Welcome to the 20th edition of ‘The Digital Asset Digest’, the newsletter that puts you in the know about the biggest events in the crypto market. This week, the crypto space saw its momentum pause momentarily as investors moved back into traditional assets, but we explain why we remain optimistic about the market both in the near and long-term.
There’s a lot to be excited about over the next few months, so we hope that you share in our enthusiasm!
Bitcoin took a small breather this week, closing Monday morning at around the $11,800 mark on reports that Chinese Bitcoin users were transferring the crypto outside of the country and that Bitmex would close off its trading platform from Ontario. Ether and XRP took a harder hit, falling 6.8% and 9.4%, respectively.
Equities were up again, although it seems to have been constrained to the U.S. this week. The S&P 500 was up 1.5%, driven by gains in Information Technology and Telecom, while the NASDAQ posted an impressive 2.3% return over the same period. The S&P/TSX Composite, on the other hand, was somewhat unmoved, as gains in Consumer Discretionary were offset by weakening oil prices.
Commodities continued their dip, with gold futures sitting around the $1,900 level again. WTI and Brent crude fell on reports that Iraq and Nigeria failed to meet production targets, oversupplying global energy markets.
“Bitcoin, despite its growing mainstream popularity, is a favourite tool of cyber criminals, with one ransomware variant, known as Ryuk, thought to have stolen $61 million since it was created in 2018, according to the FBI. Ransomware hackers, who encrypt their victims’ files before demanding bitcoin or other cryptocurrencies to unlock them, began increasingly targeting hospitals and healthcare providers during the coronavirus pandemic, Interpol reported in April, with criminals taking advantage of an influx of remote workers. Now, researchers who say they are concerned by this trend have compiled information that could be damaging to Binance, one of the largest bitcoin exchanges in the world—suggesting the exchange is failing to prevent Ryuk hackers from turning the stolen bitcoin into cash.”
“One of the largest mining facilities in the world – with output to rival a small power station – is set to open for business in the mining-friendly country of Kazakhstan in September. Mining facility operator Enegix told CoinDesk Friday it will be ready to open its 180 megawatt (MW) data center to mining pools at the start of September. Based in Ekibastuz, near the Russian border, the facility can host up to 50,000 mining rigs, according to sales director Dmitriy Ivanov. Assuming full capacity with Bitmain’s AntMiner S19 series or MicroBT’s WhatsMiner M30, that would represent mining power of about 5-6 EH/s – approximately 4% of bitcoin’s current hashrate. Enegix already operates two mining facilities but the Ekibastuz site is its largest – it will employ upwards of 160 people, including engineers, electricians and security personnel.”
Source: The Block
“Bitcoin mining hardware giant Bitmain said Monday that it signed a $17.7 million deal with Riot Blockchain, a publicly-traded company that mines bitcoin, to purchase “8,000 next generation Bitmain Antminer S19 Pros.” According to a press statement published by Bitmain, the agreement entails “a defined delivery schedule of 2,000 S19 Pros per month starting in January 2021 and continuing through April 2021 until the order is complete.” A previous statement from Riot estimated that the new batch of miners would arrive sometime in November.”
Source: Popular Mechanics
“The United States Postal Service (USPS) is in the crosshairs of a mail-in voting clash, with President Donald Trump blocking supplementary funding for the independent mail agency—which has financially suffered throughout the COVID-19 pandemic—and Democrats likening the move to “sabotage.” It all adds up to disaster for the integrity of the 2020 presidential election. The USPS has warned all 50 states and Washington, D.C. that mail-in ballots might not arrive to election offices in a timely manner for counting, and mail-sorting machines are disappearing from facility lines with little to no explanation.”
Cryptocurrency Weekly Performance
Indices & Commodities
“Money is whatever people will use to swap, store and measure value. Since 1846, Hong Kong residents have relied on notes issued by commercial banks. And for almost four decades, they have been safe in the knowledge that 78 units of local currency would always fetch 10 U.S. dollars. That certainty has spawned a globally competitive financial center. But change is on its way. The people of Hong Kong may be asked to try out a new kind of money. Whether they bite could decide the outcome of a great superpower rivalry. A digital renminbi trial will start in Hong Kong, according to China’s Commerce Ministry, which is also planning similar evaluations in Shanghai, Macau, Beijing, Tianjin and the province of Hebei.”
Source: Trading View
Our bullish thesis on Bitcoin is unchanged this week. The last week was a slow week for the coin and although we saw momentum slow down, an ascending channel on Bitcoin has clearly emerged. On Saturday, Bitcoin bounced off the lower end of the channel and the momentum looks like it’s just beginning to ramp up.
We note that RSI is no longer in overbought territory, which we would consider a positive signal for the upcoming few weeks. In late July, fear that the coin moved too much too soon was the prevailing sentiment, but with the current pullback, we believe that there is a long runway ahead. We will be watching to see if Bitcoin breaks down from the bottom end of the channel. Should support hold, we would consider this a confirmatory signal of our near-term optimism.
At GDA Capital, we pride ourselves on remaining well-positioned for changes within the industry. And from where we’re standing, if 2017 was the year of ICOs, 2020 will be remembered as the year of DeFi. As crypto investors look for new opportunities in the DeFi space, regulators once again watch crypto with a skeptical eye. Will DeFi be the next frontier of the crypto space? Or will Satoshi Nakamoto’s original vision of a trustless, decentralized currency remain the trajectory?
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