Bitcoin and the rest of the crypto market edged higher last week with bitcoin at one stage hitting its highest level in 24 days, but finished the week flat. Taking steam out of the market were the US Jobs numbers. Although jobs growth slowed, it did not slow as much as expected, prompting fears that rate hikes of .75% will continue and possibly increase to 1% next month in the US.
At the time of writing, bitcoin is trading at around US$19,422. Ethereum slightly underperformed bitcoin, up 0.35% vs bitcoin’s 0.70%.
Bitcoin’s market cap is at US$372.5B, with the total crypto market up to US$940.5B. Bitcoin’s market dominance is at 39.61%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $19,422 | $20,380 | $18,970 | 0.70% |
| ETH (in US$) | $1,316 | $1,380 | $1,275 | 0.35% |
Source: CoinMarketCap. As at 11 October 2022. Past performance is not indicative of future performance. Performance is shown in US dollars and does not take into account any USD/AUD currency movements.
Source: Glassnode. Past performance is not indicative of future performance.
Crypto news we’re watching
SEC cracks down on celebrity endorsements
The US Securities and Exchange Commission (SEC) announced charges against Kim Kardashian for promoting the crypto security Ethereum Max (EMAX) without disclosing the $250K payment she received to do so. Kardashian agreed to settle the charges for $1.26M, and cooperate with the investigation. Her fine includes the payment she received plus interest, in addition to a $1 million fine. The SEC judged that she had failed to disclose her payment from EthereumMax, even though she included an #AD hashtag in the Instagram Story. EMAX is down by about 99% from its peak in May 2021.
Last week, SEC Chairman, Gary Gensler, tweeted: “Today @SECGov, we charged Kim Kardashian for unlawfully touting a crypto security. This case is a reminder that when celebrities/influencers endorse investment opps, including crypto asset securities, it doesn’t mean those investment products are right for all investors.”1
Binance Smart Chain suffers attack
BNB, the fifth-largest cryptocurrency by market cap, suffered an attack where approximately US$100m was taken by hackers last Thursday, according to reports. However, the attack did not affect holders of BNB, which is the coin issued by Binance Exchange, the largest crypto exchange by daily trading volume. The hacker(s) were able to trick the blockchain network into creating additional BNB rather than stealing anyone’s particular coins. BNB runs multiple chains and the exploit occurred on a cross-chain bridge. A cross-chain bridge is a protocol that lets a user port digital assets from one blockchain to another.
Binance Smart Chain contacted validators and temporarily suspended all transactions until the issue was contained. The CEO of Binance, Changpeng Zhao, tweeted: “An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC. The issue is contained now. Your funds are safe. We apologise for the inconvenience and will provide further updates accordingly.”2
Coinbase launches in Australia
Coinbase, one of the largest crypto exchanges in the world, has incorporated in Australia. The entity known as Coinbase Australia Pty Ltd, which registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC), will provide digital currency exchange services. Features of the local platform will include PayID which will allow investors to deposit funds into the exchange direct from local bank accounts, and Retail Advanced Trading, which is a tool that will give local customers access to trading tools and 24/7 chat support.
Australian country director, John O’Loghlen, said of the Australian market: “They trusted Coinbase as one of the first platforms to enable and facilitate their crypto investments and now we’re elevating their experience to use the platform locally. With over 200 assets available on the Coinbase Exchange, Australian customers now have broader and seamless access to the crypto ecosystem.”3
On-chain metrics
Bitcoin (BTC): Mean Hash Rate (7d SMA)
This metric provides the average estimated number of hashes per second produced by miners in the Bitcoin network. The hash rate is the amount of processing and computing power being given to the network through mining. The higher the hash rate, the higher the security of the blockchain network.
Looking at data from on-chain analytics company Glassnode, Bitcoin hashrate has reached a new all-time-high of 257 Exahash per second. According to Glassnode, this is equivalent to the 7.75 billion people on earth each completing a SHA-256 hash calculation approximately 30 billion times every second.
Source: Glassnode. Past performance is not indicative of future performance.
Bitcoin (BTC): Mining Difficulty
This metric looks at the current estimated number of raw hashes required to mine a block. A higher difficulty implies an increase in cost of production as more hashpower competition enters the network.
According to data from Glassnode, Mining Difficulty had a series of upward adjustments, recently hitting all-time highs. In addition to lower bitcoin prices, this has the potential to place further stress on the bitcoin mining industry.
Source: Glassnode. Past performance is not indicative of future performance.
Altcoin news
In altcoin news, crypto data provider to blockchains, Chainlink (LINK) partnered with SWIFT, the interbank messaging system that allows for cross-border payments. According to its website: “Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications.”
Chainlink uses cross-chain interoperability protocol (CCIP) in an initial proof-of-concept, which will enable SWIFT messages to instruct on-chain token transfers, helping the interbank network to be able to communicate across all blockchain environments.4
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Investing in crypto assets or companies servicing crypto-asset markets should be considered very high risk. Exposure to crypto assets involves substantially higher risk when compared to traditional investments due to their speculative nature and the very high volatility of crypto-asset markets. Investing in crypto assets or crypto-focused companies is not suitable for all investors and should only be considered by investors who (i) fully understand their features and risks or after consulting a professional financial adviser, and (ii) who have a very high tolerance for risk and the capacity to absorb a rapid loss of some or all of their investment. Any investment in crypto assets or crypto- focused companies should only be considered as a very small component of an investor’s overall portfolio. |
3. https://www.digitalnationaus.com.au/news/coinbase-expands-product-suite-in-australia-586070
Off the Chain is published every Tuesday. It provides the latest news on bitcoin and the rest of the crypto market, along with analysis and insights into the world of crypto.
It provides general information only and is not a recommendation to invest in any crypto asset, crypto-focused company or investment product.
Written by
Justin Arzadon
Director, Adviser Services & Head of Digital Assets.
C4 Certified Bitcoin Professional (CBP) and Blockchain Council Certified Bitcoin Expert™ with over 18 years’ experience in the ETF market. Passionate about the future of money.
Read more from Justin.