Crypto Chronicle - 07/05/24

Welcome to the 36th edition of the Crypto Chronicle, brought to you by Imperial Wealth.

You can listen to todays episode here.

News

US Legislators Push SEC for Bitcoin Options Trading Approval

US lawmakers are pressing the SEC to allow Bitcoin options trading, aiming to end discrimination against cryptocurrency funds. 

Options grant buyers the right to buy or sell assets like Bitcoin at a fixed price by a set date. Flood and Nickel stress SEC approval’s importance for investor protection. 

The SEC is currently reviewing the impact of Bitcoin options on market stability and surveillance. Meanwhile, the SEC is delaying decisions on applications from major exchanges. 

Nasdaq, Cboe, and NYSE are seeking approval for Bitcoin options trading. The SEC invites stakeholders to provide feedback by May 15th and rebuttals by May 29th.

Read more here: https://imperialwealth.com/news/us-legislators-push-sec-for-bitcoin-options-trading-approval

Grayscale’s GBTC Bitcoin Exchange-Traded Fund Bounces Back with First Positive Inflows Since Launch

Grayscale Investments marks a milestone with its first day of positive net inflows for the Grayscale Bitcoin Trust ETF, following four months of consecutive outflows since its transition to a spot Bitcoin ETF. 

On May 3, GBTC recorded $63 million in inflows, contrasting with $17.5 billion in outflows since the launch of spot Bitcoin ETFs. Franklin Templeton’s Bitcoin ETF saw record inflows, while others also experienced notable increases. 

The high fees of GBTC, at 1.5%, compared to alternatives, contributed to the outflows, along with selling pressure from bankrupt crypto firms. 

Investors express varied opinions, anticipating potential shifts in BTC’s trajectory. Exciting developments lie ahead.

Read more here: https://imperialwealth.com/news/grayscales-gbtc-bitcoin-exchange-traded-fund-bounces-back-with-first-positive-inflows-since-launch

Former Binance CEO Changpeng Zhao Receives Four-Month Prison Sentence

Changpeng Zhao, former CEO of Binance, has been sentenced to four months in prison for violating anti-money laundering regulations. 

Prior to sentencing, Zhao expressed remorse for his actions and emphasized his efforts to improve compliance at Binance during his tenure. 

US prosecutors depicted Zhao as negligent, facilitating illegal transactions worth over 100,000. Despite appeals for leniency, prosecutors sought a 36-month prison term, double the federal maximum. 

Zhao’s supporters highlighted his altruistic endeavors and portrayed him as a committed family man. 

The case underscores the importance of regulatory compliance in the cryptocurrency industry and the consequences of non-compliance.

Read more here: https://imperialwealth.com/news/former-binance-ceo-changpeng-zhao-receives-four-month-prison-sentence

MicroStrategy Set to Introduce Bitcoin-Backed Decentralised ID Solution

MicroStrategy, a major holder of Bitcoin, plans to launch a decentralised identity solution, MicroStrategy Orange, on the Bitcoin network. 

This initiative, presented by executive chairman Michael Saylor, aims to provide trustless and secure identities using only the Bitcoin blockchain. 

The system, comprising Orange Service, SDK, and Applications, enables users to issue and manage decentralized identifiers (DIDs). 

An example app, “Orange For Outlook,” enhances email security. Despite reporting a $53.1 million net loss for Q1, traditional accounting methods overlook the 65% increase in MicroStrategy’s Bitcoin value, valued at $15.2 billion. 

The company aspires to expand its applications across various sectors.

Read more here: https://imperialwealth.com/news/microstrategy-set-to-introduce-bitcoin-backed-decentralised-id-solution

Block, Led by Jack Dorsey, to Allocate 10% of Bitcoin Earnings for Monthly BTC Purchases

Jack Dorsey’s company, Block, will invest 10% of its Bitcoin product gross profit monthly. They’ve held Bitcoin since Q4 2020 and Q1 2021, with 8,038 BTC worth $573 million as of March 31. 

Q1 2024 saw Block’s Bitcoin gross profit soar by nearly 60% to $80.1 million, while Bitcoin revenue surged 26% to $2.73 billion. 

Dorsey highlights Bitcoin’s importance for global financial empowerment but notes only a small fraction of resources are allocated to Bitcoin projects. 

Despite this, Block launched Bitkey Bitcoin wallet and plans a Bitcoin mining system. 

Dorsey believes the internet will adopt a native currency eventually.

Read more here: https://imperialwealth.com/news/block-led-by-jack-dorsey-to-allocate-10-of-bitcoin-earnings-for-monthly-btc-purchases

Bitcoin Hits 1 Billion Transactions

The Bitcoin network achieves a significant milestone, processing its billionth transaction after 15 years. 

Transaction number 1,000,000,000 was recorded in block 842,241 on May 5, 15 years and four months after Bitcoin’s launch. 

Daily average transactions stand at 178,475 over 5,603 days. However, Lightning Network transactions are not included, estimated at 6.6 million in August 2023, suggesting hundreds of millions since 2018. 

Bitcoin’s daily transactions peaked at 926,000 during its fourth halving in April. 

The Runes protocol launch drove demand, yet daily transactions fell to 660,260 on May 4. 

Ethereum has processed over 2 billion transactions since July 2015. 

Bitcoin’s current price exceeds $64,000.

Read more here: https://imperialwealth.com/news/bitcoin-hits-1-billion-transactions

MoonPay broadens cryptocurrency choices through PayPal integration

MoonPay expands its cryptocurrency options by integrating PayPal transactions, enabling US users to buy and sell Bitcoin and over 110 other cryptocurrencies via MoonPay. 

CEO Ivan Soto-Wright highlights the partnership’s significance, emphasizing its superiority over platforms limited to Ether or PayPal USD. The integration aims to improve conversion rates, leveraging PayPal’s broader acceptance compared to traditional banks. 

Established in 2019, MoonPay facilitates fiat-to-crypto transactions through various payment methods. 

Supported by Tiger Global, MoonPay collaborates with industry giants like Mastercard and BinanceUS. 

The PayPal integration initially targets MoonPay’s direct-to-consumer products, with plans for wider adoption among partners and expansion into UK and EU markets.

Read more here: https://imperialwealth.com/news/moonpay-broadens-cryptocurrency-choices-through-paypal-integration

Vodafone Explore Integration of Cryptocurrency Wallets With Sim Cards

Vodafone, a UK-based telecom provider, plans to integrate blockchain into smartphones via SIM cards with cryptocurrency wallets. 

This aligns with Vodafone Idea’s financial strategy, involving significant debt and stakeholding. David Palmer, Vodafone’s Blockchain Lead, anticipates over 20 billion phones by 2030, with 8 billion being smartphones. He predicts 5.6 billion crypto wallets by then. 

Meanwhile, Vodafone pursues partnerships like the 10-year Microsoft alliance for AI services, highlighted by CEO Satya Nadella. 

This trend isn’t new; in 2019, VaultTel aimed to merge mobile tech with blockchain via physical wallets. 

Read more here: https://imperialwealth.com/news/vodafone-explore-integration-of-cryptocurrency-wallets-with-sim-cards…

Cryptocurrency Venture Capital Funding Reaches $1 Billion for Second Consecutive Month

Cryptocurrency venture capital funding surpassed $1 billion for the second consecutive month in April, totalling $1.02 billion across 161 investment rounds, slightly down from March’s $1.09 billion. 

Notable raises included BlackRock’s $47 million investment in Securitize and Monad’s $225 million backed by Paradigm and Coinbase Ventures. 

Blockchain infrastructure startups received the most funding in 2024 at $1.7 billion, while decentralised finance protocols secured $626 million. 

Despite a pullback, the industry saw over $3.67 billion invested across 604 rounds, inching closer to 2023’s $9.3 billion. Pantera Capital and Paradigm aim to raise $1 billion and $850 million respectively.

Read more here: https://imperialwealth.com/news/cryptocurrency-venture-capital-funding-reaches-1-billion-for-second-consecutive-month…

Technical Analysis

So much has happened this week!

To summarise:

• Bitcoin was at $63.2k after putting in a triple bottom
• To round out the month of April, and all its bearish fundamentals (war fears, TGA, TPs, outflows of ETFs, blah blah), we had one last dip into the $57-$59k liquidity zone that sat under range lows
• We dipped as low as $56.3k, spending about 24 hours consolidating in between mainly $57k and $59k, before reclaiming prior range lows and sending it back into our range
• Since, we have reclaimed $61k and bullish price action has ensued, with BTC recently reaching as high as mid $65k’s, before filling a CME gap that was produced via weekend price action, and now we trade just south of $64k

In last weeks chronicle I stated:

“….There are two serious areas of liquidity on either side of this range now:

To the downside, you can see our triple bottom formed around $60k, with our utmost range low yet to be tested/grabbed. I am not ruling out if we see a few more bearish days/weeks that this area can’t be visited. This would hit a HUGE liquidity zone around $57,000-$59,000/USD which would mark a new range low, take out all liquidity to the long side, and could present a very bullish reversal. I would be buying here and dollar-cost-averaging (DCAing) if so. I would also trigger some short term trades/leverage plays with strict invalidation (stop losses) below this level…”

This is exactly what has happened since we last spoke.

We have taken out range lows, grabbed all of that liquidity, and had a very bullish reversal.

Please see the chart below:

This was the exact same chart shown in last weeks Chronicle.

I am hoping for bullish continuation into next week.

My sights are on reclaiming $67k first, then all-time-highs from there.

It’s important to note we are currently playing out the Fractal I have provided in the past.

Please see the chart below:

Even more important we hit the exact level of interest I have been sending out for 2-3 months.

Please see the chart below:

Any further major levels hit below, I trade!

Any dips, I will eat!

The trading academy got some buys out, short term trades, and I want to quickly run back over what that service now entails:

• SHORTER TERM TRADES (NO LEV)
• SHORT TERM LONGS (LEV)
• SHORT/LONG TERM SHORTS (HEDGING)
• VIDEO CONTENT/LIVESTREAMING
• RESEARCH REPORTS

These are huge new additional features that have been added to our premier Cryptocurrency service.

If this interests you, feel free to book a free online consultation here!

Or shoot Taylor or I a message on Discord!

Cryptocurrency Mining

Btc has seen a drop back in hashrate which was expected, the average now sits at 614eh but the live rate is as low as we have seen since pre March at 518eh. 

This is the drop we were waiting for. Difficulty is set to drop by 5%, 2 days out from an adjustment which is welcome relief. 

Block fees are still varying, we saw a brief run up to 0.8btc per block additional which was over the weekend, now has dropped back to 0.3-0.4Btc. 

Around the networks:

Doge and LTC has seen some significant drops in difficulty, ranging from 10-18% in the past 7 days with a Doge 8% jump in price which gives increased profitability. 

Kaspa remains consistent with a 4% jump this week in difficulty. 

CKB was the big mover with a 37% drop in difficulty. 

Dash has seen a 20% jump in difficulty due to more D9s becoming available.