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Bitcoin ‘plankton’ wallets hit record — plus 4 more bullish BTC charts

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More and more people are buying Bitcoin (BTC) since the 2020 coronavirus crash — and it doesn’t matter how rich they are, data shows.

Part of a series of bullish charts circulating this week, statistician Willy Woo highlighted the growth in both high and low-value wallets.

Woo: BTC whales putting money where their mouth is

According to the data, compiled by on-chain monitoring resource Glassnode, Bitcoin whale entities — wallets controlled by a single high-worth individual — keep growing in terms of how much BTC they control.

Whale numbers themselves have already hit all-time highs.

“Many look at the BTC price and doubt it’s a hedge. High net worth individuals and funds certainly consider it to be true and betting on that with real money,” Woo commented. 

“Since this latest round of USD money supply expansion, whales entities have increased their holdings of BTC markedly.”

Bitcoin whale holdings vs. USD supply. Source: Willy Woo/ Twitter

Bitcoin has received considerable attention as a possible safe haven since March, rebounding from 50% losses and maintaining higher levels since. Its fixed, unalterable supply — just one of its fundamental attributes — has formed a particular point of discussion as the U.S. M2 money supply keeps growing, but velocity decreases.

It’s not just whales feeling the need to bet on BTC. Smaller wallets, or “plankton” by comparison, are also showing clear growth.

“Bitcoin is a fast growing country in cyberspace with a population of sovereign individuals who prefer to use BTC for storing wealth and doing transactions,” stock-to-flow price model creator PlanB summarized.

He noted that Bitcoin has approximately 3 million users, making it the 134th largest country in the world, with a “monetary base” — market cap — of roughly $200 billion, ranking 21st globally.

Bitcoin “plankton” holdings

Bitcoin “plankton” holdings. Source: Glassnode/ Twitter

Bitcoin supply stays dormant for longer… and longer

Further signs of accumulation come from existing hodlers. The proportion of the total Bitcoin supply which has not moved in three years or more hit a record 30.9% on Tuesday, Glassnode shows.

Bitcoin supply proportion dormant for 3 years or more

Bitcoin supply proportion dormant for 3 years or more. Source: Glassnode/ Twitter

As Cointelegraph reported earlier, exchanges’ reserves of BTC keep declining as users withdraw coins to wallets. According to a new metric from fellow monitoring resource CryptoQuant, meanwhile, buy pressure remains “intense” for Bitcoin at current price levels around $10,000, roughly four months after the amount of newly mined BTC was expectedly halved in May. 

Even at lower levels than last week after a 15% drop, however, Bitcoin remains in a bullish long-term uptrend, says PlanB.

The cryptocurrency’s 200-week moving average price, which has never gone down, continues to advance by about $200 per month. Never has a monthly close in BTC/USD been below the 200-week benchmark.

Bitcoin price vs. 200-day moving average

Bitcoin price vs. 200-day moving average. Source: PlanB/ Twitter

In a sign of continued commitment from miners, the Bitcoin network hash rate is now estimated to have hit a new record of its own — over 150 exahashes per second (EH/s) after a minor 1.21% downward difficulty adjustment on Sep. 7.

 

Bitcoin network hash rate, raw values

Bitcoin network hash rate, raw values. Source: Blockchain.com





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China’s attempt to kill Bitcoin failed — Here are 3 reasons why

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Bitcoin (BTC) might have suffered its largest coordinated attack over the last couple of months, but in this instance, the investor community did not capitulate. China outright banning mining in most regions after giving BTC miners a two-week notice and this caused the single largest mining difficulty adjustment after the network hash rate dropped 50%.

The market sentiment surrounding Bitcoin was already damaged after Elon Musk announced that Tesla would no longer accept Bitcoin payments due to the environmental impact of the mining process. It remains unknown whether China’s decision was influenced or related to Musk’s remarks, but undoubtedly those events held a negative effect.

A couple of weeks later, on June 16, China blocked cryptocurrency exchanges from web search results. Meanwhile, derivatives exchange Huobi started to restrict leverage trading and blocked new users from China.

Finally, on June 21, the People’s Bank of China (PBoC) instructed banks to shut down the bank accounts of over-the-counter desks and even their social networks accounts were banned. OTC desk essentially act as a fiat gateway in the region so without them it would be difficult to exchange from Bitcoin to stablecoins.

As these events unfolded, some analysts were reluctant to describe the tactics as nothing other than meaningless FUD, but in hindsight, it appears that China launched a very well-planned and executed attack on the Bitcoin network and mining industry.

The short-term impact could be considered a moderate success due to the collapse in Bitcoin price and the rising concerns that a 51% hashrate attack could occur.

Despite the maneuvers, China’s attack ultimately failed and here are the main reasons why. 

The hashrate recovered to 100 million TH/s

After peaking at 186 million TH/s on May 12, the Bitcoin network hash rate, an estimate of the total mining power, started to plunge. The first couple of weeks were due to restrictions to coal-powered areas, estimated at 25% of the mining capacity.

However, as the ban extended to other regions, the indicator bottomed at 85 million TH/s, its lowest level in two years.

Bitcoin estimated hashrate. Source: Blockchain.com

As the data above indicates, the Bitcoin network’s processing power recovered to 100 million TH/s in less than three weeks. Some miners had successfully moved their equipment to Kazakhstan, while others shifted to Canada and the U.S.

Peer-to-peer (p2p) markets carried on

Even though the companies involved in crypto transactions have been banned from the country, individuals continued to act as intermediaries—some of these recorded over 10,000 successful peer-to-peer transactions according to data from the exchange’s own ranking system.

Huobi Global peer-to-peer market advertisement. Source: Huobi

Both Huobi and Binance offer a similar marketplace where users can trade multiple cryptocurrencies including USD Tether (USDT). After converting their fiat to stablecoin, transacting on a regular or derivatives exchange becomes possible.

Asia-based exchanges still dominate spot volume

A complete crackdown on trading from Chinese entities would likely be reflected in the exchanges previously based on the region, like Binance, OKEx, and Huobi. However, looking at the recent volume data, there hadn’t been a meaningful impact.

Weekly spot volume, USD. Source: Cryptorank.io

Take notice of how the three ‘Asia-based’ exchanges remain dominant, while Coinbase, Kraken, and Bitfinex are nowhere near their trading activities.

China’s ban on Bitcoin mining and transactions may have led to some temporary hiccups and a negative impact on BTC price, but the network and price have recovered in a way that is better than many expected.

Currently, there is no way to measure the OTC transactions where larger blocks are traded but it is just a matter of time until these intermediaries find new gateways and payment routes.

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