The anticipation has begun, with less than a week to the next bitcoin halving, but that did not prevent bitcoin from trading lower along with the broader crypto market. Both equity and crypto markets fell as geopolitical tensions rose due to possible conflict between Israel and Iran affecting the Middle East.
Bitcoin was down -7.05%, while ethereum fell -8.94% over the last 7 days. Bitcoin’s market capitalisation is US$1.27 trillion, with the total crypto market cap at US$2.34 trillion and bitcoin’s market dominance rising to 54.4%.
| Price | High | Low | Change from previous week | |
| BTC (in US$) | $64, 490 | $72,668 | $61,858 | -7.05% |
| ETH (in US$) | $3,084 | $3,717 | $2,880 | -8.94% |
Source: CoinMarketCap. As at 14 April 2024. 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
The countdown continues
Bitcoin miners validate information in a blockchain by generating a cryptographic solution that matches specific criteria. A reward in bitcoin (BTC) and fees are paid to the miner who is the first to solve the puzzle.
The BTC reward started at 50 BTC when bitcoin was officially launched in 2009. The Bitcoin blockchain is algorithmically programmed to decrease the BTC rewards by half after every 210,000 blocks added. There have been three halvings already, with the next one expected to drop on 20 April. This will reduce the rewards from 6.25 to 3.125 BTC. This process will recur until all 21 million BTC are mined, which is expected to happen in 2140.
The halving process, in addition to the 21 million BTC production cap, is designed to slow supply growth, which reinforces scarcity. It is also one reason some believe the price of bitcoin will continue to increase over time. This is the opposite of fiat currencies which are controlled by central banks and can be printed at will with no supply cap. In the past, this has led to issues such as hyperinflation and debasement of a currency. Some argue that Bitcoin can be used strategically as a hedge against the debasement of currency1.
Hong Kong ETF approvals
Approvals for spot bitcoin and ethereum ETFs in Hong Kong may be announced this week, according to a report from Bloomberg. If the announcement is made, these ETFs may be trading by the end of the month. The approval of these products would be a boon for the cryptocurrency market overall2.
Cleanspark acquires Bitcoin mining machines
Bitcoin mining company Cleanspark has exercised its right to purchase 100,000 bitcoin mining machines from Bitmain with the intention of increasing BTC mining efficiency. The firm expects an increase of 17% in hashrate. Cleanspark’s CEO stated: “We expect that we cemented our lead as the most efficient publicly traded bitcoin miner at scale in North America. Our extraordinary scale has allowed us to make meaningful gains in our bitcoin production without having to increase the energy use of our data centers3.”
Cleanspark Inc is currently held in Betashares Crypto Innovators ETF (ASX: CRYP)4. According to the company’s website, the firm owns and operates data centres that primarily run on low-carbon power, which responsibly supports bitcoin.
BTC: Block Height
The block height of bitcoin refers to a specific location in the blockchain, measured by how many confirmed blocks precede it i.e. the total number of blocks ever created and included in the main blockchain. The current block height is an indication of its current size or time in existence.
According to data from Glassnode, the current block height is 839,102. The bitcoin network on average takes about 10 minutes to mine one block, and the next halving is set to occur at 840,000 blocks. At this time, the mining reward will fall from 6.25 BTC to 3.125 BTC.
Source: Glassnode. Past performance is not indicative of future performance.
This metric shows the current estimated number of hashes required to mine a block. Note: bitcoin difficulty is often denoted as the relative difficulty with respect to the genesis block, which requires approximately 2^32 hashes. For better comparison across blockchains, our values are denoted in raw hashes.
According to data from Glassnode, network difficulty continues to escalate and is at all-time highs. This will make it increasingly difficult to mine blocks.
Source: Glassnode. Past performance is not indicative of future performance.
Altcoin news
The top performing Top 30 altcoin over the past week, up over 18%, was Toncoin (TON), which now sits in the Top 10. TON has returned over 54% over the last month and 184% over the last year.
Helping push the coin higher recently is news of a collaboration between TON Society and AI tech firm HumanCode. The firms are introducing palm scanning to verify and provide secure digital identities for 500 million Telegram users in five years. Hopes are that this will become the new digital verification standard5.
According to Toncoin’s website, The Open Network (TON) is a decentralised and open internet platform made up of several components. TON is focused on achieving widespread cross-chain interoperability, while operating in a highly scalable secure framework, with the goal of eventually reaching hundreds of millions of users.
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.
References:
1. https://www.moneymag.com.au/what-is-bitcoin-halving
2. https://www.bloomberg.com/news/articles/2024-04-12/hong-kong-bitcoin-ether-etf-approval-expected-as-soon-as-monday?embedded-checkout=true
3. https://news.bitcoin.com/cleanspark-to-upgrade-mining-fleet-with-100000-s21-pro-bitcoin-miners-from-bitmain/
4. As at 14 April. no assurance is given that this company will remain in the portfolio or will be a profitable investment.
5. https://blog.ton.org/human-code-brings-ai-powered-biometrics-to-ton-ecosystem
Off the Chain is published every second 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.
This article mentions the following funds
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.