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In our Friday articles, we take a deep dive into the current state of Bitcoin. We previously published a series debunking the FUD surrounding Bitcoin - you can find those links at the bottom of this article. Every Friday we will continue to publish brief State of the Coin newsletters to keep subscribers up to date on BTC with both on-chain analytics and off-chain momentum of the Bitcoin industry. For full disclosure, Brandon and Daniel are strong believers in Bitcoin and both have allocated portions of their portfolios to BTC (HODL baby).
Let’s take a look at the State of the Coin
A look off chain:
Google reverses course, will allow crypto ads: In 2018, Google banned advertising for “cryptocurrencies and related content.” Google is now reversing this decision and will allow crypto advertising - at least somewhat...advertisers are still unable to promote the purchase, sale, or trade of cryptocurrencies or related products. Although full advertising is still not permitted, we think this is at least a step in the right direction.
Fidelity joins Vanguard group in purchasing shares of Marathon Digital Holdings: Fidelity Investments - one of the largest asset mangers in the world - purchased a 7.4% stake in Marathon Digital Holdings, a Bitcoin mining company. Fidelity joins other major asset managers, including the Vanguard Group, to increase their crypto exposure via mining companies.
Major institutional skeptics continue their capitulation: JPMorgan, whose CEO Jamie Dimon is amongst the biggest Wall Street BTC skeptics, began placing customers into a new Bitcoin fund. Add this to the steadily growing signal that shows institutional buy-in on BTC. Importantly, the bank is capitulating due to customer demand - not because the suits within the bank are looking to make good on the product. Indeed, in May Dimon reiterated his distaste for cryptocurrency, but conceded that “clients are interested, and I don’t tell clients what to do.”
Are BTC ETFs finally coming?: Thus far, regulators have dragged their feet on giving the green light for a BTC-based ETF. However, U.S. SEC Chair Gary Gensler recently signaled that regulators may be more open to a futures-based Bitcoin ETF rather than one based on the cryptocurrency itself. ProShares and Invesco both jumped at this news and filed for ETFs (ProShares Bitcoin Strategy ETF and Invesco Bitcoin Strategy ETF). These are likely the first of many more to come.
A look on chain:
We’re continuing to get our feet wet with Glassnode on chain data!
Price update: After the breakout price jump on July 25, we’ve hovered between $38k-41k for roughly two weeks. Prior to the breakout, price had been crawling sideways between $29k-33k for weeks. August 2nd, which marked the exact average number of days to a post-halving high (448 days) based on the first two cycles, came and went without much fanfare.
SOPR: The Spent Output Profit Ratio (SOPR) is computed by dividing the realized value (in USD) divided by the value at creation (USD) of a spent output. Or simply: price sold / price paid. Values greater than 1 indicate that coins are being sold for profit (typically bullish) and values less than 1 indicate coins are being sold at a loss (typically bearish). This week, SOPR bottomed back down to 1 and bounced back to positive. The high spike in SOPR was likely young holders selling for profit following the recent price jump. However, the bounce upward following the reset at 1 is a bullish sign.
Difficulty ribbon compression: Compression and inversion of difficulty ribbons have historically indicated upward price movements. Ribbon compression remains extremely bullish.
S2F Model Update: S2F model appears to be correcting back to model predictions, but time will tell whether the model continues to offer accurate predictions. Even Willy Woo recently stated that modeling price behavior will become more difficult as the network grows.
In general, off-chain news continues to support institutional buy-in and on-chain data appear bullish. It’s an exciting time for the Bitcoin community!
BTC Meme of the Week! What would the BTC community do without memes? Every week on State of the Coin, we feature our favorite meme of the previous week. If you create or see a meme that you like and want us to consider featuring it, tag us on Twitter or instagram (both @Greencandleit)!
New to Bitcoin and looking to learn more? Check out our introductory series, where we walk through common misconceptions about the world’s leading cryptocurrency!
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Happy Friday everyone - get after it this weekend!
Brandon and Dan
Disclosure: The authors of this writing hold positions in cryptocurrency mentioned in this article. That cryptocurrency is Bitcoin. The article was written by Daniel Kuhman and Brandon Keys, and it expresses the author's own opinions. They are not receiving compensation for it. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock or cryptocurrency. Brandon and Daniel are not financial advisors. We encourage all readers to do further research and do your own due diligence before making any investments.