Happy Sunday!
Bitcoin’s price continues to move sideways, as it has for the past almost two months. Some think the bottom’s about to fall out. Others expect a supercycle to explode at any moment.
For me, the only prices that matter are $29,000 and $49,000. Any price in between? Nothing to worry about, nothing to get excited about. Premium subscribers know why (although anybody who follows me on any outlets will know the importance of $29k).
Not much to share this week. I plan to take some time off in the latter part of July and early August. I’ll keep you posted on exactly when that will be.
Meanwhile, two bits of content you may enjoy.
Web3 & NFT Q2'21 Report
Bottom line: NFTs continue to grow in variety and usage while Web 3.0 protocols see more activity with each passing day.
My take: if the last leg of this bull market revolved around DeFi, DEXs, and DAOs, the next leg might center on NFTs and Web 3.0. You might think “the NFT craze is dead” or “Web 3.0 will never work,” but I wouldn’t be too quick to dismiss these things. After DeFi summer ended and DeFi tokens tanked, lots of people thought DeFi would never work—failed smart contracts, poor value-capture mechanisms, expensive AF, rug pulls, scams, etc. All those problems still plague the DeFi space (and all of crypto), but that doesn’t stop developers and entrepreneurs from building and iterating. Likewise for NFTs and Web3.0.
Why we care: there’s a difference between “it’s dead” and “nobody’s hyping it anymore.” Likewise, it’s dangerous to dismiss a technology just because you haven’t made money off of it yet. Sometimes you can find great opportunities where nobody else is looking.
Many of China’s miners shut down and shipped off to other countries. As a result, difficulty dropped 27% last week, back to levels not seen since June 2020.
As a result, mining bitcoin is less expensive and more profitable than it’s been in a year (at least until Chinese miners relocate or new miners enter the network). Watch this brief Coindesk video summing up the situation.
What does this mean for the price of bitcoin?
Probably not much. As we’ve seen in the data I covered over the past few months, some Chinese miners did sell at a somewhat higher rate in the past month or two, but overall, the mining community has sold less frequently than normal and far less than it did from January to March.
Of those miners who benefit from the Chinese exodus, will they view their extra bitcoins as surplus to sell? That would push prices lower. Or, will they see their surplus as a temporary bump until the network normalizes—and as a result, continue to hoard in anticipation of getting better returns during the next leg up?
We shall see.
Relax and enjoy the ride!
Sunday Rundown - July 11, 2021