Bitcoin Hashrate Reaches All-Time High – Market Info

The last two weeks suggest that the market capitalisation of cryptocurrencies has increased by 10%, stabilizing at around €1.85 trillion. There was a slight increase between 10 October and 22 October 2024, followed by a consolidation without major fluctuations, indicating a calm period in the market. Capitalisation thus maintained a steady course after this increase.

Source: Coinmarketcap

Bitcoin Hashrate Reaches All-Time High

Bitcoin’s hashrate has reached a new all-time high, which means that the security of this oldest blockchain network is further increasing. As of October 21 2024, the total computing power of the Bitcoin network has reached a record 769.8 exahash per second (EH/s).

According to data from BitInfoCharts hashrate has been growing continuously since 2021. This growth is closely related to the development of new mining hardware such as application specific integrated circuits (ASICs). While higher hashrate brings greater security, it also means higher costs for miners.

With the rising hashrate and the expected reduction in the reward per block after Bitcoin’s halving in 2024, there could be significant consolidation among miners, especially the smaller ones. Higher mining costs may cause smaller companies with less efficient facilities to shut down or move to where energy costs are lower.

Nazar Khan, co-founder and COO of TeraWulf, says energy-efficient equipment will be key to maintaining profitability after the upcoming halving. Companies that have quality infrastructure and low energy costs will have a distinct competitive advantage. TeraWulf, the world’s sixth-largest mining company, plans to expand its operations despite an expected reduction in block royalties.

Bitcoin mining companies are not increasing sales of their mined Bitcoin despite the increasing difficulty of mining. On October 20, for example, these companies sent just 2,916 BTC to exchanges, one of the lowest sales volumes in the past month. After the May 2024 halving, there was some consolidation among miners, with hashrate falling to a two-month low of 575 EH/s. James Butterfill of CoinShares explains this decline by the fact that unprofitable facilities stopped being used as they could not keep up with rising costs. Source

Chainlink Plans to Improve Data Reporting on Corporate Actions

Data provider Chainlink (LINK), in collaboration with financial partners such as Euroclear, Swift and Franklin Templeton, has announced an initiative to make corporate stock data more accessible and standardised using artificial intelligence and blockchain. The project addresses the lack of standardised and up-to-date data on corporate actions such as mergers, dividends and stock splits.

Automating and standardising this information could reduce operational inefficiencies and costs associated with manual data processing. “Turning disparate disparate information into uniform ‘golden records’ that can be considered a reliable source of truth for market participants is a huge step forward,” said Chainlink co-founder Sergey Nazarov.

The first phase focused on data on equities and fixed-income securities in six European countries. Chainlink combined its oracles with large language models (LLMs) such as ChatGPT and Google’s Gemini to extract the data and turn it into a structured ‘Golden Records’ format. He then used the CCIP protocol to distribute the data between blockchains.

Participants in the initiative include UBS, Wellington Management and Sygnum Bank. Partners from the blockchain ecosystem include Avalanche, ZKsync and Hyperledger Besu networks.

“By using AI and Chainlink oracles to standardize and deliver data, we can dramatically reduce manual processes and increase efficiency,” said Mark Garabedian of Wellington Management. Source

94% of Bitcoin Holders are in Profit

More than 94% of Bitcoin holders were in profit at the $69,000 price, surpassing the 2021 high.

Independent analyst Axel Adler Jr. reports that most of the coins were purchased at the $55K level. The Checkmate analyst from Checkonchain stated that short-term holders have benefited from purchases during the recent price declines.

History shows that Bitcoin’s high-profit share often precedes a price decline. In late September, when the price dropped 8.7% from $65,800 to less than $60,000, investors realized gains. A similar situation occurred in March 2024, when BTC reached a new high above $73,800 and subsequently fell 23% to $56,500.

Despite the growth, Bitcoin was rejected at $69,000. “$BTC is currently facing resistance in the large liquidity area,” said Japanese trader Jusko Trader, who pointed to the zone between $67,300 and $69,400 as a tough barrier.

If Bitcoin crosses the $68,000 threshold, short positions worth $1.65 billion may be liquidated. Capital inflows into U.S. spot Bitcoin ETFs, which have reached a cumulative $21.2 billion since Oct. 11, could also help, Farside Investors reports. Source

Buterin Introduced a New Evolution Phase of Ethereum

Vitalik Buterin introduced a new phase of Ethereum network development called “The Surge” in an October 17 blog post. This phase aims to achieve more than 100,000 transactions per second (TPS) on the core network and Layer 2 solutions, while maintaining decentralization and interoperability. Ethereum is focusing on a “rollup-centric” strategy, where the L1 layer provides security and decentralization, while L2 solutions provide network scaling. Buterin stressed the need for a cautious approach to maintain security and decentralization across the network.

One important challenge is to improve the user experience. The L2 ecosystem needs to act as a unified Ethereum system to make it easier for users to use and create a sense of cohesion. Buterin mentioned several areas that need improvement, such as better data availability and compression, increasing the trustworthiness of L2 networks, and improving transitions between blockchains.

Scaling the L1 base layer is essential to keep pace with growing demand. Buterin proposes increasing the gas cap, which could easily scale the network but also warns of the risks of centralisation that could undermine the credibility of the network. Other options for increasing scalability include reducing the cost of operations by using new bytecode formats and multidimensional gas pricing, or leveraging “native rollups,” which would enable parallel EVM runs with deeper integration into the protocol.

Finally, Buterin cautioned against significantly increasing the gas cap because it could undermine decentralization without significant scalability benefits. Therefore, all risks need to be weighed in order for the Ethereum network to remain strong and decentralized. Source

The Outflow of $79 Million Ended a Two-Week Inflow of Capital Into the ETF

On Oct. 22 2024, the ETFs saw negative net inflows, down $79.1 million overall. This decline was mainly due to the ARK 21Shares Bitcoin ETF product, which saw outflows of $134 million. Other products had either inflows or no activity.

The largest ETF by assets under management, BlackRock’s iShares Bitcoin ETF (IBIT), saw inflows of $43 million, still down significantly from $329 million the day before. A WhalePanda commenter on X noted that the price is hovering around $67,000.

The last time U.S. ETFs ended the day with negative net inflows was Oct. 10, when they lost $81.1 million. As Cointelegraph previously reported, ETFs have been experiencing a renaissance over the past month. Data from Ki Young Ju, co-founder of the CryptoQuant platform, revealed that as of Oct. 18, ETF ownership by institutions is up about 20%.

This year, 1,179 institutions have added to Bitcoin’s market cap thanks to spot ETFs. In addition to domestic demand, European investors have added more than $100 million in U.S. products this year. Last week, net inflows crossed the $20 billion mark for the first time, with total assets under management reaching a record $65 billion.

In research published with Coinbase, analyst firm Glassnode called the ETF’s success “one of the biggest stories in the market.” In the third quarter, U.S. Bitcoin ETFs saw more than $5 billion in net inflows, underscoring the strong demand for direct Bitcoin exposure among institutional investors. Source

Image Source: Farside Investors

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