bitcoin fundamentals

Welcome back to the tenth edition of ‘The Digital Asset Digest’. In the last edition, we reported on a welcomed recovery in the crypto market. This week, we saw some resistance in the market once bitcoin attempted to cross the notorious $10,000 marker. 

On top of the crypto volatility, equities continued to bounce out of the corona bubble, a welcome sign as the rest of society slowly and carefully starts to re-open. 

For more market updates and technical analysis, keep reading.

We hope you enjoy this week’s edition of ‘The Digital Asset Digest’!

resistance in the market

Digital Assets Bitcoin closed at $9,692 Monday morning, more or less unmoved from last week on light news flow. The cryptocurrency saw a surge on Monday at around 7 pm ET, crossing the $10,000 mark for the first time since mid-February, although gains were short-lived as Bitcoin faced a massive sell-off the next morning. Ether beat Bitcoin, up 1.8% for the week, while XRP closed down 1.4%.

Indices – Global equity markets had a phenomenal week last week, with the S&P 500 up 5.9% and the S&P/TSX Composite up 4.8% for the week by Monday close. Energy stocks were in the spotlight, as the rally in oil futures boosted O&G names across the board. Airlines were also in focus as improved traveller throughput data from the TSA and American Airlines announcement that it would return to 55% of its domestic schedule drove returns.

CommoditiesWTI July futures rose 11.6% for the week as increased optimism surrounding the economy’s trek to normal propped returns. Brent August futures rose slightly behind, at 10.4%. The big story in the space was OPEC’s Saturday virtual meeting, where allied nations agreed to extend the production cut until July. China also announced that oil demand in the nation had risen to 90% of pre-COVID levels, improving sentiment for energy traders.

bitcoin news

Chinese buyers are kickstarting a generational housing market rally, and Bitcoin may be next

Source: Forbes

“As the tension between the U.S. and China eases and the hefty fee is reduced, the U.S. housing market is likely to see increasing demand from foreign buyers like other international markets. A surge in appetite for American properties from investors in China would also mean that the Asian economy is strengthening. Such a trend is likely to fuel a rally for gold and Bitcoin, which are increasingly being perceived as stable stores of value and a hedge against inflation.”

Bitcoin mining difficulty drops 9% to January levels

Source: CoinDesk

“Bitcoin has just got easier to mine. At block height 633,024, reached on 12:30 UTC Thursday, the Bitcoin blockchain adjusted its mining difficulty to 13.7 Trillion with a 9.29% drop and reached the lowest level since January this year. According to data compiled by CoinDesk Research, today saw the eighth largest negative difficulty adjustment in Bitcoin’s history and the eighth instance of two or more consecutive negative adjustments. The Thursday adjustment also follows a 6% drop recorded on May 20, which was the network’s first difficulty change after Bitcoin’s quadrennial halving event.”

‘Bullish’ — Struggling miners done selling their Bitcoin, says analyst

Source: CoinTelegraph

“Bitcoin (BTC) miners are setting up a bullish trend despite large sell-offs around the halving, a new data metric suggests. According to Glassnode’s Miner Outflow Multiple (MOM), outflows from mining pools compared to their one-year moving average are nearing all-time lows. MOM calculates coins leaving mining pools and compares them to the yearly moving average as a ratio. As of June 3, that ratio was 0.534 — less than half its value one day before the halving on May 10. By comparison, December 2018 saw mass upheaval due to BTC/USD hitting $3,100. This produced a ratio of around 0.28.”

Why the actual cost of mining Bitcoin can leave it vulnerable to a deep correction

Source: Forbes

“In early 2020, researchers predicted the cost to mine Bitcoin will be at around $12,000 to $15,000 after the block reward halving in May. But, it is now much cheaper to mine BTC than the initial estimates. The low breakeven price to mine Bitcoin may leave it vulnerable to a correction. Bitcoin has become more affordable to mine in recent weeks due to two main factors: difficulty adjustments and cheaper electricity in Sichuan, China due to the rainy season. A low breakeven price of Bitcoin can raise the probability of a price pullback because miners have more incentive to sell BTC, which may increase selling pressure in the short-term.”

token highlights

PIVX is a Proof of Stake coin launched in January 2016 as a code fork from DASH. PIVX describes itself as the “fastest and lowest cost privacy-focused digital currency” and aims to be one of the world’s leading digital currencies in both adoption and technological advancement. The organization argues that PoW protocols are fundamentally defective given their scalability issues and defends PoS as the way forward for cryptocurrencies. Two features power PIVX: 1) The Zerocoin protocol and 2) SwiftX technology. The Zerocoin protocol guarantees total anonymity to its users through a built-in coin mixing service using zero knowledge proofs. This allows users to remain private while transacting with the coin, unlike larger projects like Bitcoin. SwiftX drives PIVX’s transaction speed, as each transaction is guaranteed by the network of masternodes. Instead of waiting for multiple confirmations to verify the validity of a transaction, SwiftX allows PIVX to verify transactions securely in seconds, contrasting heavily with other projects in the space.

PIVX is primarily community driven, although the project was founded by James Burden back in 2015. Burden began focusing his attention on a new project called VEIL in 2018 and officially stepped down from his position at PIVX in 2019. Today, PIVX trades for $0.42 at a market cap of $23.6 million.

Market Movers

Top Gainers

Top Losers

Cryptocurrency Weekly Performance

Indices & Commodities

Weekend Opinion

‘Mining’ Bitcoin takes more energy than mining gold

Source: Nature

“It takes approximately the same amount of energy to mine a dollar’s worth of cryptocurrency as it does to mine a dollar’s worth of certain metals. Cryptocurrencies such as Bitcoin have raised environmental concerns because ‘mining’ virtual coins requires energy-intensive computer calculations. But quantifying the environmental impact of cryptocurrency production is difficult. Independent researchers Max Krause and Thabet Tolaymat calculated that it takes about 17 megajoules of computer power to generate US$1 in Bitcoin, even when the energy used for peripheral activities, such as cooling computers, is not factored in. By comparison, it takes 5 megajoules to mine US$1 in gold and 7 megajoules to mine an equivalent value of platinum.”

Technical Review – Resistance in the Market


We continue to be bullish on Bitcoin this week. During last week’s Digital Asset Digest, we argued that Bitcoin’s momentum was likely to continue and that closing above $10,000 would confirm our thesis. While we were correct directionally (Bitcoin closed up for the week), we were wrong to assume that we would see a breakout once Bitcoin crossed resistance. Two points support our bullish sentiment this week: 1) Bitcoin continues to trend higher and resistance at $10,000 has been clearly established and 2) the 21-day EMA has historically acted as dynamic support/resistance. We believe that if Bitcoin can successfully break out of consolidation, we will see momentum drive returns over the weeks ahead.

It’s troubling to see bitcoin face so much resistance at the $10,000 level. However, crypto and equities markets alike, have rebounded admirably. Rumours that some summer sun has shifted the consumer sentiment is one of the many catalysts behind this rebound. However If this is true, we encourage readers to look at the markets with some skepticism. As fear of a second COVID-19 outbreak would erase any of the improvements made in consumer sentiment. 

Welcome back to the ninth edition of ‘The Digital Asset Digest’. Last week, we saw some strange market behaviour after rumours that some Satoshi-owned BTC was liquidated. This week we saw Bitcoin fundamentals improve and the market claw back to normalcy and enjoy some healthy gains. As always, we will be diving into all key markets to provide a holistic overview of what went on across the blockchain and financial markets last week. 

Market Summary

Digital Assets – Bitcoin closed at $9,548 Monday morning, up 8.3% for the week and ending the month of May approximately 10.4% higher. Newsflow in the crypto space was relatively light over the week, with Goldman Sachs denouncing cryptocurrencies on Wednesday and India’s Supreme Court lifted the central bank’s ban prohibiting banks from dealing with cryptocurrencies. Ether was up a staggering 17.0% while XRP followed Bitcoin, gaining 5.3%.

Indices – The S&P 500 closed up 3.4% for the week on Monday, crossing the 3,000 mark again for the first time since early March. Canadian stocks followed suit, with the S&P/TSX Composite up 2.2%. The narrative last week was highlighted by Financials, as the sector drove S&P 500 returns and all Canadian Big Five banks reported earnings over the week.

Commodities – Oil continued its rally as WTI July futures rose 6.7% and Brent August futures trailed slightly behind at 6.1% last week. Newsflow centered around global relations this week as Russia supported plans to start easing supply cuts in July and U.S.-China trade tensions came to the forefront once again. On the side, Alberta informed OPEC that it had cut oil output by about 1 million bpd.

weekly news

Bitcoin hashrate bounces back- 2x the mining pools, farm diversification, 100 exahash

Source: Bitcoin.com

“Mining bitcoin is a competitive industry. The mining competition grows stronger each and every year. After the Bitcoin (BTC) network’s third halving, a number of miners dropped off the network. During the worst of it, the overall SHA256 hashrate lost around 47 exahash per second (EH/s). Since then the hashrate has increased around 15 to 20 EH/s, depending on which monitoring tool you use. For instance, Blockchain.com’s data shows the hashrate measured on May 27, 2020, is around 92 EH/s. According to the web portal fork.lol, which gives a closer look at today’s current hashrate, data shows the BTC hashrate is above the 100 EH/s zone.”

Amazon patents blockchain-based product authenticator

Source: CoinDesk

“Amazon, a kingmaker of e-commerce and shipping, has patented a distributed ledger-based (DLT) system for proving the authenticity of consumer goods. The U.S. Patent and Trademark Office approved the Seattle tech giant’s nearly three-year-old “Distributed ledger certification” filing on Tuesday. The patent describes using DLT to infuse “digital trust from the first mile of an item’s supply chain” to the last. Amazon’s system compiles data from distributors, manufacturers and shippers on an “open framework” that builds a product provenance across information silos. This data could be neatly packaged for the consumer, as shown in the patent drawings.”

The Big Four are gearing up to become crypto and blockchain auditors

Source: CoinTelegraph

“Unsurprisingly, professional services giants are among those taking a larger role in tackling new market challenges. The Big Four firms and Fortune 500 companies are working with a number of blockchain and crypto companies on ways to combat regulatory uncertainty, interoperability challenges, consensus models and development of the technology. Henri Arslanian, PwC’s global crypto leader, told Cointelegraph that the Big Four firms specifically have a very important role to play in the advancement of the cryptocurrency ecosystem, saying: “Although Bitcoin was designed with a trustless ideology, the reality is that the industry still requires trusted entities to catalyze the development of the ecosystem.””

Why big pharma is betting on blockchain

Source: Harvard Business Review

“Unfortunately, today’s chaos may prove to be a practice run for even more concentrated pressure on our health care supply chains. When we do produce effective treatments or, eventually, a vaccine, millions — and even billions — of people around the world will simultaneously want the same thing, and it will be in limited supply. To fix some of these supply chain vulnerabilities, the industry is turning to blockchain technology. With a blockchain — which can make it cheaper, easier, and faster to verify what is true when a business process spans organizations with competing interests — companies can safely work together in a shared, permanent ledger. They can do this without giving up control of or even revealing their data, as mathematical proof of data can stand in as a trustworthy proxy for actual data.”

StormX is a rebranding of prior AdTech leader BitMaker. The company capitalizes on the freelancer market and aims towards building a more transparent market using blockchain. Currently, centralized players such as Upwork, Fiverr, and Amazon charge high transaction fees, making it inefficient for freelancers who use their services. By using blockchain, StormX has designed a network that gamifies micro-tasks and minimizes fees between participants. StormX users must transact with each other in Storm tokens, an ERC20-compliant token developed by the team. Storm tokens can then be sold, exchanged for other crypto, or recirculated in the Storm market. According to its whitepaper in 2017, the Storm platform had over 250,000 monthly active users across 187+ countries.

StormX is based in Seattle. Its co-founder and CEO Simon Yu is a finance graduate from the University of Washington who previously worked as a financial analyst at KeyBank and Amazon. The company completed their ICO in December 2017, raising almost $31 million. In September 2019, two men were arrested for extorting an unnamed cryptocurrency startup for ~$8.75 million in Ether. Given how closely the firm fit the bill, it is widely agreed across the space that the firm in question was StormX. Storm tokens currently trade for less than $0.01 at a market cap of $19.6 million.

bitcoin fundamentals

Top Gainers

Top Losers

Cryptocurrency Weekly Performance

Indices & Commodities

company announcements

GDA Capital has signed on Uptrennd as its latest institutional client. Uptrennd is a disruptive social media project that is trying to redefine the user-issuer relationship. By giving advertising profits back to the users, Uptrennd is poised to create a social media environment where users are not exploited for their data, engagement times, and overall usage. As data integrity and user exploitation become a more pressing issue in our digital world, we are thrilled to be working with a company that is using technology in the right way. 

Check out the full release here for more details! 

Bitcoin is a big opportunity for investors in the debt-fueled Roaring Twenties

Source: CoinDesk

With the destruction of the fixed income markets, the search for investable alpha has already begun. The banking system has lost an asset class that represented a huge share of its annual fees. Bitcoin, young and maturing quickly, is already being offered to select clients by several global asset managers and international banks. It’s when, not if the asset class that cryptocurrency goes mainstream. Bitcoin hit its high in December, 2017 at $20,000/BTC. With accelerated adoption, the current entry point of roughly $9k/BTC seems like a value proposition.”

Technical Review – Bitcoin Fundamentals Improve

We are bullish on Bitcoin this week. BTC had a spectacular rally this week and we believe that this momentum is likely to continue. Last week, we took a neutral stance and argued that if BTC closed below $8,500, we would change to a more bearish stance. However, support was successfully tested on Thursday, and the cryptocurrency is now consolidating between the $8,500 to $10,000 range. With RSI above 50 and MACD poised for a crossover, our bullish conviction is strong. We believe that we are currently in the middle of a bullish rectangle, so we are waiting for Bitcoin to close above $10,000. If this happens this week, we would consider this a confirmation of our bullish thesis.

After a week where BTC was crushed by speculation and rumours, it rebounded based on bitcoin fundamentals. Difficulty rates are up and the network is functioning similar to pre-halvening levels. With a solid week of momentum at its side, we are bullish and excited about where bitcoin can move this week.