Kategorie: Bitcoin News

• Bitcoin price rose to $27,500 on Coinbase early Tuesday, with the upside coinciding with positive crypto news from Hong Kong.
• This is after the Securities and Futures Commission (SFC) announced that registered exchanges will begin allowing retail investors to trade BTC and ETH from 1 June.
• Analysts say Bitcoin’s immediate price outlook needs a break above $27,600 for bullish continuation.

Bitcoin (BTC) traded to highs of $27,500 on Coinbase as crypto prices bounced earlier on Tuesday.

The upside for the world’s largest cryptocurrency by market cap came amid an extended struggle around the 27k area, and happened as bulls capitalised on positive market reaction to news out of fast-growing crypto hub Hong Kong.

However, as of writing, the price of Bitcoin was hovering near $27,200 as bulls retreated from the resistance level marked by the 20-day moving average on the daily chart.

BTC price rose amid positive news from Hong Kong

On Tuesday, crypto news out of Hong Kong was that retail investors will as from 1 June be able to buy and trade digital assets.

The announcement was made by the Securities and Futures Commission (SFC), which noted that crypto exchanges will soon be allowed to extend crypto trading services to retail investors. 

According to the SFC, this will be effective 1 June, 2023, and tokens that receive the nod would require a 12-month track record. The tokens will also need to have a substantial market capitalization, a category that Bitcoin dominates.

“The news of Hong Kong allowing retail investors to trade in BTC and ETH on registered digital asset platforms delivered a notable BTC price bump in a bleak market – gives you an idea of how significant this news is,” Noelle Acheson, the author of the Crypto Is Macro Now newsletter, said in a tweet.

Acheson believes the next key step of this announcement is that indeed retail investors can trade Bitcoin and Ethereum on registered exchanges.

FINALLY the crypto market gets some good news, in the form of Hong Kong’s regulatory crypto framework which enters into force on June 1. The big deal is confirmation that retail investors will be able to trade BTC and ETH on licensed platforms.🥡https://t.co/NQboEsx5b5

— Noelle Acheson (@NoelleInMadrid) May 23, 2023

$27,600 is a key level for BTC – analyst

Despite the positive news, Bitcoin’s latest attempt to break to key levels above $28k look to hinge on overall market outlook. In particular, the headwinds currently in place regarding the US debt limit situation is one investors are likely to watch keenly.

On what could be next for Bitcoin price, crypto analyst Rekt Capital says the critical resistance area that bulls must conquer for upside continuation is $27,600.

“BTC may be forming an “exaggerated” Bullish Divergence on the Daily RSI. A potentially positive sign for some upside movement. However, [it is] important to realise that the key resistance to beat is ~$27600,” he noted.

The post Bitcoin bulls tap Hong Kong news to test key resistance appeared first on CoinJournal.

Key Takeaways

• BRC-20 tokens were launched on Bitcoin in March 2023
• Transaction fees spiked to all-time highs in May 2023 as network activity spiked
• Bringing memes and NFTs to Bitcoin has caused controversy
• Some argue the rising fees are vital to the security of the network, while others scoff at the activity for getting away from Bitcoin’s “vision”

We live in an inflationary world. Food prices, rent, energy – everything feels more expensive. That is not limited to the fiat world, however. Bitcoin users have noticed a hike in fees recently. So why is this happening, and what does it mean for Bitcoin? And what does this weird concept of NFTs on Bitcoin have to do with anything?

Bitcoin fees rocket upwards in May

Firstly, let us look at a chart presenting Bitcoin fees over the last three years to show the spike in fees. Clearly, the vertical jump in the first week of May is glaring. 

While Bitcoin fees may rise in future regardless (and we will get to that in a moment), the outlier that is this wild spike in May 2023 is down to something I never thought I would say with regards to Bitcoin: memes.

Specifically, the BRC-20 protocol, which is a token standard inspired by ERC-20 tokens on Ethereum. To explain this, we first need to look at Bitcoin Ordinals, because that is what has made this all possible. And yes, it is all on the Bitcoin blockchain. 

What are Bitcoin Ordinals?

Bitcoin was always viewed as the “pure” blockchain. There was no room for non-fungibility, meaning each Bitcoin is the same as another Bitcoin. No NFT nonsense here, thank you very much. 

This changed in January 2023 when the Ordinal protocol was invented. In simple terms, the Ordinals protocol is a system for marking each satoshi, the smallest denomination of a Bitcoin (every Bitcoin is divided into 10 million satoshis). These marked satoshis can then be tracked and differentiated from other satoshis, meaning they are technically “non-fungible”. And so, against all odds, we (sort of) have Bitcoin NFTs. 

The marks on satoshis have become known as “inscriptions”. These inscriptions were made possible by the Taproot upgrade to the Bitcoin network in November 2021. The protocol is known as Ordinals, named due to the fact the transfer scheme for satoshis relies on the order of transactions. 

While this all sounds a little complex, in comparison to NFTs on other blockchains, it is very primitive and basic. There are no smart contracts here. Sidechains are not necessary. Everything is inscribed directly on the Bitcoin blockchain. 

What are BRC-20 tokens?

Two months after Ordinals arrived in the world, an experimental token standard, named BRC-20 in a nod to ERC-20 tokens on Ethereum, were launched in March 2023. This token standard creates fungible tokens within the Ordinal protocol. You may suspect where this is going. The ability to trade fungible tokens within this protocol of Bitcoin? Yes, memes. 

In the below chart, I have presented the top 10 BRC-20 tokens by market cap. As one will be able to deduce pretty swiftly when looking at the names, a lot of these are memes. 

(sidenote – eagle-eyed readers may also be able to deduce from the supply of some of these tokens that they are memes. Personally, I enjoy the nod to Satoshi Nakamoto with the 21 million supply of so many on the board). 

What has all this got to do with fees?

So, back to fees. The rise of Bitcoin Ordinals has thrown up an interesting dilemma. These inscribed satoshis are now competing for block space with conventional Bitcoin transactions. On the Bitcoin network, more activity leads to more fees, and this is why we have been seeing a spike in fees. As the BRC-20 tokens have taken off, we have seen Bitcoin’s network clog up and fees jump. 

This has caused a debate. Some argue against these higher fees, lamenting the waste of time that NFTs and memes are, getting in the way of what Bitcoin is “meant” to be. On the other side, fees are vital for the security of the Bitcoin network. Additionally, once the final supply of 21 million Bitcoins is hit in 2140, miners will need to survive solely on fees. Indeed, as block rewards step down with each halving, mining fees become an ever larger portion of miners’ income, and hence these fees are a crucial incentive for miners and a driver of the hash power for Bitcoin. 

Personally, my take on this is somewhat between the two extremes. I have every confidence that these memes and NFTs and whatever else trading on the Bitcoin network are inherently valueless. Then again, I don’t care much for NFTs in general. However, I don’t see the rising fees as an issue. 

The key here is that the hash rate is still rising. This contrasts to April 2021, which was another time period when Bitcoin fees spiked violently, the average transaction on the network costing a staggering $70. This was due to a crash in the hash rate, which is very much a concern for Bitcoin’s security and stability as a network. 

This is different. Rising fees due to increased activity is fine. That is true regardless of the transaction: regular, meme, NFT or other. It really doesn’t matter. Besides, the scalability issue with Bitcoin is well known, and fee spikes encourage people to look at solutions such as sidechains, like the popular Lightning network which bundles transactions together off-chain. But there are other Layer-2s besides Lightning, such as Liquid and Rootstock, to name a couple.

The prediction that the Bitcoin blockchain will become a base settlement layer has been around for some time. The existence of what is likely a fad, i.e. these tokens and Ordinals, is relatively harmless and shouldn’t change much in the overall scheme of things. The fee and scalability issue will always be here, regardless of what is driving it. And this is exactly why we have the Lightning network, and why people are continuing to innovate to come up with Layer-2 or other solutions. 

The post Why are Bitcoin transaction fees rising, and what are BRC-20 tokens? appeared first on CoinJournal.

Key Takeaways

• Google search data for Bitcoin is at a two-year low
• Search volume is close to the levels last seen before the crypto boom of 2021
• Despite rising prices in 2023, crypto industry continues to suffer from dwindling volumes 
• This trend is backed up when looking at liquidity and trade volume, which have also fallen drastically since the hysteria of the pandemic

We have covered the dropoff in crypto liquidity previously, while the freefalling prices of the 2022 bear market need no recap. However, despite a rebound prices thus far in 2023, general interest in crypto remains significantly down compared to the pandemic hysteria – and the trend does not appear to be slowing. 

This week, another milestone was hit conveying just how far the sector has fallen when assessing it on a macro scale. Looking at search interest for the term “Bitcoin” worldwide, volume is now at the lowest point since 2020.  

To recap, following three years in the abyss, the cryptocurrency sector surged in the latter half of 2020. This came after it weathered the initial storm in March 2020, when the COVID pandemic struck markets harshly, both within and outside of crypto. 

But it was Q1 of 2021 when the sector truly jumped onto the mainstream stage. Dinner conversation was alive with talk of mysterious Internet money, newspapers were talking about blockchain and everybody wanted in, as the price of one Bitcoin retook its previous highs from the 2017 bull market peak…and just kept going. 

While the above chart shows that search volume dropped off since that lofty Q1, as is natural, the scale of the slide since betrays the struggles of the industry. As prices plummeted throughout 2022, interest in the sector bled off. 

There were three notable exceptions, however, when we saw brief spikes in interest. May 2022, when the Terra ecosystem collapsed, was one. Then there was June 2022, when a slew of bankruptcies struck the space, highlighted by lending firm Celsius. And finally, interest jumped again in November 2022, when FTX imploded. 

Unfortunately, none of these episodes were positive, setting the stage for further decline in interest once the dust settled on the various scandals. And that is what has happened – right into 2023, even as prices have begun to rebound. 

US climate worsening for crypto

Focusing on the US, the financial centre of the world, shows the exact same trend – in fact, a slightly steeper one. With the regulatory clampdown worsening in the country, it is also becoming harder for crypto companies to operate in the space. Should this result in much of crypto activity being pushed overseas as some speculate, this trend may only worsen going forward. 

However, to present this as a US problem would be erroneous. While the regulatory climate in the US is certainly not helping things over the last few months, this downward trend in interest has been ongoing since before the 2022 bear market kicked off. The regulatory issues may impact the US side more going forward, but to date, similar drop-offs in interest are being seen in nations around the world. 

The below shows this using Singapore as an example, one of Asia’s hottest crypto centres, presented against the US and displaying the same trend. 

“Anyone remotely in tune to the crypto markets will be able to tell you that interest is not as high as it was. Nonetheless, to see the extent to which Google search volume has fallen off is jarring. Even with prices rising in 2023, many who have lost interest in crypto are not returning. Not only this, but volume continues to fall, as crypto companies and other industry stakeholders fight a number of headwinds”, said Max Coupland, director of CoinJournal. 

In truth, most of this is not surprising. Bitcoin traded at $68,000 in 2021. Since then, it careened down to $15,500 as a number of scandals hit the space, putting many off the sector and causing institutional and retail money alike to flee. We have done several reports into this capital flight, showing how capital has departed the space at a relentless pace. 

Volumes, liquidity and general interest are all correlated. This is true anecdotally – how often have you heard of people discussing crypto in the last few months, compared to during the pandemic, when stimulus cheques and lockdowns were in full force, and Bitcoin was trading north of $50,000?

There is no denying that crypto has fallen from grace. The big question now is whether it can return to where it was. 

If you use our data, then we would appreciate a link back to https://coinjournal.net. Crediting our work with a link helps us to keep providing you with data analysis research.

The post Interest in Bitcoin down to two-year low – Google appeared first on CoinJournal.

• Michael Saylor reiterates his bullish view on Bitcoin.
• MicroStrategy Inc currently has about 140,000 BTC.
• Bitcoin has lost nearly 10% from its high in April.

Bitcoin has lost nearly 10% in recent weeks but the pullback is only an opportunity to build a position as far as Michael Saylor – Chairman of MicroStrategy Inc is concerned.

Saylor is sceptic on other cryptocurrencies

Interestingly, his bullish view is particular to bitcoin only while he remains “sceptic” on other cryptocurrencies in the midst of regulatory uncertainty. Speaking with CNBC today, Saylor said:

I think bitcoin has found the bottom, the leverage is out of it, we are on a bull run. BTC is the one commodity the SEC won’t regulate. I think the way is clear for bitcoin to rally from here.

Earlier this month, the U.S. Federal Reserve signalled a “pause” which could be a tailwind for BTC moving forward as easing monetary policy is known to see investors make riskier bets.

MicroStrategy Inc currently has about 140,000 bitcoin bought for a total cost of roughly $4.17 billion.

Why else is he keeping bullish on bitcoin?

Saylor is convinced that the recent bank failures and the regulatory uncertainty surrounding cryptocurrencies will work in favour of the bitcoin considering its reputation as the safe haven.

Bitcoin is the most secure network, the most secure asset. You’ll see a consistent flow of capital flowing from the rest of the crypto ecosystem to bitcoin.

Other reasons cited for the bullish view on BTC include the “Lightning Network” – a protocol layered over bitcoin that he’s convinced has the potential to be a disruptive payment network.

Also on Friday, Anthony Pompliano also said that bitcoin was like the world’s biggest insurance company.

The post Michael Saylor is bullish on Bitcoin but sceptic on all other crypto appeared first on CoinJournal.