OnChain Reaction

Bitcoin Drop in Activity with ByteTree

Host

(00:17) James Bennett, CEO of ByteTree, returned to discuss the story on and off the chain over the past week. It has been a quiet period, with bitcoin price volatility over a 30-day period and annualized hovering at an almost all-time low at around 30%. Prior to the dip in September, these are unprecedented levels of low volatility for bitcoin at a time when there have been major industry developments, noted James.

BitMEX is being reprimanded by the CFTC, the FCA is banning crypto derivatives in the UK from 2021, and John McAfee was arrested in Spain. In 2017, any one of these events would have seen at least a 20% drop in the value of bitcoin. Instead, the market is basically experiencing its lowest volatility ever.

(1:15) “It’s a fascinating time. And it really indicates there’s a more mature investor presence now here in this market that isn’t willing to sell at the first sign of bad news. They’re invested in the market, they’re invested in the philosophy and they’re invested in the long-term future of this decentralized distributed network,” said James.

(00:17) James Bennett, CEO of ByteTree, returned to discuss the story on and off the chain over the past week. It has been a quiet period, with bitcoin price volatility over a 30-day period and annualized hovering at an almost all-time low at around 30%. Prior to the dip in September, these are unprecedented levels of low volatility for bitcoin at a time when there have been major industry developments, noted James.

BitMEX is being reprimanded by the CFTC, the FCA is banning crypto derivatives in the UK from 2021, and John McAfee was arrested in Spain. In 2017, any one of these events would have seen at least a 20% drop in the value of bitcoin. Instead, the market is basically experiencing its lowest volatility ever.

(1:15) “It’s a fascinating time. And it really indicates there’s a more mature investor presence now here in this market that isn’t willing to sell at the first sign of bad news. They’re invested in the market, they’re invested in the philosophy and they’re invested in the long-term future of this decentralized distributed network,” said James.

Miner Activity

(1:40) Miner difficulty hit another all-time high this month, which is very encouraging to see as the total compute power increases on the network. But miners have slightly struggled to keep up this time around.

(2:19) When you look at the different peaks and troughs, you can see the peak leads to a drop in difficulty and the trough leads to a rise in difficulty once again. And then you get to where we are now. There’s a pretty steady state. We are a little bit above the 10-minute per block threshold. So we can expect the difficulty to drop in the next period, said James.

Transaction Value

(2:46) Transaction value is the amount of value that is settled on the network in USD. It’s a similar story to volatility — we’re seeing a very steady flow of onchain activity. And if anything it’s slightly trending downward. Price is steady, and onchain transaction value is steady if not slightly trending down.

Miners

(3:19) Miners have been sending out less of those coins that they’ve newly minted. Right now we’ve seen MRI drop to just a bit below 100%, and we’ll keep an eye on this to see how it plays out. But miners a little bit unsure about the next move.

(3:59) “So across the board here we can see that volatility has dropped and…velocity has dropped as well. Price is holding pretty steady and overall the network is looking healthy. But we’re expecting a big move in the next couple of weeks. Which way? You’ll just have to follow ByteTree in order to find out,” said James.

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