Miners' migration just begins – Crypto weekly update

Published: 03. 06. 2021 · Author: Daniel Mitrovsky

This week, the total market capitalization exceeded 1.42 trillion EUR. Increase at the 7-day interval is 2.90 %. Bitcoin decreased by 1.75 % during the week to a current value of over than 31,800 EUR. Bitcoin dominance is 41.6 %.

Source: Coinmarketcap

Miners in migration

Crypto miners operating in China have begun to leave the country en masse due to regulatory arrangements by the Chinese government against Bitcoin mining. According to the latest news, many miners are still deciding between two migration alternatives – Europe and North America.

The Kazakh company Kaktus media draws attention to the massive migration of miners to Kazakhstan. After all, both parties, miners and also Kazakh government can benefit from this situation

According to data from the Ministry of Digital Development, the crypto-mining industry in Kazakhstan has an annual income in the range between $216 million and $300 million- although this only takes into account the revenues of large-scale industrial miners. With smaller-scale setups becoming more widespread, the real number could be higher. If a massive migration of Chinese miners to Kazakhstan happens, this number could increase significantly.

Actually, Kazakhstan is one of the world’s top five mining countries, with only China, the USA, and Russia boasting more mining revenue. According to data from webpage Statista, Kazakhstan's share of the total Bitcoin hashrate is more than 6 %.

Also, last week, Cryptonews.com reported that the Chinese mining firm BIT Mining has formed a partnership with an unnamed Kazakhstan-based company. The duo will jointly invest in a crypto mining center to be built on Kazakh territory, with BIT Mining footing 80 % of the expenses.

On the other hand, for example, crypto exchange Huobi reportedly plans to orient its mining overseas, mainly because North America has the best security and political environment for mining. Source

Survey: Increased involvement of financial advisors in cryptocurrencies

The latest survey by the Financial Planning Association only confirms the growing interest in cryptocurrencies.

The Financial Planning Association published its latest report, in which it decided to analyse the changing attitudes of financial advisers towards cryptocurrencies. The “2021 Trends in Investing Survey” revealed that more financial advisers than ever are recommending their clients have some crypto in their portfolios.

The survey was conducted in March and received 529 online responses from professional financial advisers who offer clients investment advice and recommendations. It stated that 14 % of financial advisers have already added crypto assets to their clients’ portfolios or are recommending it to them. Even more are planning to do so over the next year.

Also, more than a quarter (26 %) of advisors indicated in the 2021 survey plan to increase their use/recommendation of cryptocurrencies over the next 12 months.

The survey revealed that the figure is up significantly from the previous year, when less than 1% of advisers were recommending exposure to cryptocurrencies.

Furthermore, 49% of finance professionals indicated that, in the last six months, clients have asked them about investing in cryptocurrencies, a figure that has almost trebled from just 17% in 2020. Investors may be drawn to crypto assets as a hedge against inflation, which has been exacerbated during the pandemic and ongoing fiscal stimulus packages. Inflation in the United States is hovering around a 13-year high. Source

Institutions accumulate Ethereum

Institutional investor demand for Ethereum is constantly growing. According to the latest Coinshares report released on Monday, investments in Ethereum currently account for more than a quarter of total cryptocurrency-under management assets.

According to CoinShares’ June 1 Digital Asset Fund Flows Weekly report, the past week saw significant institutional inflows of $74 million (€ 60.73 million) as investors sought to capitalize on the fall out from the recent crash in which many crypto assets lost more than 50% of their value.

More than 63% of institutional inflows were injected into Ether products, or $46.8 million of the total. Ether products now represent 27% of the combined AUM for crypto investment products — the highest share yet.

According to CoinGecko, Ether is currently the second-most traded crypto asset with $35 billion (€28.7 billion) in daily volume, ranking behind only Tether’s $103 billion. Source

On-chain data: End of sales?

After a significant price slump on 19 May, the cryptocurrency market plunged into the consolidation phase. The price of Bitcoin has been fluctuates around €30,000 for a long time with relatively low volatility. But what does the latest on-chain data signal?

The correction in the cryptocurrency market has brought with it various investor´s reactions. From this point of view, we can divide investors into three categories. The first reaction to the correction was the panic sale of short-term investors who sold Bitcoin mainly to minimize losses. Conversely, the second category is long-term investors who continue to hold their Bitcoins. The third category is accumulators who have decided to take advantage of "discounts" in the cryptocurrency market to expand their investment portfolio.

The on-chain metric titled "Bitcoin: Total Supply Held By Long-Term Holders" shows that long-term holders — entities that hold Bitcoin for more than six months — became the largest beneficiaries of the tokens sold by the short-term holders.

The net Bitcoin reserves held by cryptocurrency exchanges have also declined in the past seven days, showing that fewer and fewer traders now want to sell their Bitcoin holdings.

The metric points to a typical trading behavior. Traders only deposit Bitcoin to their exchange wallets when they want to either sell it for fiat or trade it for other digital assets. As a result, the BTC reserves on trading platforms rise. Conversely, a higher degree of BTC withdrawals reflects traders' decision to hold the cryptocurrency.

Furthermore, the data show that the number of so-called "accumulation addresses" is increasing. Accumulation addresses are those addresses that have received at least two Bitcoin transactions, but no Bitcoins have been ever sent from that address. In the last seven days, the number of these accumulation addresses has increased by 7 430 new addresses.

More about on-chain metrics can be found on this link.

Circle Raises $440M

Circle, the USDC builder, has announced that it has raised $440 million (€361 million) in a new funding round. The financing included investments from leading private equity, institutional and strategic investors such as Fidelity Management, FTX and others.

The funding round comes as USDC surges in popularity in the stablecoin sector. Currently, the dollar-backed USDC is seen as the “safer cousin” to the industry-leading USDT.

The stablecoin has picked up momentum in recent weeks with a key integration with Sam Bankman-Fried’s crypto empire. The teams announced this month that the SBF-owned FTX and Blockfolio would become “USDC native.”

Currently, approximately USDC 22 billion is in circulation. Source

Event : Miami Bitcoin Conference

The Bitcoin 2021 conference in Miami has been touted as the largest Bitcoin event in crypto history, with organizers expecting a huge turnout.

Among the conference participants will not be missing:

• Ron Paul - former US congressman
• Michael Saylor – CEO of Microstrategy
• Cynthia Lummis - pro-crypto oriented senator from Wyoming
• Jack Dorsey – Co-Founder of Square
• Nick Szabo – One of the most famous cryptographers in the world

The organizers are expecting more than 50,000 attendees, according to a Fox Business report. Miami has emerged as a major tech hub in recent years, with the Wynwood neighborhood, in particular, evolving into a hub for technology and innovation. The crypto conference was previously held in Los Angeles, but organizers decided to move it because of capacity shortages.

Miami Mayor Francis Suarez is among Bitcoin 2021’s speakers. Suarez has gained fame within the crypto community for his pro-Bitcoin stance and incentive schemes intended to bolster digital asset adoption across the city. Source

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