Bitcoin mining profitability is on the rise again. View in browser

“Why would anyone trust nerd money vs. central bank money? Nerds brought you the Internet. Banks brought you the Great Depression.” ~  Andreas M. Antonopoulos

Market State

Bitcoin was testing the level of $13000 last week, but unfortunately started to fall towards the weekend. If the price continues to drop, Bitcoin could see the $8800 level again. Bitcoin dominance is now over 65% despite the declining price. This means less funds are in altcoins. Major altcoins have seen double digit fall as Bitcoin fell to $10600 level. Ether dropped 30% to $224 since last week. While Ripple and Litecoin fell 25% and 31% respectively.

There is no actual indication why prices have dropped. However, there are several factors that could have affected the price of Bitcoin. The first one is President Trump’s negative comment on Bitcoin and cryptocurrencies. Trump’s sudden criticism on Bitcoin has increased Google search activity and even after his criticism, the price of Bitcoin and other cryptocurrencies went up for at least 15 hours. The other factor that might have caused the price to go down is the recent attack on a Japanese crypto exchange during which $32 million worth of cryptocurrency was stolen. Usually the cryptocurrency prices negatively react to exchange hacks. The most likely factor that has actually caused the price to fall is the negative stance that governments have on Facebook’s Libra coin project. Banks and governments are trying to hold back Facebook to issue its Libra coin. This might have been causing the overall negative price movement in the crypto space. When Facebook announced its Libra coin the price of cryptocurrencies went up as the community thought Libra would increase cryptocurrency adoption and awareness. However the negative view from the governments around the world might have affected negatively the cryptocurrency price.

Check the latest Bitcoin Price
Quiz of the week

The computers that find new blocks are called

  1. miners
  2. verifiers
  3. servers

Scroll down to see the answer at the end of the newsletter.

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Top stories of the week
Governments Around the World Are Getting Concerned with Facebook's Libra Coin

A growing number of governments have responded to Facebook’s cryptocurrency plans including Japan, China, France, Russia and India. For example, the People’s Bank of China (PBOC)  is paying “high attention” to Libra. According to one of the banks directors “Facebook’s plans to create its own cryptocurrency have forced China’s central bank into stepping up research into creating its own digital currency as Libra could potentially pose a challenge to Chinese cross-border payments, monetary policy and even financial sovereignty.”

The US have been actively taking initiatives in response to Facebook’s Libra coin announcement. The US Senate Banking Committee is holding a hearing on Libra on the 16th of July, followed by a House Financial Services Committee hearing the next day. A drafted bill entitled “Keep Big Tech out of Finance” has appeared online ahead of Facebook’s hearing, Reuters reported about it firstly. The bill aims to prevent big tech companies from becoming financial institutions and launching digital assets. According to the draft, any tech company that has annual revenue of more than $25 billion is prohibited from issuing their own digital currency. Companies that violate the bill shall be subject to a daily fine of $1 million.

President Trump Comments on Cryptocurrencies for the First Time

Last week US President Donald Trump tweeted about Bitcoin and Facebook's Libra coin. He declared that he is not a fan of highly volatile cryptocurrencies “based on thin air” that facilitate unlawful behavior (drug trade for example) and he prefers a dependable and reliable currency called the US Dollar. Trump also attacked  Facebook’s Libra coin, claiming it will have little standing or dependability and that Facebook would need to seek a banking charter if it wanted to move forward. Though Trump took critical positions of cryptocurrencies his acknowledgement is actually good for the crypto industry. Trump’s tweets reach millions of people, more importantly, they reach press, business leaders, and other influential individuals. According to Fundstrat Global Advisors Head of Research Tom Lee, the president’s acknowledgement will bring greater awareness of crypto and could push prices up to $40,000.

Wells Fargo Won’t Allow Customers To Buy Bitcoin

Wells Fargo, America’s third largest bank founded in 1852, recently stated that it does not allow its customers to purchase Bitcoin with their own funds. Whereas Wells Fargo’s vision states “Customers can be better served when they have a relationship with a trusted provider that knows them well, provides reliable guidance, and can serve their full range of financial needs.” In June of 2018, Wells Fargo banned clients from making cryptocurrency purchases with their credit cards. Crypto enthusiasts found it outrageous that Wells Fargo is preventing their customers from spending their own money. Some people have even left the bank as it is not serving their financial needs. Similarly JPMorgan CEO Jamie Dimon bashed Bitcoin for many years, and allegedly now he regrets calling Bitcoin a fraud. Now JPMorgan is creating its own digital currency for its clients.

European Central Bank Won’t Add Bitcoin to Its Reserves

In a recent Q&A session hosted on Twitter, Phillip R. Lane, Chief Economist of the European Central Bank (ECB), said that “Bitcoin is not a currency, it rather is an asset and it is very volatile” when asked whether ECB planned to add Bitcoin to its reserves. Immediately after its response crypto enthusiasts pointed out that the Euro has depreciated significantly in the past two decades. One Twitter user criticized that €100 worth of goods in 1999 would be equivalent to €139.27 today. The ECB doesn’t seem like to be holding Bitcoin anytime soon. However this could change in the coming years as the awareness of Bitcoin grows.

Bitcoin Mining Profitability Is On the Rise Again

According to Argo Blockchain, a UK based mining company Bitcoin mining-profitability is on the rise again as the market recovers. Argo Blockchain is the first crypto related company to be listed on the London Stock Exchange. In April the company announced that it was shutting down its mining services and terminating all customer contracts due to the long bear market and would only focus on mining for itself after the 1st of April. Now that the price of Bitcoin is back over $10000 the mining companies are seeing substantial profit. In June 2019 Argo mined 161 BTC. The company said its profits have surpassed its projected second-quarter earnings and have increased by 24% since June 2019.

Japanese Exchange BitPoint Hacked Again

Japanese cryptocurrency exchange BitPoint has been hacked, losing about $32 million in cryptocurrencies. The funds were stolen from a hot wallet that contained five cryptocurrencies that the exchange offered including Bitcoin, Bitcoin Cash, Ether, Litecoin and Ripple. 70% of the stolen funds belonged to customers. BitPoint said it hasn’t detected any missing funds from its cold wallets. This was the sixth attack that BitPoint suffered. The total amount stolen from cryptocurrency exchanges to date now stands at nearly $1.39 billion. Japan’s Financial Services Agency (FSA) ordered cryptocurrency exchanges to improve internal controls following the $400 million hack of Coincheck exchange in 2018. Starting from April 2020, Japanese exchanges must keep users' fund in cold wallets. If hot wallets are used, the exchange must keep an equivalent amount of assets as backup. Remixpoint (which runs the Bitpoint exchange) said it would compensate customers for the losses. Shares of Remixpoint plunged almost 20% after the announcement.

Tweet of the week
Meme of the week
Quiz answer

The computers that find new blocks are called

The correct answer is “A”, miners.

Thank you for reading :) 

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