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If China’s interfering with hash rate and mining pools, then Bitcoin just proved its resilience

Bitcoin

The Week in review

with Jason Deane

Things that hadn’t happened this time last week:

Plans for a Bitcoin City to be built on the back of a volcano based Bitcoin bond in El Salvador

  Estonia’s LHV bank becomes the first in that country to allow Bitcoin purchases

  Latin American E-Commerce Giant Mercado Libre puts Bitcoin on its balance sheet and announces it will begin accepting cryptocurrency

This, of course, is just a small selection of events that demonstrate just how quickly Bitcoin’s adoption rates are accelerating and just one of those subjects is enough to more than fill this morning’s weekly summary.

However, as I shuffled into my office early this morning with the first coffee of the day, I was confronted by two charts that rather took me by surprise and immediately presented me with the direction of today’s commentary – a breaking news item. Even though my Friday morning pieces are usually a leisurely stroll through the week’s events, it seems pertinent to break protocol and write about it.

The two charts were the Bitcoin price and the Bitcoin hashrate charts which were both showing a dramatic real time drop. In fact, at the time of writing, Bitcoin had dropped six per cent in around an hour, while the hashrate had dropped around 16 per cent (from recent average) in the hours immediately preceding. What was happening?

Some quick research and messaging my colleagues in the Bitcoin mining world revealed that this may be linked to further mining related shut downs by the Chinese government. It seems the major pools of viaBTC, Poolin, F2Pool, and BTCcom suddenly experienced connection interruptions. The only thing they all had in common was their DNS was provided by Alibaba Cloud, a Chinese owned operation. All had stopped resolving.

In other words, even though all the miners were almost certainly working as usual, their hash power wasn’t getting through, resulting in an artificially low global hashrate. The markets appear to have immediately overreacted and there may be choppy waters ahead, at least for a while.

Of course, the irony is that this small technical issue, resolved by simply moving to a non-Chinese DNS service, actually demonstrates just how resilient the Bitcoin network is and not how fragile it is. Take out the biggest mining pools and the network still works exactly as intended? That’s impressive.

Try doing that with any other monetary network and we’re straight back to “Sorry mate, cash only, card machine’s down”.

Just sayin’.

Have a great weekend!

Jason

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All feedback on Crypto AM Daily in association with Luno is welcome via email to James.Bowater@cityam.com 🙏🏻

Yesterday’s Crypto AM Daily in association with Luno

price of Bitcoin

In the markets

The Bitcoin economy

*Definitions and insights can be found at https://bytetree.com/insights/

Total crypto market cap

The total capitalisation of the entire cryptocurrency market at time of writing is currently $2,622,587,539,636, up from $2,586,046,553,723.

What Bitcoin did yesterday

We closed yesterday, November 25 2021, at a price of $58,927.89, down from $57,206.37 the day before. The daily high yesterday was $59,367.97 and the daily low was $57,146.69. 

This time last year, the price of Bitcoin closed the day at $17,108.40. In 2019, it closed at $7,531.66. 

Bitcoin market capitalisation

Bitcoin’s market capitalisation at time of writing is $1.087 trillion. To put it into context, the market cap of gold is $11.446 trillion and Tesla is $1.12 trillion. 

Bitcoin market capitalisation

Bitcoin’s market capitalisation at time of writing is $1.087 trillion. To put it into context, the market cap of gold is $11.446 trillion and Tesla is $1.12 trillion. 

Volatility

The price volatility of Bitcoin over the last 30 days is 42.55%.

Fear and Greed Index

Market sentiment today is 47, in Fear.

Bitcoin’s market dominance

Bitcoin’s market dominance today is 42.19. Its lowest ever recorded dominance was 37.09 on January 8 2018.

Relative Strength Index (RSI)

The daily RSI is currently 45.13. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition. 

Convince your Nan: Soundbite of the day

“We are currently conducting extensive research into the asset class… in an era of inflation, it could be a potentially good place to invest.” 

$46.8bn pension fund in Australia looking to invest in Bitcoin

What they said yesterday

It’s about sovereignty…

What are you thankful for?

“Everyone’s doing it”…

Crypto AM: Editor’s picks

New cryptocurrency named ‘JRR Token’ blocked by lawyers for Lord of the Rings creator Tolkien

El Salvador to build Bitcoin city at base of volcano

Bitcoin city

Bitcoin’s long-awaited Taproot upgrade has arrived

Bitcoin's long awaited Taproot upgrade just dropped on main net.
Bitcoin’s long awaited Taproot upgrade just dropped on main net.

NFTs set to fund new cryptocurrency movie

El Salvador begins mining Bitcoin using volcanic energy

El Salvador, the first country in the world to make Bitcoin legal tender, has mined over £200 worth of BTC using volcanic energy (Photo by Sean Gallup/Getty Images)

probed over suspected insider trading

-probed-over-suspected-insider-trading/” target=”_blank” rel=”noopener”>-CEO-960×640.jpeg” alt=”Changpeng Zhao CEO” class=”wp-image-1617112″>

Crypto AM: Features 

Crypto AM: Spotlight

Crypto AM: Founders Series 

Crypto AM: Industry Voices 

Crypto AM: Contributors 

Crypto AM: In Conversation with James Bowater

Crypto AM: Tomorrow’s Money with Gavin S Brown

Crypto AM: Mixing in the Metaverse with Dr Chris Kacher

Crypto AM: Visions of the Future, Past & Present with Alex Lightman 

Crypto AM: Tiptoe through the Crypto with Monty Munford 

Crypto AM: Taking a Byte out of Digital Assets with Jonny Fry

Jonny Fry Taking a Byte out of Digital Assets

Crypto AM: Parliamentary Special 

Part one of two – April 2021

Part two of two – April 2021

Five-part series – March 2021

Day one…

Day two…

Day three…

Day four…

Day five…

Crypto AM: Events

Cautionary Notes

It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City AM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.

All information is correct as of 08:00 BST

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