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).
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Let’s take a look at this week’s State of the Coin
A look off chain:
Multi-billion dollar data center coming to Texas: This week, the City of Abilene and Taylor County, Texas, announced a partnership with Houston-based infrastructure company Lancium to build a $2.4 billion data center campus. A portion of this data center, which is expected to have an ~$993 million economic impact on Abilene and Taylor County, will be devoted to Bitcoin mining. Lancium co-founder and CEO Michael McNamara said: “We are very proud to be part of the community and build one of our flagship Clean Campuses in Abilene. We chose Abilene for our second Clean Campus because of its ideal location, proximity to abundant wind and solar generation, high-quality workforce and the opportunities to grow in the future.”
TeraWulf buys 15,000 mining rigs from Bitmain: Bitcoin mining company TeraWulf signed a deal to purchase 15,000 new mining rigs from Bitmain Technologies. Although they have yet to file a Form 8-K with the SEC detailing exact terms, the agreement apparently includes monthly delivery of 2,500 machines from July to December of next year. TeraWulf said it expects to have 800 megawatts (MW) of power dedicated to bitcoin mining by 2025, enabling a theoretical output of 23 exahashes per second (EH/s). CEO Paul Prager had this to say: “This purchase from Bitmain, which is TeraWulf’s largest order of the next-generation bitcoin mining machines, signifies our close relationship with Bitmain and our ability to procure significant quantities of miners as we grow our operating capacity.” This purchase announcement comes just days after TeraWulf Inc. began trading publicly on the NASDAQ (ticker: WULF).
Bank of Russia hints again at crypto ban: Although the Central Bank of Russia (CBR) has yet to release their full report on cryptocurrencies, circulating rumors suggest that they will enact legislation making it difficult to buy, sell, or hold digital assets. In response to questions about an outright ban on transfers to crypto exchanges from Russian accounts, Deputy Chairman Vladimir Chistyukhin noted that businesses have the right to purchase and keep cryptocurrency, but not through the country’s financial infrastructure and intermediaries. Commenting on the contents of the upcoming CBR report, Chistyukhin said: “I’ll give you a hint — we don’t see a place for cryptocurrency in the Russian financial market.”
Mandates ban unvaccinated from entering banks: As the newest variant of COVID makes its way around the globe, countries are re-enacting mask and vaccine mandates to participate in public life. In some countries, these mandates apparently bar individuals from entering banks! According to a Reddit poster from Argentina, “Banks in Argentina are not letting unvaccinated people get inside.” While this is just a Reddit post, in September Bloomberg reported that unvaccinated individuals in Nigeria were unable to enter banks. For me, it’s easy to see what the next iteration of these policies would be if left unchallenged: no compliance with a “you-name-it” mandate, no access to your money. This would be particularly easy for central agencies to enact if your money was kept as a central bank digital currency (CBDC) on an electronic wallet - if you don’t comply, they simply block your access to the wallet. What fixes this? Holding bitcoin in cold wallets where you (and you alone) hold your own keys.
Jack, unleashed: Jack recently announced his departure, at least as CEO, from Twitter and has gone full time into Block (formerly Square). His Twitter departure has also given him more time to use the platform he helped create, and boy is he crushing it:
We’re always looking for guest writers!
A look on chain:
Let’s take a look at on-chain data from Glassnode!
Price update: Looks like we’re heading into Christmas with a bit of a bump! As of this writing, in the last week, BTC’s USD price is down 6.8%; in the last month, it is down 11.3%; in the last year, BTC price is up 119.6%.
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.
200 Week Moving Average: I’ve decided to include a quick view of price vs the 200 week moving average. Some use this moving average as a (very) rough floor model.
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.
Terrible Take of the Week
This week’s terrible take comes once again from Elizabeth Warren, US Senator from Massachusetts. One week it’s the Big Turkey industry, the next it’s greedy billionaires like Elon Musk and…[checks notes] Big Grocery. Right.
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)! This week we’re featuring a meme from @levelsio:
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!
Happy Friday everyone - get after it this weekend!
Dan and Brandon
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!
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.