.

And the move by The Motley Fool is crucial because the firm happens to be one of the most popular financial advice companies that have been in operation since 1993.

It can safely said that Bitcoin continues to win over more corporate endorsements.

These are signs of a widening embrace across the financial services industry that has managed to send the flagship cryptocurrency to new heights even as it still remains lightly regulated and controversial among policymakers.

Yet Another Bitcoin Theory Gains Prominence

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Bitcoin has been shrouded in mystery and has become a target of a number of theories since its inception. Its rise to prominence yet again has triggered massive room for wondering.

For years, the community has been intrigued with the presumed pseudonymous person [s] who developed BTC, authored the white paper, and created and deployed Bitcoin’s original reference implementation. Alas, all efforts have failed and no one the real identity [s] behind the creator.

However, a new crypto theory emerged. A few individuals on the BitcoinTalk forum believe that hundreds of thousands of BTC mined by the infamous Satoshi Nakamoto are giveaways in the world’s greatest prize competition.

According to a series of recent posts published, members on the forum were now hunting for clues left by the creator in hopes to somehow piece together Satoshi’s private keys needed to unlock the alleged huge stash of Bitcoin mined in the early days.

Bitcoin’s epic bull run is winning more attention across the globe who are now keen on solving the treasure hunt. But this theory is originally based on a research paper that was published by crypto expert and RSK Labs chief scientist Sergio Demian Lerner about the BTC holdings in question.

The scientist allegedly uncovered a statistical imbalance in the blocks mined by Satoshi. One of the four reasons for the imbalance, according to Lerner, was:

Satoshi left a message fingerprinted in the nonces. A Message for us to see in the distant future.

Taking the theory further the members of the BitcoinTalk forum and are of the opinion that the alleged encrypted treasure hidden is the greatest prize competition.

One user also posted a roadmap on the same which includes discovering how Satoshi implemented the private keys of the early mined coins into the blockchain.

Secondly, solving the private keys.

Thirdly, transferring the BTC from P2PK to the P2PKH address with the same Privatekey to let Satoshi and the community know that somebody has solved the keys in question.

Lastly, transfering these coins to another address a week later.

The user also went on to add,

“We think that Satoshi is waiting.”

As wild as it sounds, if the claims are to be believed, it could lead to unlocking of wallets containing an estimated amount of 750,000 mined BTC which is worth over $35 billion at press time price.