On Monday, Bitcoin surged to its highest price in over a year at $31,385 on the news that Nasdaq has resubmitted BlackRock’s application for a spot Bitcoin ETF.
With this refiling, traditional financial giant BlackRock has joined rivals in naming Coinbase as the market that’ll be monitored in a surveillance-sharing agreement to help guard against market manipulation. This comes after the US securities regulator said last week that filings were “inadequate” without the partner’s name in the surveillance-sharing agreements. Coinbase (COIN) shares rallied about 8% after the news, while MicroStrategy’s stock soared 35%.
The market is hailing BlackRock’s attempt to establish America’s first spot Bitcoin ETF as a hallmark of institutional adoption for crypto as it would make it easier for institutions to get exposure to crypto’s oldest coin. Besides BlackRock, many other heavyweights like Fidelity have filed for spot Bitcoin ETF which has helped rebuild investor confidence in the market.
In response to this, the largest cryptocurrency jumped and, as of writing, is trading at $31,030.
Over the past year, Bitcoin has risen over 61% and is up 86.92% so far in 2023 but is still down 55% from its $69,000 peak during the 2021 bull market. In comparison, Ether is only up 63% year-to-date (YTD), but the cryptocurrency has rallied 86% in the past year to now trade at $1,958. ETH is down almost 60% since its all-time high (ATH).
These gains for the major crypto assets came despite the collapse of cryptocurrency exchange FTX, the blowup of several regional banks, and the recent enforcement actions from the US Securities and Exchange Commission (SEC).
Bitcoin Miners Selling
While the BTC price has been soaring, Bitcoin miners have been selling their coins. Amidst the ongoing price rise, the percentage of miner revenue sent to exchanges hit an ATH in the past few weeks, according to the June monthly newsletter from the digital asset manager Grayscale.
“I think many of these miners learned their lessons in the past two years. Back then, they liquidated coins in the bear market when Bitcoin’s price was low, and they really needed the cash,” Colin Harper, head of content and research at crypto-mining services company Luxor Technologies told Bloomberg. “Some miners are probably just using the recent move in Bitcoin to liquidate mined coins while the price is higher.”
Several public crypto-mining companies sold large amounts of their Bitcoin reserve last summer as well due to a Texas heat wave forcing a drop in production and several crypto industry meltdowns, including Luna. Miners are already running with thin margins and more heat waves in addition to, the upcoming Bitcoin halving in April 2024 is likely to further compress the margins.
A couple of weeks back, Bitcoin miners in Texas halted their operations as electricity prices skyrocketed due to a heat wave. A favored destination for bitcoin miners thanks to its cheap energy and business-friendly regulations, the second-largest US state offers them hefty payouts if they scale back consumption when the Electric Reliability Council of Texas or Ercot requests it.
“Prices were elevated, and the nature of the incentive programs available to all Ercot citizens, not just Bitcoin miners, resulted in most or all large flexible loads being off,” said a spokesperson for the Texas Blockchain Council at the time.
Bitcoin mines shutting off their operations can be seen in the BTC mining difficulty, which is a measure of computing power to mine Bitcoin. It rose to its peak on June 27 at 52.35 T before falling to 50.64 T. The difficulty has continuously increased since mid-January, except for a minor drop in early May.
Altcoins Rally as Bitcoin Holds Steady
While the crypto market is registering greens, with the total market at $1.257 trillion, trading volumes have fallen to their lowest levels since 2020, as per a recent report by crypto market data provider Kaiko.
Despite the ongoing rally in June, spot trade volumes declined significantly in Q2, with Binance registering the strongest drop (nearly 70%) in trading activity after the exchange reintroduced fees for its most liquid BTC pairs. However, Binance wasn’t alone in this, as other popular exchanges, including Kraken, Coinbase, Huobi, and OKX, also saw their volumes decline by over 50% in Q2.
While volume is declining, a survey by Binance Research showed that 47.1% of institutional investors maintained their crypto allocation over the past year, while 35.6% increased their allocation during this period. Only 17.3% decreased their crypto allocation, as per the Institutional Crypto Outlook Survey, which surveyed 208 Binance VIPs and institutional users from March 31 to May 15, 2023.
The survey revealed that the main concerns remain regulatory risk (29.7%), followed by counterparty risk (21.6%), custody of assets (15.7%), and macroeconomic risk (10.6%).
Additionally, Bitcoin remains the most popular choice among institutional investors, and a larger proportion of respondents have turned more positive on BTC as compared to the broader crypto sector (47.3% vs. 33.2%).
This can also be seen in the growing Bitcoin dominance lately. However, as BTC keeps above $30k, altcoins are also catching the bid. So far in 2023, the likes of Pendle (1,730%), Conflux (833%), Radiant (621%), Injective (586%), SingularityNET (470%), Render (435%), TomoChain (316%), Stacks (240%), Floki (216%), and Bitcoin Cash (191%) have emerged as the top gainers.
Another coin that rallied 125.17% YTD is GRT, the native token of the Graph platform that helps developers build applications faster without needing to run their own data server or parse through raw data.
GRT Token Gains Traction
GRT is the 41st largest cryptocurrency, with a market cap of $1.15 billion. At the time of writing, GRT has been exchanging hands at above $0.128, down 4.7% in the past 24 hours against USD. The coin was in the green against BTC and ETH before going red by 5.9% and 4.5%, respectively.
Meanwhile, the crypto asset is managing $108 million in 24-hour trading volume, representing a 58.70% decrease from a day ago.
The token started 2023 on a bullish note as it went from $0.055 at the beginning of the year to $0.206 in early February. Over the next month, GRT price dropped to about $0.1145, which followed an upward trend to $0.173 in mid-April. Ever since then, the price has been on a downtrend that saw GRT’s value falling to $0.0969 in mid-June. This slump followed the news that the SEC was suing the crypto giants Binance and Coinbase exchanges.
As the crypto market rejoiced over the last weeks of June, GRT also started trending upwards over this past weekend, and in the last 48 hours, the token has rallied more than 36% in value. The jump in price saw investors taking profits, and as a result, the realized profits across the network hit a monthly high of 3.35 million GRT.
This saw the price of GRT making a pullback of 10.4% on Tuesday. Besides the profit-taking triggering this move, technically, its Relative Strength Index (RSI) had stepped into the overbought zone above 70, and a breach into this zone usually proceeds with a drawdown. Additionally, the Market Value to Realized Value (MVRV) ratio also entered the “danger zone,” which is synonymous with corrections historically.
For GRT, $0.1251 is an important support level that coincides with the 200-day Exponential Moving Average (EMA).
With the latest price action, GRT’s 1-year price performance is now at a positive 38%, up 145% from its all-time low of $0.0520 on November 22, 2022. Meanwhile, The crypto asset is currently down 95.5% from its $2.84 ATH in Feb. 2021, which came not long after its mainnet launch in December 2020.
Organizing and Accessing Blockchain Data
GRT is the native token of The Graph, which is a decentralized protocol for indexing and querying blockchain data available on the Ethereum and IPFS networks, much like how Google indexes the web.
Through the GraphQL API, users can publish their own open APIs (“subgraphs”) for more efficient blockchain queries. Projects like Uniswap, CoinGecko, Decentraland, Synthetix, and Instadapp have developed their own subgraphs.
The decentralized query protocol for blockchains was launched in 2018, and by June 2020, the project had reached one billion monthly queries. As of now, over 1 trillion lifetime queries have been served by protocol.
The Graph network involves indexers which operate nodes and are required to stake GRT to operate a node as well as provide indexing and query services. In return, they receive GRT tokens through query fees and indexer rewards.
Curators are those who either consume data, develop subgraphs or signal to indexers which APIs should be indexed by the platform. Delegators, on the other hand, do not run their own node but delegate their tokens to Indexers for a portion of the Indexer’s GRT from query fees and indexing rewards. Consumers are the end users who pay query fees to the indexers, curators, and delegators.
The Graph ecosystem was developed by Graph Protocol Incorporation, which was later renamed Edge & Node, and in 2020, The Graph Foundation was announced to support the network development and adoption.
The project raised $5 million in a token sale in 2020 with Coinbase Ventures, Framework Ventures, and Digital Currency Group among its investors. As of July 2023, the project has raised $69.6 million in funding, according to Crunchbase.
The reason for the recent upswing in GRT price, besides the broad green crypto market, is the recent announcement of its migration to the Arbitrum (ARB) network, attributed to its speed and affordability. This move will enable high transaction processing, increasing scalability, and lower transaction costs for The Graph. Moreover, the protocol announced improved query search features and rolled out substreams-powered subgraphs.
Another potential driver of GRT price could be Twitter imposing reading limits on users while citing “extreme levels of data scraping and system manipulation.” This might have brought attention back to The Graph, which allows anyone to build and publish open APIs.
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