Crypto Chronicle - 19/03/24

Welcome to the 29th edition of the Crypto Chronicle, brought to you by Imperial Wealth.

You can listen to todays episode here.

News

Bitcoin achieves a record high against the US dollar

Bitcoin reached a new record high of $69,324 on March 6, capping a dynamic journey since 2021.

From peaks to lows, the cryptocurrency’s trajectory led from $68,900 in 2021 to a low of $15,460 in 2022, followed by a resurgence in 2024. 

The crypto community’s focus on regaining the 2021 all-time high persisted through significant market shifts. 

Bitcoin’s recovery, after dropping to $15,000, took over six months, gaining momentum by June 23, 2023, reaching $30,000. 

Despite challenges, optimism prevailed in 2023, and the approval of spot Bitcoin ETFs on January 11, 2024, impacted the market dynamics. The current value is $66,000

Read more here: https://imperialwealth.com/news/bitcoin-achieves-a-record-high-against-the-us-dollar

Bitcoin Miner Revenue Achieves Second-Highest Day in History

On March 7th, Bitcoin miner revenue reached $76 million, the second-highest in history, following Bitcoin’s record peak above $69,200. 

The surge occurred as Hut 8 closed its Drumheller mining site due to power issues. The facility, contributing 1.4% of the company’s holdings and 11% of its hash rate, mined an average of 48 Bitcoin annually. 

The revenue, $75.9 million, is second only to the April 14, 2021 record. The rise is attributed to Bitcoin’s all-time high. 

While block rewards linearly respond to price hikes, transaction fees depend on blockchain traffic, expected to increase amid growing retail investment in Bitcoin.

Read more here: https://imperialwealth.com/news/bitcoin-miner-revenue-achieves-second-highest-day-in-history

Grayscale and Coinbase Meet with SEC Regarding Spot Ethereum ETF

Grayscale and Coinbase met with the SEC to discuss introducing exchange-traded funds (ETFs) focused on spot Ethereum (ETH). 

Grayscale plans to convert its Ethereum Trust into an ETF, similar to its Bitcoin Trust conversion in January. 

The presentation emphasized Coinbase’s surveillance-sharing with the CME, highlighting parallels between Ether futures and spot markets. 

Grayscale is proposing a second ETF for Ether futures trading. 

Analysts speculate Grayscale’s futures ETF application could serve as a “trojan horse” for SEC approval. 

Multiple asset managers, including Invesco and BlackRock, seek approval for a spot Ether ETF. The SEC is expected to decide by May. 

Analyst Eric Balchunas notes uncertainty among asset managers regarding regulatory perspectives on crypto investment vehicles.

Read more here: https://imperialwealth.com/news/grayscale-and-coinbase-meet-with-sec-regarding-spot-ethereum-etf

MicroStrategy Utilises $800 Million Note Offering to Acquire Additional Bitcoin, Securing a Total Holding of 205,000 BTC

MicroStrategy has completed an $800 million convertible note offering, using the funds to acquire an additional 12,000 BTC for its Bitcoin treasury. 

The announcement on March 6 coincided with Bitcoin’s all-time high. 

Founder Michael Saylor confirmed the acquisition on social media, bringing MicroStrategy’s total BTC holdings to 205,000, acquired for $6.91 billion at an average cost of $33,706 per coin. 

The note offering carries a 0.625% interest rate, payable semi-annually from September 2024. 

The initial conversion rate is 0.6677 shares per $1,000 principal, equating to an initial conversion price of around $1,497.68 per share. 

MicroStrategy initially invested $250 million in Bitcoin in August 2020.

Read more here: https://imperialwealth.com/news/microstrategy-utilises-800-million-note-offering-to-acquire-additional-bitcoin-securing-a-total-holding-of-205000-btc

Trump Hints at Potential Acceptance of Cryptocurrency if Elected

Ex-President Trump hinted at a favourable stance towards cryptocurrency if he returns to the White House, noting Bitcoin’s independent growth and occasional use for personal profit. 

While expressing scepticism during his presidency, Trump acknowledged cryptocurrencies as an additional form of currency. 

In contrast, Republican presidential contenders like Vivek Ramaswamy supported crypto, while the Biden administration, notably through the SEC, has shown less favour. 

Biden’s potential inclination toward a U.S. CBDC is suggested by an executive order. 

Formerly positive about CBDC, Trump now opposes the idea, differing from other Republicans

Read more here: https://imperialwealth.com/news/trump-hints-at-potential-acceptance-of-cryptocurrency-if-elected

VanEck Reduces Fees to Zero for Bitcoin Spot ETF Amidst All-Time High Inflows

VanEck has waived sponsor fees for the first $1.5 billion in its Bitcoin Trust ETF until March 31, 2025, showing confidence in Bitcoin. 

The SEC-approved VanEck Bitcoin Trust ETF, with $297.86 million in assets and 4,299 Bitcoin, has gained an 87.7% return in two months. 

Amidst an SEC review of spot Bitcoin ETFs, a management expense war broke out, bringing the industry average below 0.30%. Bloomberg’s Eric Balchunas highlighted the ten U.S. spot Bitcoin ETFs reaching a record $55 billion AUM and $110 billion total traded volume in eight weeks. 

Bitcoin ETFs surpassed S&P 500 Industrial but trailed gold ETFs’ trillions.

Read more here: https://imperialwealth.com/news/vaneck-reduces-fees-to-zero-for-bitcoin-spot-etf-amidst-all-time-high-inflows

Major Ethereum Upgrade Dencun Goes Live on Mainnet

The recent conclusion of the Dencun hard fork heralds a significant boost to Ethereum’s Layer 2 ecosystem, enhancing scalability. 

Following the Shanghai upgrade in April 2023, Dencun integrates nine Ethereum Improvement Proposals, combining enhancements to transaction management and consensus mechanisms.

 Rolled out on March 13, this upgrade notably reduces transaction costs by introducing lightweight Binary Large Objects (blobs). 

Despite expectations, anticipated fee reductions won’t immediately affect Ethereum mainnet users, as noted by Max Wadington of Fidelity Investments. 

Meanwhile, gas fees remain high, with swaps averaging $86.15 and non-fungible token sales at $145.60, posing ongoing challenges to Ethereum’s scalability.

Read more here: https://imperialwealth.com/news/major-ethereum-upgrade-dencun-goes-live-on-mainnet

Elon Musk: Dogecoin to Be Utilised for Tesla Purchases ‘at some point’

Elon Musk hinted at Dogecoin integration as a Tesla payment option during a public event, sparking a 9.3% surge in Dogecoin’s value. 

Musk reaffirmed support for Dogecoin, citing its status as “people’s crypto.” Tesla already accepts Dogecoin for merchandise since January 2022. 

Musk’s backing of Dogecoin stemmed from requests at Tesla and SpaceX, aiming to endorse a cryptocurrency favoured by the public. 

Speculation arises over potential cryptocurrency integration on the X app, formerly Twitter, with anticipation for in-app payment services by mid-2024.

It remains uncertain if Musk will heed calls to mainstream Dogecoin beyond traditional fiat currencies.

Read more here: https://imperialwealth.com/news/elon-musk-dogecoin-to-be-utilised-for-tesla-purchases-at-some-point

Court Decision: Craig Wright Dismissed as Satoshi Nakamoto

Judge James Mellor’s ruling on March 14 declared Craig Wright not to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin. 

The lawsuit by the Crypto Open Patent Alliance (COPA) accused Wright, an Australian computer scientist, of falsely claiming Nakamoto’s identity since 2016. 

COPA aimed for an injunction against Wright’s continued assertions. Allegations of extensive document forgery were made against Wright. 

Despite his offer to settle out of court on January 24, COPA refused. 

Founded in 2020, COPA aims to advance cryptocurrency without patent barriers. 

Wright’s 2019 US copyright registration for the Bitcoin white paper faces MIT open-source licensing, enabling broader use.

Read more here:  https://imperialwealth.com/news/court-decision-craig-wright-dismissed-as-satoshi-nakamoto

Solana Surpasses Ethereum in Activity During Memecoin Craze Despite Transaction Failures

Over the weekend, Solana’s network outpaced Ethereum, driven by a surge in demand for Solana-based memecoins. 

Solana’s trading volume surpassed Ethereum’s by $1.1 billion, causing operational issues with transactions. Solana’s ping time ranged from 20 to 40 seconds, resulting in a 50% transaction failure rate for about 20 minutes, as reported by Solana validators. 

The surge was fueled by the popularity of new memecoins like Book of Meme (BOME) and Nap (NAP), with BOME’s market cap reaching $1.45 billion in 56 hours and NAP’s rising from $20 million to $330 million in 18 hours. 

Solana’s price surged to $197, marking a 7.6% weekly and 38.4% monthly increase. 

This surge propelled Solana to surpass Binance’s BNB, with a market capitalisation of $88.5 billion, making it the fourth-largest cryptocurrency.

Read more here: https://imperialwealth.com/news/solana-surpasses-ethereum-in-activity-during-memecoin-craze-despite-transaction-failures

Technical Analysis

Been a bloody week for the most part, and in fact, much has happened price action wise since the last Chronicle.

As you will hear in the podcast, we closed a daily and weekly candle above our previous all time high!

Please see the chart below:

Obviously since, we have seen the market distribute a lot of Bitcoin, with much selling coming into the market, with altcoins in particular taking a huge hit.

As discussed in the podcast, a lot of open interest, over-leveraging, memecoins, pre-sales, blah blah is somewhat ruining this market and creating a top.

Liquidity is going to places it shouldn’t unfortunately and the only way for people to learn is down.

Above is all my levels of interest currently locally both above and below that you can plan your trading or investing around.

We have already bounced from the first local GP that wiped out some lows – currently where we trade around. Would be interested to see if this holds.

Main HTF levels of support below us then include $57,000-$60,000 which I believe is our strongest, being the .786 retest, a major high volume area, and takes out a lot of liquidity/OI that could prepare us to V shape recover.

Ultimately, still remaining really positive. Regardless of any dump from here. As long as we don’t present bearish market structure by breaking our HTF bullish market structure, we are sweet in my eyes.

We have pumped over 4-5x from the bottom and get scared of a -10%, -20% pullback? No, not here at IW.

In the Trading Academy, we currently have $SOL from $25.5, $FET from $0.27, $FTM from $0.22, RUNE from $1.6 and more. We are primed. We are ready to DCA even further and we will definitely be adding to our new projects on any major dips from here.

Halving is less than a month away!

Can you believe it.

The ultimate demand and supply shock, I’m excited.

Cryptocurrency Mining:

BTC moving very well which is causing great opportunity for miners. Difficulty is projected to have a 3% drop after having a 5% rise the previous fortnight, which is welcome news.

Transaction fees into blocks is similar to last week where we are still around 0.4btc per block which is consistent with people holding BTC rather than using.

Around the grounds its quite similar, not huge movement, just coin price moving up and difficulty following suit. The main winners are Scrypt miners on LTC and Doge as it continues to see 4% drops across the network in difficulty after having such strong price growth.

Dash has also seen a 24% drop in difficulty as well.

Main profitable alt miners are the L7s (LTC) – K7 (CKB) and the KA3 (KDA).

We’ll be back next week.

Thanks!