The Bitbuy Brief: Revisiting Key Bitcoin Metrics ūüďą
Article Author: Bitbuy Staff
Bitbuy Staff
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The Bitbuy Brief

Issue #116

October 1st, 2020


Weekly Market Movement

Analysis: Bitcoin and the cryptocurrency market in general has dropped sharply today, due to the news that the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) have filed charges against crypto derivatives exchange BitMEX. This sudden drop in the market wiped out a week of modest gains for most major coins.

Big Story Of The Week

With BTC Settling Into A Range Between USD 10k And 11k, We Wanted To Revisit Key Metrics From The Network For Further Context

  • BTC‚Äôs¬†hash rate¬†– a reflection of¬†the¬†total computing power used to mine¬†the¬†network – achieved a new record high on September 24 according to Similarly,¬†network difficulty, described as a ‚Äėmeasure of how difficult it is to mine a new block for¬†the¬†blockchain‚Ķ‚Äô which rises as more actors attempt to mine BTC in order to manage stock-to-flow, achieved a record high last week. Stepping away from on-chain metrics, BTC¬†HODL waves¬†– a reflection of a coin‚Äôs age, i.e. ‚Äėwhen it was last used in a transaction‚Äô – remain relatively unchanged despite¬†the¬†asset‚Äôs drop after challenging USD 12k at¬†the¬†beginning of September. September‚Äôs market action did see a slight uptick of BTC deposited on Bitfinex (see chart), however, not breaking¬†the¬†metric‚Äôs mostly sideways movement since May. September also saw a slight jump in¬†the¬†number of addresses with a¬†balance greater than 100 BTC. However, despite that jump that metric remains relatively in line with trends established in September 2018 where large holders seemed to have sold off ahead of¬†the¬†bear market of winter 2018/2019.

Takeaway:¬†Those supporting a bullish BTC thesis would probably point to¬†the¬†flat metrics as evidence of an unchanged outlook for¬†the¬†asset despite a failure to break above USD 12k. A sustainably increasing hash rate and difficulty setting new highs shows growth and optimism in what is BTC‚Äôs most capital intensive sub-sector, mining. Ultimately, these metrics demonstrate that in spite of interest and price gains shifting towards DeFi and elsewhere (BTC Dominance declining), metrics that would be considered BTC ‘fundamentals’ continue to show incremental growth.

Other Weekly Headlines

  • Ethereum 2.0 testnet Spadina has launched¬†The¬†testnet, which will allow prospective stakers to simulate joining¬†the¬†network and is considered a key step towards a full launch of Eth 2.0, will be up for 3 days. –¬†link¬†– @CoinDesk
  • Filecoin, a decentralized data storage network built on a blockchain, announced it will launch its mainnet in October.¬†Filecoin raised USD 250M via an ICO held in 2017.¬†The¬†announcement was made on Sunday. –¬†link¬†– @TheBlock
  • Eminence.Finance, an unfinished decentralized finance platform, suffered a compromise resulting in a loss of USD 7M.¬†The¬†exploiter initially took USD 15M from¬†the¬†platform, but later returned USD 8M to Yearn.Finance, another DeFi platform built by Andre Cronje, who also built Eminence.Finance. –¬†link¬†– @TheBlock
  • EY has launched a procurement management solution, called EY OpsChain Network Procurement, built on Ethereum.¬†The¬†platform, available in beta version, allows users ‚Äėto run private, secure, end-to-end procurement activities on¬†the¬†public Ethereum blockchain.‚Äô –¬†link¬†– @EY
  • FinCEN director Kenneth Blanco touched on crypto at a virtual conference on Tuesday.¬†Blanco described¬†the¬†‚Äėvirtual currency space‚Äô as a priority area. Blanco said cryptocurrencies continue to ‚Äėcome up‚Äô during AML-related discussions with banks adding that exchanges are not¬†the¬†only clients that can come with ‚Äėcrypto risk exposure.‚Äô –¬†link¬†– @FinCEN

Other Crypto Media

Why NFTs Are Attracting Everyday People To Crypto, Unconfirmed Podcast, September 25, 2020

  • Jake Brukhman, co-founder and CEO of CoinFund, discusses what non-fungible tokens, or NFTs, are and¬†the¬†new business models that can emerge around them.

Why Bitcoin Now: Andreas Antonopoulos And Dan Held On Bitcoin’s Monetary Policy, Unchained Podcast, September 29, 2020

  • Bitcoin proponent, educator and author Andreas M. Antonopoulos and Dan Held, growth lead at Kraken, discuss BTC‚Äôs ‚Äėmonetary policy.‚Äô

Central Bank Digital Currencies – Money Reimagined, Deutsche Bank, September 2020

  • Deutsche Bank released a report on progress towards¬†the¬†launch of a national digital currency around¬†the¬†world.


Disclaimer: The opinions and analysis expressed in this newsletter are those of the writer, and not of Bitbuy. Nothing in this note should be considered investment advice.