BTC’s breakthrough of US $39000 reflects that the market is still bullish

At 15:46 on January 8, golden financial data showed that BTC rose short-term, breaking through the $39,100 mark. Bitcoin continues to break through the approaching $40,000 mark and continues to ignite market sentiment, and many indicators reflect optimistic rising sentiment in the market outlook.

Grayscale lowers the management fee for large-cap funds from 3% to 2.5% to continue to attract investors
As one of the important factors in this round of bull market, institutional driving force continues to expand. Grayscale tweeted today that the management fee of GrayscaleDigitalLargeCapFund will be reduced from 3% to 2.5%. In addition, Grayscale also stated that “as the market’s interest in and demand for digital currencies grows, actions are being taken to deliver more to investors. Great value.

Grayscale’s new CEO Michael Sonnenshein said in a recent interview with Bloomberg that the company will continue to focus on advertising, and its new cryptocurrency commercials will be launched soon. He also mentioned that more and more funds flow into the Grayscale Bitcoin Trust Fund, making Bitcoin more scarce. Sonnenshein also added that not only hedge funds, pension funds and endowment funds are also seeking exposure to Bitcoin. In addition, he claimed that the scale of investment by these institutions is rapidly expanding.

It is worth mentioning that, according to Bloomberg News, Grayscale’s newly appointed CEO Michael Sonnenshein revealed that it will double the number of existing 24 employees and launch six new products in 2021, but he did not disclose related products. (Currently Grayscale owns 10 cryptocurrency funds with an asset management scale of 25 billion U.S. dollars). According to Michael Sonnenshein, Grayscale now holds more than 3% of the total supply of Bitcoin, and the success of Grayscale Bitcoin Trust Fund GBTC has begun to affect the Bitcoin supply in the market.

The mining machine market is heating up, and the difficulty of mining will increase
Since mid-December 2020, the rise in the price of Bitcoin has not only made the supply of the new generation of Bitcoin mining machines in short supply, but also allowed the market for the old generation of mining machines that had been eliminated to recover. The Block article pointed out that the average electricity cost of the Antminer S9 is US$0.05 per kilowatt hour, and the cost of the mining machine is approximately US$16,500. At the current price of Bitcoin and the difficulty of mining, the Antminer S9 can generate approximately US$1.50 in net profit per day, and the payback period only takes two to three months. The rise of Bitcoin caused the old generation mining machine market such as Antminer S9 to recover again.

In addition, the shortage of Bitcoin mining machines is getting worse. Earlier in early December, the expected delivery date of Bitcoin mining machines pre-sold by Bitmain was May 2021. Less than a month later, Bitmain’s mining machines were sold out until August 2021, and the price was greatly increased.

In addition, many listed mining companies are seeking financing and increasing investment in mining machinery. For example, Marathon Patent Group, a listed mining company in North America, said after completing a financing of US$200 million that it would purchase more mining machines.

At the same time, as the price of Bitcoin has risen, the cutting power has continued to increase. According to OKLink data from Oukeyunchain, based on the current network block generation speed and computing power, the difficulty of Bitcoin network mining is expected to increase significantly on January 9; the difficulty is expected to increase by 11% to a record high of 20.68T. The current Bitcoin network mining difficulty is 18.6 T, and the average Bitcoin hash rate in the past week is 151.88 EH/s.

Regarding the outlook for the increase in difficulty, the Golden Finance survey shows that users’ expectations for the continued rise of bitcoin prices account for 74%.


(Golden Financial Survey Data)

The market demand is as high as the heat
Market hotspots remain high. According to market data on January 5, the global search index for the “BTC” keyword on Google reached 100 points for the first time in the past 12 months; at the same time, Baidu searches for the “BTC” keyword nationwide The search index has also reached a record high (14814 points). Market sentiment continues to heat up.

Recently, China Currency (ZB) market research report also pointed out that the next target of Bitcoin price is 45,000 USD, which is optimistic about the market outlook.

In addition, cryptocurrency analyst Willy Woo tweeted that now is the season of large numbers of whales. Although this is a narrative about institutional funds, in my opinion, at this stage, institutions are indeed providing verification for Bitcoin. Now we have seen that family offices serving the wealthy urgently need to obtain investment exposure. There are already many purchase needs of more than $1 million.

However, as market sentiment heats up, we still need to pay attention to changes in volume and investors need to be cautious in chasing the rise.

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