By Alex Clark
Bitcoin and Ethereum have both recovered after dropping below crucial support levels of $30,000 and $2,000 yesterday.
It is thought that Bitcoin’s decline was in part caused by the seismic mining shift in China. One of the largest migrations of Bitcoin hash-power to date is underway following an official ban on mining activities in a number of Chinese provinces. This has forced many miners to shut down or migrate their hash-power outside of China's borders to friendlier jurisdictions.
For example, Chinese Bitcoin mining firm BIT Mining has delivered a batch of 320 mining machines to Kazakhstan, with 2,600 more to follow. As the Chinese mining industry grapples with the challenges of relocating, it is expected that some will liquidate a portion of their accumulated bitcoin treasuries, either as a hedge against risk, to fund their migration or to exit the industry entirely. However, many see China’s crackdown as bullish news, likening it to the country’s ban on Facebook and Google in 2009 and 2010.
Also intensifying the volatility of the markets is the $2.5 billion worth of options and another $2 billion in futures contracts which are set to expire this Friday.
While the Bitcoin market is showing a weakness in price there is an unwillingness to sell at these prices. Since the $64k top, long-term holders own an additional 5.25% of the circulating supply and data from Santiment shows that addresses holding between 100 and 10,000 BTC have increased their positions by $367 billion in the past 31 days. For example, MicroStrategy has purchased an additional 13,005 BTC at an average price of $37,617 for a combined total of roughly $489 million.
Dogecoin is down 75% since its all-time-high in May and, astonishingly, investors are asking Elon Musk to intervene. Doge dumped to $0.16 earlier today and is close to losing its spot in the top 10 largest digital assets by market cap but, for once, Musk remains silent.
Crypto custody provider Fireblocks is being sued by crypto staking platform StakeHound after an employee irrevocably lost access to StakeHound’s digital assets, causing the loss of 38,178 ETH coins, equivalent to over $76 million at the time of writing.
Sotheby's has said it will accept cryptocurrency as payment for a rare 101-carat diamond which is expected to fetch more than £10m.
Finally, after announcing that 2.3 million adults in the U.K. now hold crypto assets, up from 1.9 million last year, the FCA has compiled a list of 111 crypto firms that appear to be operating unregistered, so that investors can double check if a firm they intend to deal with is non-compliant.