It’s a pleb financial revolution, and we’re taking all the corn (says the data).
Pour that fresh cup, because this is your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on Bitcoin addresses over $1K hitting all time high, Kraken building an L2, Hong Kong opening spot crypto ETFs to retail investors & Marathon Digital expanding into Paraguay.
- Rekt Capital has the latest technical analysis for you on the market.
- Erik has an article on some of Lightning Network’s vulnerabilities.
- In case you missed it by Rebecca.
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Bitcoin Addresses Over $1K Hit All Time High
As of Monday, the number of addresses holding at least $1K USD worth of bitcoin (0.028 BTC) hit an all time high (ATH) of 8 million, according to data from Glassnode.
That’s great stuff. And congratulations to everyone now holding personal record amounts of bitcoin.
And since we’re on the subject, let’s review all the current data across small, medium, and large bitcoin addresses, and see what conclusions we can make (and FYI, all the data I reference below can be found at lookintobitcoin.com).
Interestingly, the number of addresses holding at least 0.01 BTC, 0.1 BTC, 1 BTC, and even 10 BTC, all hit new ATHs this year!
All these addresses peaked in early October, just before bitcoin blew up from the mid-$20Ks to the mid-$30Ks. Since then, they’ve either slightly declined (between 0.4% to 1% depending on address size) or flattened out. This shows that hardly any small or medium holders took chips off the table after this latest price pump.
With regards to the big boys, addresses with at least 100 bitcoin or more peaked back in early 2017 and have been ranging sideways since early 2022. Addresses with 1,000 bitcoin or more peaked in early 2021 and have been declining since.
When synthesizing this data, the main conclusion is that the number of bitcoin holders is growing. Addresses with at least 0.01, 0.1, and 1 bitcoin are together growing by 1 to 2 million per year, while addresses with 100 or 1000 bitcoin are shrinking at most by a few hundred per year.
This is all logical and good to see. It’s logical because as bitcoin’s price increases over time, the number of large holders will decrease (i.e. buying 100 bitcoin in 2016 ain’t the same as buying 100 today). And it’s good to see because more addresses with smaller amounts of bitcoin equals more decentralization, more democratization, and less volatility risk.
And what are your thoughts on this bitcoin address data? Do you agree, disagree, or see something else playing out? Reply to this email and let me know. I’d love to hear what you think.
Kraken to Build a Layer-Two?
Evidence is increasingly pointing to the idea that Kraken, the U.S.-based crypto exchange powerhouse, is in the process of building its own layer-two (L2) blockchain.
Here’s what we know so far:
- An unnamed source from within Kraken is telling crypto reporters that the company is actively searching for a blockchain technology firm to help construct their L2.
- This source is saying that Kraken is considering Polygon, Matter Labs, Nil Foundation, and a few other firms as their development partner.
- Kraken recently posted a job opening for a “senior cryptography engineer” to work on “designing and implementing layer-2 solutions.”
- Kraken has made no official announcements with regards to a new blockchain.
If Kraken goes through with the project, the company will be following in the footsteps of Coinbase, the latter of which launched the Base network in August.
And it makes sense that major crypto exchanges would want their own L1s or L2s, as these networks provide companies with additional revenue streams (validation or sequencing services fees) and more control over crypto rail infrastructure.
Judging from the blockchain firms that Kraken is apparently considering, it appears that their L2 will be on Ethereum, if indeed it comes to fruition.
Hong Kong Opening Spot Crypto ETFs to Retail Investors
More bullish news coming out of Hong Kong. The jurisdiction appears to be in the process of opening up spot crypto ETFs to the broader retail public.
In January, Hong Kong opened spot crypto ETFs to professional investors with a minimum of $1 million USD only. If an investor was below this $1 million minimum, then too bad so sad.
But in late October, Hong Kong’s Securities and Futures Commission (Hong Kong’s SEC) updated its rules to allow retail investors with less than $1 million the ability to trade in spot crypto ETFs, so long as the trades run through licensed intermediary brokers.
And then Hong Kong’s chief securities officer, Julia Leung, has been telling news reporters this week that Hong Kong’s looking forward to opening up investing to the broader public as the crypto ecosystem continues to progress.
The 2024 halving . . . US spot bitcoin ETFs . . . Hong Kong crypto ETFs for retail . . . crazy man Michael Saylor . . . get ready for some fireworks folks.
Marathon Digital Expands into Paraguay
Marathon Digital Holdings (MARA), the U.S.-based publicly traded bitcoin mining company, is expanding into Paraguay.
Specifically, Marathon is building a new 27-megawatt hydro-powered mining facility near Paraguay’s Itaipu Dam. Marathon says their goal is for the plant to produce 1.1 exahash per second (EH/s) of computing power by Q1 2024.
Paraguay’s Itaipu Dam
Marathon’s Paraguay announcement comes one week after news of the company’s Utah mining project that’s powered from landfill methane gas.
And the Paraguay project is the company’s second off U.S. shores as it launched a mining facility in the UAE in the beginning of 2023. That facility is currently running 2.3 EH/s with plans to hit 7 EH/s by the end of the year.
So Marathon, a U.S.-based company, is expanding internationally. Why are they doing this? Well, their executives say there’s two primary reasons.
- First, and most importantly for Marathon, the international sites “improve margins”. This can really only mean that Marathon’s energy expenses in these locations are substantially reduced compared to their other existing projects (remember, a miner’s two major expenses are electricity and computers). And given the next bitcoin halving is just around the corner, it makes sense Marathon needs to do this.
- And second, achieving geographic diversity in mining reduces the company’s regulatory risks. Imagine having all your mining facilities in one country that then arbitrarily decides to tax the hell out of the industry or implement some other onerous regulation.
So, Marathon’s reasoning here makes complete sense. And as an added bonus, the mining expansions further decentralize the bitcoin network. So it’s a win-win for everyone.
In today’s edition of the Altcoin Watchlist, the following cryptocurrencies will be analysed and discussed:
- Ocean Protocol (OCEAN)
- Dogecoin (DOGE)
- Woo Network (WOO)
- Stellar (XLM)
- Injective (INJ)
Let’s dive in.
Ocean Protocol — OCEAN/USDT
A few weeks ago in the Altcoin Watchlist, I covered OCEAN and discussed how a downside wick below the Channel Bottom followed by a reclaimed of the Channel Bottom would position OCEAN for a revisit of the Channel Top:
And here is today’s update:
OCEAN reclaimed the bottom of the Channel and broke out from it, rallying +57$ in total.
And with a Weekly Close above the green area, OCEAN could be setting itself up for a retest of this region in an effort to solidify an old resistance into new support.
This is necessary to hold as support if OCEAN is to continue building on its current rally; holding support at green successfully would enable a move to the red $0.48 highs above.
On the Monthly, the need for a retest is even clearer and here’s why:
OCEAN needs to retest this red region as support to continue higher.
In the past, this red region acted as a strong resistance; many FOMO upside wicks had formed beyond this point, preceding a rejection.
That’s why a Monthly Close beyond this point is so crucial; a Monthly Close above red would shift the trend, especially if a following retest of red into new support occurs.
Because the threat here is that this current OCEAN Monthly Candle beyond red could end up as a FOMO wick as well, just like the others.
And if this were to end up being the case, OCEAN would likely revisit at least the blue levels below.
It’s crucial that OCEAN holds red as support.
Dogecoin — DOGE/USD
In mid-October, I shared the following analysis on DOGE:
I also mentioned the following:
However, I am open to the possibility of DOGE reclaiming its Lower Low on price action, because the breakdown confirmation hasn’t been too decisive or strong. There needs to be a stronger reaction for the scenario of a potential fake-breakdown to assuage.
And here is today’s update:
Dogecoin has rallied +34% from Channel Bottom to Channel Top.
Last week, I mentioned the following two key triggers for me for DOGE:
- Reclaim of the Channel Top as new support to confirm the breakout
- Revisit of the Channel Bottom for a retest
It looks like the first is becoming a reality, now that a Weekly Close above the Channel Top has occurred as well.
DOGE is currently in the process of a retest of the Channel Top as new support.
Successful retest here would enable a confirmed breakout from this year-long Downtrending Channel.
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Some Vulnerabilities of Bitcoin’s Lightning Network
As Bitcoin’s Lightning Network usage has shot up even through the bear market – and it’s worth reminding ourselves of the near miracle it is: moving BTC across the world in seconds. – it’s still worth zooming in on the vulnerabilities.
There are still wrinkles to be ironed out. Usability and liquidity are two vulnerabilities of Bitcoin’s Lightning Network.
Before diving into the vulnerabilities and the potential solutions, let’s quickly recap what Lightning is.
Crypto Market News
- The Simpsons digitized Bart into an NFT in its latest episode “Wild Barts Can’t Be Token.” Source
- MicroStrategy has bought another 155 bitcoins for $5.3 million bringing its total holdings to 158,400 BTC worth over $5.4 billion. Source
- MicroStrategy’s Michael Saylor sees Bitcoin rising by 10x due to the halving and a spot Bitcoin ETF. Source
- Invesco and Galaxy’s spot Bitcoin ETF has been added to the Nasdaq’s trade clearing website under the ticker BTCO. Source
- Kraken has said it’s looking for a partner to help build a Layer-2 network. Source
- PayPal has received approval from the UK’s financial regulator to offer crypto services after a brief halt in crypto activity. Source
- Coinbase has launched regulated crypto futures services for US retail investors through its advanced trading feature. Source
- ProShares has launched a short ETH-linked ETF on the New York Stock Exchange’s Arca under the ticker symbol SETH. Source
- A fake Ledger Live app made its way into Microsoft’s app store and has stolen $588K from users. Source
- Block’s Q3 earnings beat expectations with $5.62 billion in revenue and $44 million in profit on its Bitcoin holdings. Source
- DZ Bank, Germany’s third-largest bank has launched its own crypto custody platform for institutional investors. Source
- OpenSea has laid off 50% of its employees as its CEO announces the platform will be going in a new direction. Source
- Hong Kong is reportedly considering opening spot crypto ETFs to retail investors. Source
- The London Stock Exchange is hiring a digital assets director with a passion for crypto and blockchain. Source
- FTX wants to liquidate $744M in assets in Grayscale and Bitwise Trusts. Source
- Sam Bankman-Fried is likely to serve 25 years rather than the maximum sentence of 115 years says a former DOJ prosecutor. Source
Coins and Projects
- Bitcoin has arrived in the Cosmos ecosystem with the bridged token, Nomic nBTC providing users with a Bitcoin equivalent on Cosmos apps. Source
- Marathon Digital has started a Bitcoin mining pilot project in Utah using methane gas from landfill waste. Source
- Bitcoin is “exponential gold’ according to the director of global macro at Fidelity Investments. Source
- Bitcoin Ordinals token ORDI has been listed on Binance and its price skyrocketed 48%. Source
- Caitlin Long’s Custodia Bank has finally launched its Bitcoin custody platform. Source
- PayPal has received a subpoena from the US Securities and Exchange Commission (SEC) requesting documentation for its PYUSD stablecoin. Source
- Arbitrum DAO has passed a proposal to allow ARB token staking. Source
- Solana has launched a gaming toolkit in beta called GameShift to help developers integrate Solana into video games. Source
- Solana’s scaling solution called Firedancer has gone live on the testnet helping SOL’s price gain over 30% in a week. Source
- Solana-based NFT marketplace Magic Eden has partnered with Yuga Labs to launch a new marketplace for royalty NFTs. Source
- Aave paused its V2 operations on Ethereum and froze some assets on V3 on Polygon, Aribtrum, and Optimism due to a reported issue. Source
- NEAR has announced a partnership with Nym Technologies, a privacy infrastructure project backed by Binance Labs and A16z. Source
- The Graph is rolling out new blockchain data services including AI-assisted querying, verifiable data, and improved tooling. Source
- The US Securities and Exchange Commission (SEC) has charged the SafeMoon team with fraud. Source
- Ripple has partnered with Georgia’s central bank for a CBDC pilot project. Source
- Shiba Inu has launched its own SHIB Name Service on its Shibarium Layer-2 network. Source
- Monero’s community crowdfunding wallet has been drained of almost $460K worth of XMR. Source
- The Federal Reserve has left US interest rates unchanged at 5.25-5.5%. Source
- The Bank of England has kept UK interest rates unchanged at 5.25%. Source
- Australia’s central bank has raised interest rates to a 12-year high of 4.35% in its first raise since June. Source
- Hong Kong has completed a CBDC pilot test with Visa and its local banks. Source
- Japan will spend $113 billion on a stimulus package to reduce inflation and boost the Prime Minister’s poll ratings. Source
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
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Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
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