1. Market Wrap: Bitcoin Consolidates Amid China Crackdown
China’s announcement preceded choppy price moves around $34,000, which left traders with little sense of direction.
Bitcoin traded sideways on Tuesday as market participants digested the latest regulatory crackdown from China. On Monday, the People’s Bank of China (PBOC) reiterated its long-held anti-crypto stance, warning institutions against providing services to crypto-related companies.
China’s announcement preceded choppy price moves around $34,000, which left traders with little sense of direction. Bitcoin trading remains in a tight range and the price is down about 6% over the past week.
Latest prices
Cryptocurrencies:
Bitcoin (BTC) $34085, -0.24%
Ether (ETH) $2326.6, +3.67%
Traditional markets:
S&P 500: 4343.5, -0.2%
Gold: $1796.8, +0.28%
10-year Treasury yield closed at 1.36%, compared with 1.437% on Friday
“Our strategists continue to expect a 6%-10% correction in U.S. equities this summer given that growth indicators are peaking, as well as a further sell-off in U.S. Treasurys that will see 10-year yields hit 2.25% by year end,” according to a Deutsche Bank report published on Tuesday.
2. Binance CEO ‘CZ’ Responds to Global Regulatory Pressure Calling Compliance a ‘Journey’
“We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ.
Binance’s CEO Changpeng “CZ” Zhao has likened the recent pressures by regulators against his exchange business to that of the initial development of the car.
In an open letter on Wednesday, CZ said the adoption and development of crypto contained many parallels to regulations around automobiles in that “laws and guidelines were developed along the way.”
“We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. “More regulations are, in fact, positive signs.”
3. Thriving Under Pressure: Why Crypto Is Booming in Nigeria Despite the Banking Ban
Crypto communities world-wide have found ways around government bans, and Nigeria is no exception.
Nigeria’s regulators tried to crack down on cryptocurrency. Now, a few months later, it’s clear their efforts haven’t worked. The nation is a prime example of how people will turn to crypto to cope with a struggling economy despite the prohibitive stance of the state.
In February, the Central Bank of Nigeria ordered banks to “identify persons and/or entities” who were conducting transactions in crypto or running crypto exchanges and “ensure that such accounts are closed immediately.” But that ban didn’t stamp out bitcoin in Nigeria. Rather, the crypto community turned to peer-to-peer trades, or sending payments directly to each other.
According to the blockchain research firm Chainalysis, the dollar volume of crypto received by users in Nigeria has been consistently growing in 2020 and 2021, which may be partly related to this year’s bull market. In May, Nigeria received $2.4 billion worth of crypto, compared with $684 million last December, the analytics firm said.
While that kind of geographical data comes with caveats, it’s clear that crypto is alive and well in Nigeria.
Wealth without borders
According to a survey in March by Statista, 32% of respondents in Nigeria use crypto. Nigeria also ranked eighth in Chainalysis’ 2020 report on cryptocurrency adoption around the world.
4. Ethereum’s London Hard Fork Expected to Launch on Aug. 4
The protocol update includes five Ethereum Improvement Proposals (EIPs), most notably EIP 1559 and EIP 3554.
Ethereum’s long-awaited London hard fork is likely to launch on Aug. 4 between 13:00 UTC (9 a.m. ET) and 17:00 UTC, with block 12,965,000. Many Ethereum enthusiasts are excited for the delayed release, while some are watching on with “cautious optimism.”
As a part of a roadmap designed to lead up to the release of Ethereum 2.0, which will replace Ethereum’s current proof-of-work protocol with proof-of-stake, the London hard fork has been implemented into various testnets. After successful activation on the Ropsten and Goerli testnets, the final hard fork release date was decided.
The protocol update includes five Ethereum Improvement Proposals (EIPs), most notably EIP 1559 and EIP 3554, that aim to counter various inefficiencies:
EIP 1559 introduces a new fee structure to make Ethereum less inflationary. This protocol change is highly controversial because it aims to burn part of the fees, hence decreasing miner revenue.EIP 3554 delays Ethereum’s difficulty bomb to Dec. 1. This mechanism will incrementally increase the difficulty of mining on the Ethereum network, effectively “freezing” proof-of-work in preparation for Ethereum’s move to proof-of-stake.
5. Bitcoin Miner Profitability Could Double After Record Drop in Network Difficulty
Mining economics have improved significantly, according to one analyst.
Active bitcoin miners may see their profitability double following the 28% downward difficulty adjustment in mining on July 3, according to several mining sites.
The North American hash spread — an index invented by digital asset financial services platform BitOoda to measure the difference between bitcoin mining revenue per megawatt-hour and the cost of the needed power — has almost doubled to $449 from $225.
“Mining economics have improved significantly,” Sam Doctor, chief strategy officer at BitOoda, wrote Monday in a newsletter.
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July 7th, 2021
