- Hashrate drops after halving
- wBTC could be a solution to network congestion
- USDT issuance points to a stronger market
- Temasek joins the Libra association
- JPMorgan begins servicing crypto companies
As we celebrate Bitcoin’s third halving, the market did NOT take a dive contrary to expectations. After another test of 10k, the post-halving rally certainly did not appear sustainable given:
1) Hashtrate drops to -30% after halving
2) longs outweighing shorts nearly 4 to 1!
All in all, feels like a healthy technical correction while OI remains strong at >$3b.
With lower total hashrate, the network is again facing congestion issues. Difficulty will adjust in ~4 days so we expect tx fees to be sky high until then. This continues to be a structural weakness to the system and has pushed higher interest in wBTC, an ERC20 token that represents 1 BTC. Total mint recently doubled to >2k BTC.
USDT issuance has nearly doubled since Mar. Reading different interpretations of this but historically this # is correlated to market strength (e.g. massive printing during the ‘17 bull run). Seeing a similar trend for the distant #2 player, USDC, while #s for PAX are a little misleading due to segregation of BUSD, HUSD, etc. which are all powered by Paxos.
More +ves on the corporate front;
1) Mega-fund, Temasek, joins the Libra association
2) JPM begins servicing select crypto related companies
The latter is an important step forward as the majority of banks are still avoiding these relationships. JPM’s change of heart could have a ripple effect on the industry.