Last week was harsh for crypto, as all top 5 cryptocurrencies on the market experienced big losses that ranged from 10% to over 30%. The biggest development of the week came on Thursday, when the President of the United States, Donald Trump, tweeted about Bitcoin and cryptocurrencies for the first time ever, though his tweets were very critical. This led to people believing that Trump’s remarks affected market prices as all of the top cryptocurrencies had their highest prices during the first days of the week and then went on to fall to their lowest on Sunday, a couple of days after the tweet. Other important developments include the Bitpoint hack, yet another all-time high for Bitcoin mining difficulty, and more regulation news from the U.S., China, and Iran.
Here’s what you need to know about last week’s happenings in crypto.
Bitcoin (BTC) opened on Monday at $11,446.60 and its highest price of the week came two days later on Wednesday at $13,129.53, growing 4.4% that day to reach that price. Sunday saw the lowest price of the week at $10,234.58, 22% lower than BTC’s high on Monday. By the end of the day, the original cryptocurrency had barely recovered, closing the week at $10,256.06, and losing 10.4% of its value during the week. Bitcoin’s market capitalization shrank 16.5% throughout the week, closing at $182.7B on Sunday.
Bitcoin 7-day price and market cap chart. Source: COIN360
Ethereum (ETH) started the week at $305.73 and on Tuesday reached its highest price of the week at $318.22. Like BTC, Ethereum hit its low on Sunday, at $227.27, 28.6% lower than Tuesday’s high. Sunday closed with ETH at $227.58, with a 25.6% overall loss for the week. The market capitalization for Ethereum closed at $24.3B on Sunday, losing 27.3% of its value throughout the week.
Ethereum 7-day price and market cap chart. Source: COIN360
Ripple (XRP) opened at $0.397261 on Monday and hit its week high on Tuesday, at $0.406549. Throughout the rest of the week, the price of XRP decreased until it reached its low on Sunday at $0.305326, almost 25% lower than Tuesday’s high. By Sunday’s closing time, XRP was at $0.306426, suffering a 22.3% loss for the week. XRP’s market capitalization shred 23.7% of its value throughout the week, closing on Sunday at $13B.
Ripple 7-day price and market cap chart. Source: COIN360
Litecoin (LTC) started at $120.28 on Monday, and on that same day, the highest price of the week occurred at $125.08. LTC’s low of the week occurred on Sunday at $88.81, 29% lower than its high on Monday. Sunday ended with Litecoin at $89.77 and a 25.4% loss for the week. The market capitalization for Litecoin experienced a 27.1% loss, closing the week at $5.6B.
Litecoin 7-day price and market cap chart. Source: COIN360
Bitcoin Cash (BCH) opened at 412.12 on Monday and on Tuesday reached its high of the week at $428.36. From there BCH took a 34.4% plunge to hit its low for the week on Sunday at $281.20. BCH closed at $282.84 on Sunday, experiencing a 31.4% loss for the week. BCH’s market capitalization experienced great losses as well, shredding 32.4% of its value and closing at $5.1B on Sunday.
Bitcoin Cash 7-day price and market cap chart. Source: COIN360
Jul. 11 marked the very first time that the president of the United States tweeted about cryptocurrencies. In a thread of tweets, Trump listed some of the reasons why he doesn’t consider himself a fan of Bitcoin or other cryptocurrencies to his 61M followers, before saying that the only “real” currency in the US is the US dollar. His remarks elicited the response from many members of the crypto industry, including Brian Armstrong, Coinbase’s CEO, who stated that this was an achievement for the industry, quoting Gandhi to reflect on how far the industry has come: "First they ignore you, then they laugh at you, then they fight you, then you win”.
Many thanked Trump for the free publicity and the increased interest towards Bitcoin that his tweets entailed, coining the phrase “Trump pump”. Despite this, Cointelegraph reports that the price of BTC remained mostly unaffected, pointing towards a “newfound resilience to external criticism”, which would mean that Trump’s remarks have little to do with last week’s price drops.
On Jul. 12, Japan-based crypto exchange Bitpoint suspended all services after being hacked and losing $32M from its hot wallets. In an official announcement, the exchange mentioned that among the cryptocurrencies involved were BTC, XRP and LTC, and that $23M of the total amount stolen belonged to customers. This hack makes Bitpoint the 8th exchange to be attacked on a large-scale this year. The exchange is also one of several domestic crypto exchanges to have received a business improvement order from the FSA, Japan’s financial regulator.
Despite reaching an all-time high just a couple of weeks ago, data from BTC.com revealed that Jul. 9 saw an impressive 14% spike in difficulty, which drove mining difficulty to a new all-time high of 9.06T, with an average hash rate of 64.85 EH/s. This is similar to what happened in July of 2018, when difficulty increased by almost 15%, though back it was only at 5.95T with a hash rate of 42.59 EH/s. According to the data, a new all-time high is to be expected soon, with difficulty purportedly reaching 9.9T.
According to a Jul. 12 report released by Binance Research, merged mining could actually increase the rewards for miners after the upcoming block reward halving, scheduled for Aug. 5. Merged mining, a system where the work done for a parent blockchain can also be used for its auxiliary blockchain, is most commonly known thanks to Dogecoin, which adopted merged mining with Litecoin in 2014. As per the report, smaller chains can adopt merged mining in order to support higher levels of network security and reduce the need for a separate mining set. However, the report also notes that potential drawbacks to merged mining include fewer incentives for a smaller chain due to an increase in operation costs, a decrease in market price for the smaller project’s coin, dependency on the parent blockchain, and more attack vectors for hackers.
The U.S. Senate committee of commerce, science and transportation approved the Blockchain Promotion Act on July 9. The bill will bring the U.S. closer to having a blockchain definition on the federal level while setting up a blockchain working group made up of representatives of federal agencies (that could potentially use blockchain) and non-governmental stakeholders (including information and communication technology manufacturers, suppliers, software and service providers, among others) within the Department of Commerce, which will have to submit a report including a recommended definition of blockchain to Congress after one year of the group’s formation, alongside potential applications, possible uses by the federal agencies and more.
As per a Jul. 8 South China Morning Post report, the development of Facebook’s Libra has forced China’s central bank to step up their research into creating their own cryptocurrency. According to a bank official, Libra could pose a challenge to Chinese cross-border payments, monetary policy, and financial sovereignty. Wang Xin, director of the PBOC’s research bureau, stated that the PBOC has received approval from the State Council and has been working with market institutions on creating a central bank digital currency. Additionally, an open research initiative on digital finance was also created, benefitting from resources from top educational institutions Peking University, Renmin University, Zhejiang University, and Shanghai Jiao Tong University.
A Jul. 12 official blog post has announced that Litecoin has become the official cryptocurrency of an NFL team. According to the blog post, Litecoin will benefit through in-game branding, advertising opportunities, and inclusion in the team’s digital content. The Dolphins, on the other hand, will reportedly give their attendance the ability to pay with LTC and BTC tickets for their upcoming 50/50 raffle. Charlie Lee, Litecoin’s creator, said that “we see this as a powerful way to raise awareness and educate people about Litecoin and cryptocurrencies on a tremendous scale.”
Abdol Hemmati, Central Bank of Iran’s governor, announced on July 10 that the country’s authorities are planning to authorize cryptocurrency mining. This after the Iranian government approved parts of an executive law including the authorization of Bitcoin mining in the country. The aforementioned law will demand that crypto mining abide by the price of electricity used for export, which ranges from 40-100% higher than the subsidized internal energy network, as Hemmati stated that the cryptocurrency mining in the country should contribute to its economy. Last month, the Iranian government confiscated over 1,000 units of Bitcoin mining hardware from 2 mining operations following an abnormal 7% surge in electricity consumption.
On Jul. 11 Binance launched its margin trading platform. The exchange launched a specialized Margin Wallet for the platform, with the option to move funds to the primary Binance Wallet without any cost. The new feature, announced back in May, is part of Binance’s 2.0 platform release and customers can choose from 6 different cryptocurrencies to use, including Bitcoin, Ether, and Binance’s native coin BNB.
Following Bitfinex and Tether’s motion to dismiss their case due to lack of jurisdiction (Bitfinex and Tether’s dismissal motion is based on not operating their business in NYC) filed in May, the Office of the New York Attorney General (OAG) has submitted close to 30 documents that allegedly prove the defendants had operated within the city, in order to stop the motion from being granted. Assistant Attorney General Brian Whitehurst stated that in Jan. 2019 the exchange had “opened a trading account with a New York-based virtual currency trading firm” and that the defendants failed to submit the documents regarding the account, directly against the OAG’s orders. Whitehurst also stated in the “Memorandum of Law in Opposition to Respondents’ Motion to Dismiss and For an Immediate Stay” that there is proof enough that the defendants have operated in NYC.
According to a presentation reportedly given to agents in its Criminal Investigation Division, the IRS is planning to use interviews, different methods of electronic surveillance and Grand Jury subpoenas in order to identify criminal tax cases that involve cryptocurrency. The subpoenas will purportedly be served to tech giants Apple, Google, and Microsoft in order to obtain their users’ download history to look for any cryptocurrency application. Additionally, subpoenas will be served to obtain bank, credit card, and Paypal records to look for activity related to crypto. Most notably, however, is the fact that the presentation mentions that these measures should be done without properly notifying users, as it could be detrimental to the investigations.
Grayscale Investments announced on Jul. 8 the resumption of private placement of Grayscale Bitcoin Trust (GBTC) shares, an instrument designed to let investors put money into BTC through a traditional investment structure, with each share corresponding to 0.00097876 BTC. Additionally, a Jul. 9 report indicates that GBTC is nearly up 300% since the start of the year, outperforming all other indexes. This is similar to what happened during the 2017 bull run, where GBTC had an appreciation of 1,391%.
A Jul. 8 press release from BitTorrent announced the launch of BitTorrent Speed software for download optimization that will connect and reward users with BitTorrent tokens (BTT) in the form of tokenized incentives. The press release states that the software will provide faster download speeds, though speed will still be dependant on the number of people using the same file and the number of people bidding with tokens. According to TRON founder and BitTorrent CEO Justin Sun, the launch of BitTorrent Speed marks the completion of early integration work between TRON and BitTorrent.
At first glance, the correlation between Donald Trump’s negative comments about cryptocurrencies and marketwide price fall is evident. However, it is also evident that Trump’s comments have likely done more good than bad in the long run, as many of Trump’s almost 62M followers have probably never heard of Bitcoin or other cryptocurrencies, or have done so less than a handful of times. It is uncertain why the prices have fallen the way they did, but price correction from this last bull run is a possibility. Still, despite the harsh price drops, the main takeaway from last week’s developments is that Bitcoin is stronger than ever, given that even the President of the United States is talking about it, something that wouldn’t have been considered possible a couple of years ago.
We wish you a great week,
The COIN360 Editorial Team