Monthly Archives: May 2022

The below is a full, free article from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

The purpose of this release in specific will be twofold; the first will be to update readers on the latest updates for publicly-traded miner hash rate, production, and bitcoin holdings. The second will be to present a framework for how to approach investing in bitcoin miners, with a focus on the publicly-traded sector in particular.

With the end of the month near, we will have another round of public miner production updates for all of May 2022 in a couple weeks. With the latest monthly production releases, April 2022 was yet another month of growing hash rate and held bitcoin, despite a slightly lower production month. The group of public miners were tracking below now make up roughly 18% of total network hash rate using their April numbers of 37.91 EH/s and the latest decline in total network hashrate to 209.91 EH/s.

Bitcoin holdings across miners are now up to 46,132 bitcoin worth over $1.3 billion at a $29,000 price. Thats roughly a 7% monthly increase when including miners with reported data for both March and April. All of this data is pre bitcoins market fall from $40,000 so the next month of data updates will be key to see if top public miners are scaling down their bitcoin holdings or hash rate in response.

Hash rate of public mining companies

Hash rate of public mining companies March 2021 to April 2022

Bitcoin holdings of public mining companies

Monthly bitcoin production of public mining companies

Investing in publicly-traded bitcoin miners carries risks that buying bitcoin itself does not, due to the operational risk as well as the reality that public equities trade at multiples of future expected earnings. During environments where treasury yields rise significantly, this causes earnings multiples to fall, which is why equities as a whole have performed poorly over the course of 2022.

However, the dynamics involved with evaluating publicly-traded bitcoin miners is a bit different. Unlike other commodity producers, bitcoin miners often attempt to retain as much bitcoin on their balance sheet as possible. Relatedly, the future supply issuance of bitcoin is known into the future with near 100% certainty.

With this information, if an investor values these equites in bitcoin terms, significant outperformance against bitcoin itself is achievable if investors allocate during the correct time during the market cycle using a data-driven approach.

An extremely simple framework for investors is:

Hash price bull market = Bitcoin miners outperform bitcoin

Hash price bear market = Bitcoin miners underperform bitcoin

Hash price divides miner revenue by hash rate (daily miner revenue per 1 TH/s, as first coined by the team at Luxor).

While there are certainly other variables involved in valuing these companies, including the operational risks and the competence of the management team to just name a couple, this is a simple framework for investors to internalize and utilize going forward.

To start, lets display hash rate since the start of 2020, which hash price is partially derived from.

Average bitcoin hash rate

Below is the hash price (daily miner revenue per TH/s) in both USD and BTC.

Hash price in USD and BTC terms

Currently, hash price is $0.118, which is above the 2020 low of $0.074 but falling rapidly as hash rate (and subsequently miner difficulty) continue to increase as price falls/consolidates.

Lets take a look at the latest hash price bull and bear cycles and how the publicly-traded miners performed benchmarked not against dollars, but instead bitcoin (as this should be the entire purpose of investing in a mining operation).

Below is the hash price from its 2020 low to its 2021 high and the performance of a few publicly-traded miners ($MARA, $RIOT, $HUT) benchmarked to bitcoin. During the hash price bull market (where price rises faster than hash rate), these three names outperformed bitcoin by 318%, 207%, and 62% respectively.

Bitcoin hash price and public mining stocks priced in bitcoin

Following the hash price top in October at $0.4222 dating all the way to today where hash price is $0.1182, these same names have returned the following against bitcoin:

Hash price and public mining company stocks priced in bitcoin

While bitcoin itself has obviously drawn down significantly since its highs made in the fall of 2021 (down 57%), these publicly-traded miners have declined in value by significantly more with most down over 70%.

Public miner stocks percent drawdown from all-time high

Bitcoin public miner market capitalization

Bitcoin public miner stocks priced in bitcoin

The point of this article is to dissect the cyclicality of the mining industry, and how to think of these securities when navigating the bitcoin market cycle.

Another important fact of the bitcoin market is that hash rate has continued to rise in an exponential manner over the course of its history, which in turn means hash price is in a secular downtrend in both USD and BTC terms.

To circle back to a point made earlier, the entire purpose of investing into a mining operation should be to get a return on investment in bitcoin terms. If you cannot achieve a positive ROI in BTC terms, it was likely not a good investment in the first place.

Thus, because of the diminishing block reward and rising hash rate, hash price in BTC terms is falling in lockstep in programmatic fashion with each subsequent positive difficulty adjustment and halving event.

Bitcoin hash price

In simple terms, this means that it is becoming increasingly more challenging to produce a marginal unit of bitcoin with a unit of hash, which is also why nailing the timing of investing in publicly-traded miners as well as the ASIC rigs themselves can be so lucrative.

While nothing is ever certain, using a data-driven approach, it is possible to achieve significant return on investment in bitcoin terms with bitcoin miners, in both the public and private sectors.

While achieving advantageous levels of relative performance requires a fair share of analysis (and luck) regarding both the bitcoin hash rate, the bitcoin price action, and increasingly the macroeconomic backdrop, we expect the opportunity to once again arise for mining investors to outperform in the not-so-distant future.

While that day may not be here today, our mission is to put forward transparent analysis around the bitcoin ecosystem, with an aim to help individuals and institutions alike make informed decisions regarding their savings/investments.

If you enjoyed the content/analysis in todays free issue, make sure to give this post a like, share with a friend, and consider subscribing to our paid research tier

The Bitcoin Magazine Pro Team

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The Performance Cycle Of Public Bitcoin Miners - Bitcoin Magazine

The Giving Block, a bitcoin and cryptocurrency fundraising platform for nonprofits, announced the Miami Impact Index Fund, allows donors to provide funds to all participating Miami area nonprofits with a single donation, according to a press release sent to Bitcoin Magazine.

When donors provide donations to the fund, each participating nonprofit will receive an equal share of the donation. Donations will also be doubled due to The Giving Block partnering with Shift4, a payment processor, in a program called Caring With Crypto.

The partnership between the two companies will see Shift4 CEO Jared Isaacman personally match any donation up to the first $10 million donated to the program. This effectively doubles any donation made to all of the causes in a single transaction.

The release explains that it is more common for high net-worth individuals to donate property than it is to donate cash, as donating cryptocurrency like bitcoin directly to a 501c3 nonprofit is more tax efficient than a standard cash donation since the IRS classifies cryptocurrency as property.

When a donor donates bitcoin to one of the previously mentioned nonprofits, they receive a tax deduction equal to the fair market value of the bitcoin and they avoid paying the capital gains tax normally incurred by selling bitcoin, meaning that donors would have less access to donatable cash after paying the taxes to receive cash for selling the bitcoin. In short, donors can give more and deduct more from their taxes, which sometimes makes up to a 30% difference, according to the release.

Participants of the fund include but are not limited to: Nicklaus Childrens Health System, NU Deco Ensemble Inc., Third Wave Volunteers Inc, Chapman Partnership, Jackson Health Foundation, Legal Services of Greater Miami, and United Way Miami.

More here:
The Giving Block Launches First-Ever Bitcoin, Crypto Donations Fund For Miami Nonprofits - Bitcoin Magazine

Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

Bitcoin had a very bad day a few weeks ago, its price crashing along with those of other cryptocurrencies, adding a dollop of misery for those who put money into the asset class without snatching it right back out. The crypto market is notoriously volatile, and the trouble this time was the collapse of part of it known as stablecoins. Go figure.

We refer to the recent misery as an added "dollop" because things did, well, stabilize for crypto, which trades around the clock. Even so, the most prominent cryptocurrencies of which bitcoin is the mostest are down by half since November.

So, that'd be a terrible thing to let people muck around with in their retirement accounts, right?

The U.S. Department of Labor thinks so, issuing guidance in March with concerns about the "reliability and accuracy of cryptocurrency valuations" and reminding fiduciaries about their "obligation to ensure the prudence of the options on an ongoing basis." The department isn't necessarily driving a "never crypto" bandwagon, but it's eyeing the reins.

More pointedly, the famed investor Warren Buffett once called cryptocurrency "rat poison squared." More pointedly still, his famed compatriot Charlie Munger recently said bitcoin is "like a venereal disease or something."

And yet.

In April, Fidelity the mostest among the hosts of retirement accounts announced a plan that would put bitcoin on the menu of investment options for 401(k)s. But just bitcoin for now, not the multitude of other cryptocurrencies, and only at levels of no more than 20% of an account, and only for those investors whose employers agree to it.

This isn't necessarily a bad thing, despite any purported resemblance of cryptocurrencies to rodenticides or worse. Even Buffett's and Munger's firm, Berkshire Hathaway, has invested in a bank that focuses on crypto.

Consider this: If you're a buy-and-hold investor of the broad market, which is basically what is recommended for most people for most of their working years, you're also down over the last few months about 20%, as it happens. History suggests that your account will bounce back, but history makes no guarantees about how fast.

Set aside the promises of astronomical long-term gains supporters say are inevitable because of the way some cryptocurrencies, including bitcoin, are designed. While crypto at present can only be described as speculative, there may come a day when it is a reliable alternative to asset classes influenced by central banks. As a nonphysical form of money created using encrypted data (thus the name), the movement of which is managed by decentralized computer networks, not by governments, it could offer investors a way to diversify and potentially steady their accounts.

The Star Tribune Editorial Board wrote last year about signs that crypto was beginning to gain serious traction. The Fidelity plans confirm that. We also wrote that there is room to let the crypto market shake out before deciding how best to regulate it. But that permissiveness can't last forever.

Indeed, there are reasonable questions about Fidelity's plans, and U.S. Sen. Tina Smith of Minnesota is among those raising them. Along with Sen. Elizabeth Warren, D-Mass., Smith wrote a letter to Fidelity asking why the company ignored the Labor Department's guidance; how it plans to deal with various crypto risks, including theft, fraud and the reliability of record-keeping, in addition to volatility; what fees it may charge, and whether it has a conflict of interest as a bitcoin miner. A response is pending.

"My job is not to tell people what to invest in," Smith told an editorial writer. "My job is to make sure that they have accurate and fair information."

That sounds right to us.

In any case, having a bitcoin option in retirement accounts doesn't mean investors have to choose it. They certainly shouldn't if they don't understand it, and even those who think they grasp the concept would be wise to limit their risk to less of their account value than Fidelity would allow. One recommendation we read recently was 1%.

In other words, handle it with care, as with any potential poison.

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Your 401(k) and the bitcoin boogie - Star Tribune

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SEVA announces bitcoin mining partnership to help advance the development of SunPark - WV News

For Thailands market authorities, the rout in Bitcoin has been one of the few tools to cool down the once-unstoppable Jasmine Technology Solution Pcl.

For Thailands market authorities, the rout in Bitcoin has been one of the few tools to cool down the once-unstoppable Jasmine Technology Solution Pcl.

The telecom-turned-crypto company has lost more than a third of its value in the past month, cutting its market capitalization to 260 billion baht ($7.6 billion). That tumble also pared the wealth of its seven biggest individual shareholders, who had enjoyed earlier gains after the firm unveiled a plan in July to expand into Bitcoin mining.

The only frenzy has been from the companys claim to be the pioneer of the Bitcoin-mining business in the country and region, said Jitra Amornthum, an analyst at Finansia Syrus Securities Pcl. That appeal has evaporated with the slide in Bitcoin.

The Securities & Exchange Commission in February urged Jasmine Technologys shareholders to make a careful study and decision of an independent financial advisers call to reject the companys mining plan. The investment was ultimately approved in spite of the recommendation.

Recent downturns in crypto exchanges and currencies including Bitcoin highlight the vulnerability of new fortunes, such as those of Jasmine Technologys front-runners. The company, based just outside Bangkok, rode the digital-asset wave to become the 10th most-valuable company on the Stock Exchange of Thailand, prompting the bourse to halt trading in the stock for a day in April, citing a rally without fundamentals.

The stock has also been hit by concerns about the regulatory environment, with Thailand banning the use of crypto for payments in March.

The biggest paper loss has been to the fortune of Pete Bodharamik, who controls the parent company, broadband-network provider Jasmine International Pcl, founded by his father. Pete holds no official role in either, as he was forced to resign in 2019 after being found to have traded shares of the company, then known as Jasmine Telecom Systems, using non-public information.

His stake has dropped below $1 billion since reaching a peak on April 22. Pete, 49, said he is unfazed by the drop.

JTSs target is to become the largest Bitcoin mining company in Southeast Asia, he said in an email. He said cryptocurrencies and blockchain technology are key to fintech and the metaverse.

Another six shareholders have seen the value of their stock drop by about $1.3 billion in the same period.

The firm, whose net income more than doubled in the first quarter, said in its quarterly report that it aims to boost the proportion of revenue it makes from mining to 80% by late this year from less than 1% in 2021. Crypto-related activities accounted for about 5% of revenue in the first quarter.

Jasime Technology remains under scrutiny. The stock was suspended again on Friday, the second suspension in a week, with the SET citing abnormality in its trading.

The paper losses of Jasmine Technologys top shareholders pale in comparison to hits taken by some digital-asset entrepreneurs elsewhere.

Coinbase Global Inc. founder Brian Armstrong has seen his fortune plummet more than $11 billion to $2.2 billion in six months. Michael Novogratz, CEO of crypto merchant bank Galaxy Digital, also lost $6 billion in his fortune.

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Bitcoin price slump erodes fortunes of would-be miners in Thailand - HT Tech

What happened: A Bitcoin BTC/USD whale just sent $45,870,395 worth of Bitcoin off Coinbase.

The BTC address associated with this transaction has been identified as: 3PQ4M1vitNx3vh9pDFEWjoqwQKLaHQB7xn.

Why it matters: Bitcoin "Whales" (investors who own $10 million or more in BTC) typically send cryptocurrency from exchanges when planning to hold their investments for an extended period of time. Storing large amounts of money on an exchange presents an additional risk of theft, as exchange wallets are the most sought-after target for cryptocurrency hackers.

The best way to secure Bitcoin is through holding it on a hardware wallet, which can't be done through holding digital assets on an exchange. Hardware wallets store one's private keys in an offline device, making it impossible for funds to be hacked via the internet.

According to Glassnode, only 13.23% of the total supply remains liquid across all centralized exchanges.

The removal of BTC from an exchange reduces potential sell side pressure, allowing the price of Bitcoin to increase more easily.

See Also: Best Crypto Apps 2021 and Best Crypto Portfolio Trackers

Price Action: Bitcoin is down -3% in the past 24 hours.

See Also: How To Buy Bitcoin

Public Blockchain data sourced from Whale Alerts Twitter.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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Anonymous Bitcoin Whale Just Moved $45M Worth Of BTC Off Coinbase - Benzinga - Benzinga

Bitcoin (BTC) struggled to recover its latest losses on May 21 after Wall Street trading provided zero respite.

Data from Cointelegraph Markets Pro and TradingViewshowed BTC/USD trading dipping below $28,700 into the weekend, subsequently adding around $500.

Down 4.7% from the previous days $30,700 highs, the pair looked firmly rangebound at the time of writing after United States stocks indexes saw a volatile final trading day of the week.

The S&P 500, managing to reverse after initially falling at the open, nonetheless confirmed bear market tendencies, trading at 20% below its highs from last year.

Another wacky day in the stock market. Dow Jones -500 early in the day, then recovers it all and closes +8, popular Twitter account Blockchain Backers commented about broader U.S. market performance:

As Cointelegraph previouslyreported, various sources had called for Bitcoin to fall once again in a manner similar to last weeks capitulation event.

Continuing the conservative macro outlook, fellow Twitter commentator PlanC argued that external shifts could still bring Bitcoin down significantly from current levels.

If the Crypto market was in a bubble I would say 25k to 27.5k is the Bitcoin bottom, but there is a decent probability that macro factors drag us down to 22-24k. Significant black swan, 15-20k becomes a possibility, part of a tweet on the day read.

Beyond stocks, the U.S. dollar index (DXY) was consolidating after a strong retracement from twenty-year highs.

With ten days left until the end of the month, BTC/USD risked May 2022 being the worst in terms of returns in its history.

Related:Bitcoin must defend these price levels to avoid 'much deeper' fall: Analysis

Data from on-chain analytics resource Coinglass showed month-to-date returns currently totaling -22% for Bitcoin, the largest retreat of any year except 2021s -35%.

2022, the collective figures confirmed, was also the worst-performing first five months of the year for Bitcoin since 2018.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bitcoin ends week on the edge as S&P 500 officially enters bear market - Cointelegraph