Bitcoin

Miners need a Bitcoin use case to persist

Published

11 months ago

19 May, 2024

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of the crypto.news editorial.

The security of the Bitcoin network is based on the addition of new blocks to the chain, which miners are financially incentivized to produce. In turn, miners’ revenues include transaction fees for all transactions included in a block they mine, as well as a block subsidy.

However, the block grant will not last forever: it is halved every four years (most recently on April 19, 2024) and will tend to zero. The goal is to support miners’ profitability until the fees generated by transaction activity on the Bitcoin network are sufficient to do so.

Miners can mitigate the reduction in revenue per block by increasing their market share of mined blocks. They can do this by upgrading existing equipment or acquiring new equipment, locations, or entities. Miners who have been most profitable to date, as well as those who have accumulated BTC reserves that have increased in value, are in the best position to make such investments.

On the other hand, some operations will no longer be profitable and will be closed, especially those with higher energy costs. Miners will continue to seek partnerships to provide load balancing to energy grids, improving the economics of renewable energy projects by stabilizing energy demand (by increasing mining rigs in times of oversupply and shutting them down in times of excess demand). How miners optimize their energy costs and manage their liquidity to cover fiat-denominated debt and operating costs will differentiate their credit risk.

After SEC-Approved Bitcoin Spot ETFs In the United States earlier this year, the price of Bitcoin rose sharply and transaction volumes increased as new institutional investors sought exposure to the asset. In a recent report, Chainalysis highlights that the Lightning Network (a scaling solution built on top of the Bitcoin blockchain) saw a threefold increase in its open channels throughout 2023, illustrating some growth in the network’s utility.

A recent IMF working paper also highlights Bitcoin’s significant role in cross-border flows. However, according to data from Coin Metrics, between the ETF’s approval in January and the halving in April, transaction fees represented, on average, just 6% of miners’ revenue. Therefore, miners remain highly dependent on the block subsidy.

Bitcoin’s limited scalability and functionality, relative to other blockchains, has contributed to its slow acceleration in transaction rates. Bitcoin was not designed to enable smart contracts; therefore, it does not benefit from trends like decentralized finance, tokenization, and stablecoin payments that are driving activity on other chains like Ethereum and Solana. Bitcoin’s main use cases to date have been peer-to-peer bitcoin payments and trading, and neither has proven to generate sufficient revenue on an ongoing basis.

The design of the Bitcoin blockchain will not change, so new functionality must come from technological developments in its ecosystem. The Runes protocol, which introduces features for fungible tokens, launched on the same date as the halving and immediately led to an increase in transaction fees.

Fees were also increased in 2023 by the launch of Ordinals subscriptions, which introduced non-fungible token features. So far, these innovations have led to increased fees for transaction activities focused on speculative trading of the tokens they allowed to be created. These new features could allow Bitcoin to reach other blockchains, supporting tokenization efforts in financial markets. Additionally, emerging layer 2 chains (which batch process multiple transactions before resolving them as one transaction on the main Bitcoin blockchain) could mitigate Bitcoin’s scalability limitations and overlay functionalities to develop defining or defining use cases. tokenization. Identifying a use case that “sticks” before the next halving is crucial for these nascent use cases to have a lasting impact.

In the long term, Bitcoin proponents hope that it will become a new global reserve asset and that it will one day serve as a credibly neutral medium of exchange within a global network of AI-powered economic agents. Meanwhile, higher and more stable transaction revenues for miners are crucial to sustaining the network, making progress on concrete technological developments critical.

Andrew O’Neill

Andrew O’Neill leads S&P Global research on digital assets and their potential impact on financial markets. He began focusing on risks related to crypto and defi in early 2022, with an emphasis on understanding their potential impact on ratings and financial markets more broadly. He also participated in the development of S&P Global Ratings’ stablecoin stability ratings, launched in November 2023. He joined S&P in 2009 as a covered bond ratings analyst before taking a role in developing rating methodologies, primarily for ratings of structured finance. . Prior to joining S&P Global Ratings, Andrew worked as an analyst in Investment Banking, Acquisition and Leveraged Finance at JP Morgan. Andrew holds a CFA certificate and a Masters in Aerospace Engineering from the University of Bath.

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Bitcoin

What to watch for in the markets

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Photo: Andrew Harnik (Getty Images)

After witnessing one of the largest global IT outages on record, affecting the travel, finance and healthcare sectors worldwideThis week is set to see more political drama, events, and earnings reports from tech giants.

Donald Trump’s ‘Lovefest’ Sets Jamie Dimon Up for Consideration for Treasury Secretary Job

Let’s take a look at what awaits us:

Major companies will release their earnings reports

Major tech companies and others will release their earnings reports this week, paving the way for what the second half of 2024 will look like.

Monday

Verizon will report earnings before the start of operations.

Tuesday

Coca-Cola, Comcast and UPS are all set to report earnings before the market opens.
Tesla will report earnings in the morning, while General Motors will report earnings in the evening.
Alphabet and Visa will report results after the market closes.

Wednesday

AT&T will release its report before the market opens.
Ford and Chipotle will report earnings after the market closes.

Thursday

Earnings reports from AstraZeneca, American Airlines and Southwest Airlines will be released before the market opens.

Trump to speak at Bitcoin conference

Presumptive Republican presidential nominee Donald Trump will speak at the next Bitcoin Conference in Nashville, Tennesseewhich is scheduled for July 25-27. While this is the first time a presidential candidate will attend the conference, it has sparked a debate over whether the crypto-friendly Trump will receive support from the crypto community in the upcoming election.

In addition to Trump, independent presidential candidate Robert F. Kennedy Jr. will also discuss crypto during the conference. Crypto advocates such as ARK Investment’s Cathie Wood, MicroStrategy’s Michael Saylor, and whistleblower Edward Snowden are among some prominent names who will be participating in the conference.

Ether ETFs are on the way

New Ether Spot ETFs are set to begin trading on Tuesday, July 23. Much like the spot Bitcoin ETFs, these ETFs will allow investors to buy the second most popular cryptocurrency like stocks. BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital are all set to offer Ether ETFs. Crypto asset manager Bitwise predict that trading in the Ether ETF will drive the price of Ether higher, potentially surpassing $5,000.

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Bitcoin

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Bitcoin miners and cryptocurrency companies that have been blocked from going public in the U.S. could ultimately be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share could end up being the biggest losers.

That’s the view that’s taking hold among market participants and observers in the wake of the former president’s growing embrace of cryptocurrency as his chances of election grow. survey released Thursday by CBS News showed Trump with the majority — 52 percent — of likely voters in his likely November rematch with President Joe Biden.

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Bitcoin

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Cryptocurrency investor Chris Burniske says Bitcoin (BTC), Ethereum (ETH), Solana (SUN) and the cryptocurrency market in general seem poised for a run.

Former Head of Cryptocurrency at ARK Invest account his 292,200 followers on social media platform X that several catalysts are aligning, suggesting that digital asset markets are on the verge of a bull run.

According to Burniske, a partner at venture capital firm Placeholder, the highly anticipated launch of Ethereum-based exchange-traded funds (ETFs), Republican presidential candidate Donald Trump speaking at an upcoming Bitcoin event, and the current state of the BTC, ETH, and SOL charts all suggest significant optimism for the cryptocurrency markets.

“With ETH ETFs set to go live, Trump speaking at The Bitcoin Conference, and BTC, ETH, and SOL charts looking [they do] (while stocks are weak), it’s hard to imagine a world where we don’t ship next week.”

Reuters recently reported that preliminary approval for ETH ETFs has been granted as the Bitcoin Conference is scheduled to take place from July 25-27.

BTC, ETH, and SOL are trading at $67,333, $3,528, and $174 at the time of writing, respectively.

The venture capitalist too provides an update on his prediction that the total crypto market cap will eventually hit $10 trillion. According to his chart, the path to $10 trillion is currently “23%” complete, as it sits around $2.2 trillion.

Source: Chris BurniskeX

Earlier this month, Burniske he said in an interview with Real Vision CEO Raoul Paul that he has his eye on the Move ecosystem, which was originally built by social media giant Meta and then used to develop layer 1 blockchains Sui (IUE) and Apts (APT).

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Bitcoin

Here’s the next target for BTC before bulls can hold out for $70K

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Here’s the next target for BTC before bulls can hold out for $70K

Bitcoin’s recovery is going well, and the market is seemingly poised to create a new all-time high in the near term.

Technical analysis

Per NegotiationRage

The daily chart

As the daily chart shows, the price of Bitcoin has been rising since it broke above the 200-day moving average.

The market has also reclaimed the $60K and $65K levels and is moving towards the $68K resistance zone, which could be the last hurdle before creating a new all-time high. With the RSI also indicating that the price has clear bullish momentum, it could be just a matter of time.

Source: TradingView

The 4-hour chart

Looking at the 4-hour chart, it is evident that the price has been rising rapidly since breaking the downtrend line to the upside. The market also broke the $65K resistance level with momentum, turning it into a support.

While almost everything points to a new record high in the coming weeks, there is one worrying sign. The RSI is showing a clear bearish divergence between recent price highs, which could indicate a correction or even a reversal in the near term.

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