Bitcoin failed to hold onto the $9,000 level it reclaimed late Sunday and ended the first trading session of the week around $8,700. Even the downward adjustment in mining difficulty was unable to support sentiment. The 7% adjustment was the largest since 2018 and alongside that, the daily hash rate bounced back above 100 quintillion hashes per second. However, daily measurements can be very erratic and it will take several days to get a better understanding of how crypto mining players have reacted to the latest adjustment.
It is worth highlighting that even though the spot market remains soft, the contango curve is yet to budge and leverage plays are back in fashion, as evidenced by the pick up in the total amount of Ethereum locked in the Maker ecosystem. The credit ecosystem now has over 1.7% of the entire Ethereum supply locked, its highest level since early summer and according to DeFi Pulse, almost 2.5M ETH is locked across various DeFi dapps.
As a reminder, team lead at the Ethereum (ETH) Foundation Péter Szilágyi has confirmed Dec. 4 as the expected date for the network’s forthcoming Istanbul hard fork, to be conducted at block 9069000. He provided Geth mainnet node operators with a link to a new maintenance release designed to begin the hard fork’s initialization. Geth is the name given to one of the two most popular clients used to operate nodes on the Ethereum network — the other being Parity. As the network continues to transition away from Proof of Work (PoW) to Proof of Stake (PoS), some miners will look elsewhere to make up lost revenue.
Ethereum Classic has been vocal in its ambition to attract miners, especially given the planned upgrades that focus on interoperability between Ethereum and Ethereum Classic. Miners of alts are known for their anti-hodl behavior, in particular, there is anecdotal evidence that altcoin miners tend to swap their rewards to Bitcoin (BTC). However, the interest in alts has picked up amid the suppressed Bitcoin volatility and the fact that although liquidity levels are much lower for alts, there are plenty of opportunities to capture alpha by utilizing event-driven strategies, together with relative value plays.
In terms of other news, the Monetary Authority of Singapore (MAS) has completed development of a blockchain-based cross border payments system that can support a range of currencies. The so-called Project Ubin prototype platform was developed in partnership with JPMorgan and Singapore government-owned investment firm Temasek. It’s now being tested to see if it can deliver on cost cuts and its ability to connect with different commercial blockchain applications.
Elsewhere, a Canadian bank, which banned its clients from buying Bitcoin, could now become the first in the country to launch a cryptocurrency exchange. As innovation economy news outlet The Logic reported on Nov. 11, the Royal Bank of Canada (RBC) is now rumored to be considering the plans. According to The Logic, the bank is entertaining the possibility for the exchange to function both for investments and allowing clients to make purchases online and in brick-and-mortar stores.
Finally, EOS has been clogged up by a giant airdrop for a token called EIDOS. The smart contract went live on Oct. 31 and is designed to encourage maximum transactions. The size doesn’t matter. This has caused EOS to go into congestion mode, which Coinbase described on its blog as limiting “the number of transactions a user can broadcast to their pro-rata share of total staked CPU resources on the EOS network.”
Thank you for reading,
The BeQuant’s Analytics team