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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).
Video Version
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A look off chain
Bitcoin Mining Council releases 2021 Q4 report: The Bitcoin Mining Council (BMC) - a voluntary consortium of Bitcoin and Bitcoin mining companies - released results from their Q4 2021 survey on energy consumption in the bitcoin mining industry. The report, which includes data from ~46% of the global mining industry, revealed increases in both sustainable electricity mix and technological efficiency. The BMC estimates that sustainable electricity mix is now at 58.5%, an increase of ~1% from Q3 2021. They also estimate that the global Bitcoin network’s technological efficiency grew by 9% from Q3 2021 to 19.3 petahash per MW in Q4.
Intel makes its move into bitcoin mining: Intel announced this week that they will be unveiling a new, ultra-low voltage bitcoin mining ASIC, called the “Bonanza Mine” chip, in February at the 2022 International Solid-State Circuits Conference. It didn’t take long for Intel to bag their first customer. According to a filing with the SEC, Crypto miner Griid Infrastructure signed a supply agreement with Intel to potentially buy the new ASIC miners.
Milo launches bitcoin-backed mortgage: Miami-based fintech startup Milo introduced a bitcoin-backed mortgage product this week. The product allows investors to leverage their bitcoin to purchase real estate in the United States. To our knowledge, it is unclear how much bitcoin is needed to secure a loan, or the level of over-collateralization needed to balance out bitcoin’s volatility. A number of fintech companies now offer bitcoin-backed loans, including Ledn and BlockFi.
Blockstream Mining Note launches on Bitfinex Securities: Blockstream announced the launch of tranche eight of their Bitcoin Mining Note (BMN) on the Bitfinex Securities trading platform. The BMN provides investors exposure to bitcoin mining via a security token - each token has an associated hashrate and can also be traded in the secondary market (on Liquid). After purchasing a BMN token, bitcoin is mined using that token’s associated hashrate, secured in cold storage, and delivered to the investor at the maturity of a three year term. The current offering includes 25 tokens, each of which equates to 2,000 TH/s of hashrate and costs ~$396,500.
Russia’s Central Bank seeks to ban cryptocurrencies: The Russian Central Bank’s long-awaited report on cryptocurrencies has finally been released. Unsurprisingly, the bank is calling for a complete ban on the use and mining of cryptocurrencies, claiming that these currencies are volatile and often used in illegal activities. Also unsurprisingly, the bank called for continued work on the digital ruble, a central bank digital currency that is currently in the works. Wow, I’m shocked.
Crypto job postings on LinkedIn up 395% in 2021: According to a recent report from LinkedIn, “job postings with titles containing terms like ‘bitcoin,’ ‘ethereum,’ ‘blockchain’ and ‘cryptocurrency’ grew 395% in the U.S. from 2020 to 2021, outpacing the wider tech industry — which saw a 98% increase in listings during the same time period.” The trend is likely to continue in 2022, with many jobs in the crypto space growing. According to cointelegraph.com, “the biggest exchanges in crypto are brimming with job posts; Coinbase has over 250 openings, Kraken over 300, and the world’s most active exchange, Binance, lists more than 600 job posts.”
Throwback: A Chat with @JoeyTweeets and @TheBTCPriceBot on the @CanadianBTCPod
A few weeks ago we sat down with Joey and Len to discuss Bitcoin - check it out and give the Canadian Bitcoin Podcast a sub, follow, etc etc.
Quick word about stacking tax-advantaged sats!
Do you want to HODL BTC in a tax-advantaged retirement account? Check out Choice by Kingdom Trust! Click this LINK to find out more!
A look on chain
Price update: As of this writing, the current price of BTC is $41,185. In the last week, BTC’s USD price is down 3.01%; in the last month, it is down 16.16%; in the last year, BTC price is up 17.38%.
S2F Model Update: Although price currently remains below stock-to-flow model projections, the model has historically performed well immediately prior to halving events. 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 continues to hover close to 1 - in my opinion, this is bullish given the volatility over the last few weeks. Even when we see dramatic drops in price, we don’t see large downward spikes in SOPR - people are not selling at a loss when price drops suddenly.
Hashrate: After some concerns regarding political instability and rolling internet blackouts in Kazakhstan, bitcoin hashrate has reached new all time highs. Combined with the post-China-ban bounce back, this further demonstrates the resiliency of Bitcoin’s mining network.
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)! This week, instead of a funny meme, we’re featuring something cool that we came across from @stacyherbert:
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!
Dan and Brandon
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.