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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 news from 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 this week’s State of the Coin
A look off chain:
Taproot goes live: On Sunday, at block 709,632, the newest upgrade on the Bitcoin network went live - welcome, Taproot. The upgrade is meant to make transactions - particularly multi-sig transactions - faster, cheaper, and more secure. The upgrade is also meant to facilitate the implementation of smart contracts. Taproot, which received approval in June, is the most significant upgrade to the network since 2017.
Crypto.com purchases naming rights to Staples Center: The Staples Center, home of the Los Angeles Lakers and LA Clippers (NBA), the LA Kings (NHL), and the Women’s National Basketball Association (WNBA) team Los Angeles Sparks, will officially change its name to Crypto.com Arena. AEG and Crypto.com announced their 20-year naming rights deal independently and the arena is scheduled to unveil its new name on Christmas day. Crypto.com also announced official partnerships with both the LA Lakers and the LA Kings. Crypto.com is also a primary partner of the UFC. The advertising budget for this company must be unreal.
More sports stuff in the works: Speaking of sports-related BTC news, Major Australian Baseball League team the Perth Heat announced that they will pay players and staff in bitcoin, accept the cryptocurrency for payments, and hold bitcoin on its balance sheet. Heat CEO Steven Nelkovski commented: “We firmly believe that the mindset that bitcoin imparts on network participants will be felt by our players, coaches, staff, and our loyal fan base and we look forward to setting the bar for how much value a sports organization can bring to a community in the bitcoin age.”
Staying on sports (almost done): The Houston Rockets (NBA) announced a broad partnership with NYDIG, a leading bitcoin solutions provider. While the full extent of the partnership has not been disclosed, NYDIG will apparently serve as the team’s official “bitcoin services” partner. The deal will provide the team with cryptocurrency-related opportunities and give NYDIG exclusive exposure in the team’s social, digital, and arena platforms (including the naming rights of the Toyota Center’s suite levels, which will be called the “Bitcoin Suites by NYDIG”). The full amount of the sponsorship is being paid in bitcoin.
VanEck’s BTC futures ETF starts with a whimper: VanEck, whose spot-based BTC ETF was recently rejected by the SEC, launched their futures fund on Tuesday. The VanEck ETF (stock ticker XBTF) ended its opening day just shy of $60 with a trading volume of ~$4.8M. This opening is relatively weak when compared to the massive October debut of the ProShares Bitcoin Strategy ETF (ticker BITO), which exceeded $1B in trading volume on its first day (the fastest to ever reach $1B). Notably, the VanEck ETF advertises a net expense ratio of 0.65%, lower than the 0.95% charged by both the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF.
We’re always looking for guest writers! If you or someone you know would like to be featured on State of the Coin as a contributor, let us know! You can email us at greencandleit@gmail.com or DM us on Twitter (@Greencandleit)!
A look on chain:
Let’s take a look at on-chain data from Glassnode!
Price update: Bitcoin has crashed to prices not seen since *checks notes* three weeks ago. Some claim that the dip can be attributed to the passing of the new infrastructure bill in the U.S., which includes unclear language regarding what might be considered a “broker” in the crypto space. In my opinion, high 60s didn't last long enough for support to develop and a drop from low 60s to high 50s is within normal price volatility. Stay calm and buy the dip (as always, this is not financial advice). As of this writing, in the last week, BTC’s USD price is down 13.4%; in the last month, it is down 12.7%; in the last year, BTC price is up 215.3%.
S2F Model Update: Price currently remains well below the stock-to-flow model. In fact, the model has price on November 11th at $107,416 USD, leaving us roughly $50k away from predicted price (sadly, with this week’s dip, we reversed our multi-week trend of tracking closer and closer to model prediction). Although we remain below model predictions, the model tends to perform well immediately prior to halving events (see red circles below). The model has a predicted USD value of $121k in March of 2024, when the next halving event is expected to occur. Remember, BTC is a long term investment, not a “get rich quick” vehicle. To learn more about the S2F model, check out this article by PlanB.
SOPR: The Spent Output Profit Ratio (SOPR) is computed by dividing the realized value (in USD) by the value at creation (USD) of a spent output. Or more 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). SOPR dipped slightly negative this week - time will tell whether this is a “bounce off zero” reset or if traders will continue to sell at losses. In my opinion, our time over 60k has been so short lived that if we remain in the high 50k range, I’m not sure how negative SOPR could really go.
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)! Shoutout to @DenizSaaat for this week’s meme of the week - the 58k gang never misses. Give Deniz a follow!
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, Brandon Keys, and occasionally a guest writer; 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. None of the authors of this article are financial advisors. We encourage all readers to do further research and do your own due diligence before making any investments.