Cryptocurrency Market Overview 07.07.2023
News block
1. The UAE is a leader in mining in the Middle East
The United Arab Emirates is gradually strengthening its status as the leading jurisdiction in cryptocurrency mining.
According to Hashrate Index, the total bitcoin mining capacity in the UAE is about 400 MW, or 4% of the global hashrate of the Bitcon network. The four world leaders in this indicator include the United States, China, Russia and Kazakhstan. However, the UAE is rapidly gaining momentum thanks to substantial resources for the production of clean energy.
Previously, electricity was generated in the country at the expense of natural gas, but recently the shares of nuclear and solar energy have been growing rapidly, the surplus of which is directed to mining cryptocurrencies.
Among other advantages for miners is the policy of zero taxation in the country. This means that bitcoin miners can register in one of the country's more than 30 free trade zones and avoid corporate tax, value added tax and import duties.
According to Glassnode, currently bitcoin miners continue to be profitable. The delta between the spot price and the estimated cost of mining one coin is +$7.6k:
- Spot price: $30.5k
- Estimated cost of mining one BTC: $22.9k
2. Israel: tax benefits for foreigners
Foreigners can get an exemption from capital gains tax when selling digital currencies in Israel. The relevant bill has passed a preliminary reading in the country's parliament.
The author of the bill is a member of the Knesset Dan Iluz. According to him, the bill enjoys the full support of the parties of the ruling coalition.
According to the explanatory note of the bill, it should increase the attractiveness of the country for investors around the world.
The bill also suggests using the term "digital currency" separately from "security".
Overview of the crypto market
🔸 The current capitalization of the crypto market is 1.219 trillion
🔸 Trading volume for the last day is $60.77 billion (+46%)
🔸 BTC Dominance 48.2%
🔸 Fear and Greed Index:
- today 55, yesterday 56, a week ago 59
where, 0 is extreme fear (may be a sign that investors are too scared - it's often a good time to buy), and 100 is extreme greed (the market needs correction).
Yesterday, bitcoin first rose to a 3-month high to $31.5k, and then showed a decline to the level of $30k on the publication of strong data on employment in the US private sector. The ADP report surprised the market by showing that 497,000 private sector jobs were added in June, more than double the consensus forecast of 220,000. This is likely to allow the Fed to be more aggressive in its campaign to raise interest rates.
CEO of Banxa (a provider of cryptocurrency payment infrastructure in the USA) Richard Miko notes: "We may still have one or two rate hikes ahead, but the Federal Reserve is definitely approaching peak rates if they haven't been reached yet. We will probably have to wait until Bitcoin halving next year to experience a full-fledged bull market. The next 18 months are going to be very exciting."
New bitcoin tools for AI
Lightning Labs, the company developing the Bitcoin Lightning Network, has introduced a new set of tools designed for AI developers.
New tools, including LangChainBitcoin, are designed to help seamlessly integrate bitcoin and the Lightning Network into their AI applications. The package includes LLM Agent BitcoinTools, which allows developers to create AI agents that can store Bitcoin balances, send/receive bitcoins via Lightning, and interact with Lightning Network Daemon nodes.
Recall that the Lightning Network is a second-level solution for the Bitcoin blockchain. It is a network of payment channels between users, which is designed for fast and cheap transactions.
In 2023, the number of nodes in the Lightning Network began to recover after a difficult 2022:
Cryptostrategy for the third quarter of 2023
Thanks to the recent news about the spot bitcoin ETF, a certain optimism has returned to the crypto market. However, there are big doubts that the current rally will continue. It is possible that now the best strategy would be to simply wait until BTC goes up or down from the current trading range.
There are several reasons why a strong growth of BTC in the near future seems unlikely:
Retail interest in cryptocurrencies is almost at the bottom. Even the recent news about applications for the launch of a spot bitcoin ETF did not lead to significant interest from retail investors. According to Google Trends, most investors are now crazy about AI and do not show much interest in the crypto market.
Historically, BTC has always reached new price highs (ATH) after halving. And there are still more than 200 days until the next halving.
🔸 The total market capitalization of stablecoins tends to decrease. This indicates not only that retail interest in cryptocurrency is almost at an all-time low, but also that whales are also not investing large amounts of money in cryptocurrency. Until this changes, capital simply moves from one narrative to another without new money coming in.
At the same time, if BTC falls back to $25k or even to $20k, then these will be good price levels to increase crypto activity.
