The week of January 18 in a nutshell – bitcoin and cryptocurrency news are in constant turmoil. There are times when important information gets lost in the daily flow of messages and you miss important points.
This format is intended to help. We look back at last week’s news in Crypto Weekly to keep you updated on the current cryptocurrency situation.
The local must
For the inevitable of this week, Thomas continues his series on the fair price to mine a bitcoin. After examining Hayes’ model, he tries to apply his calculation of the cost of a bitcoin to an appropriate investment strategy.
Based on the Hayes equation
We saw in the previous article how a miner can determine the cost of making Bitcoin based on his equipment. But what interests me now is the investment, not the actual mining.
We were looking for an iteration of the production cost model that could be used to invest in Bitcoin. After a few hours on Medium, I found some relevant adaptations to this model. Among these we have that of Charles Edwards and that of Vikram Arun.
Arun took Hayes’ model and revised the equation so that he no longer had to worry about a miner’s processing power.
Invest according to the production price
Once all of this data has been collected we can put it together in an Excel spreadsheet to model a range of production costs per bitcoin.
The cost of production serves as the minimum value and the price rarely falls below. The only notable exception is the second half of 2014, when Bitcoin price is about 60% below production costs.
This irregularity can be partly explained by the bursting of a bubble in 2014. This bubble was almost as big as the one in 2017. However, due to the logarithmic scale, its size is less visible on the graph.
For more information on the strategy, see the full article: How Much Does a Bitcoin Get? Looking for the right price.
▶ The Banque de France digital currency is advancing. The BdF regards this test as a success that has enabled investors to buy shares in a money market fund worth more than 2 million euros and then to resell them.
▶ The SEC changes directors, a boon for the crypto ecosystem. Gary Gensler, the former CFTC director who left politics and was newly appointed, has studied the blockchain ecosystem at MIT for the past two years.
▶ A stale block was dismantled in the Bitcoin blockchain, luckily Satoshi had already thought of everything! This situation arises when two mining pools validate a block at the same time. This is rare, but not exceptional!
▶ The Optimism Second Layer network has just started on the Ethereum mainnet. Synthetix is the first dApp to benefit from migrating part of its ecosystem.
▶ Uniswap has opened applications for UNI grants. The UNI grants are a funding program designed to support projects that are developing around Uniswap.
▶ And a new interview on the counter for Sami! He welcomes Sam Bankman-Fried, CEO of the FTX exchange.
📊 The 5 metrics of the week
➤ 643,000 is the number of BTC withdrawn from the central exchanges in 2020. That’s a 21% drop in a year, the first of this magnitude since Bitcoin’s inception.
➤ 90% is the portion of BTC that will be refunded to users injured as a result of the MtGox hack. It now remains to determine which rate will be applied during the repayment …
➤ 80% is the proportion of LINK tokens that are in the hands of only 1% of the addresses in the ChainLink blockchain. However, this data should be absorbed with a grain of salt as it is known to contain wallets associated with the exchange.
➤ $ 3 billion is the amount of ETH that was deposited into the Ethereum 2 custody contract. In total, this corresponds to 2.1 million ETH, spread over more than 65,000 validators.
➤ $ 12 billion is the daily trading volume of Ethereum. Thus, the blockchain with smart contracts exceeds Bitcoin and its daily $ 3 billion.
Ethereum’s daily transaction volume is becoming parabolic.
It now processes $ 12 billion worth of transactions every day – $ 3 billion more than Bitcoin.
Imagine if you weren’t bullish on $ ETH. pic.twitter.com/3NfOz1ruiM
✉️ The tweet of the week
The tweet of the week goes to @Pierrebasss and his comment on the spread of crypto-expert accounts on Twitter. He took the opportunity to make some memories that were always important.
Be careful who you follow and don’t believe in unlimited returns with no possible loss. It does not exist.
Many are promoting it, showing screens of successful trades and positive results.
The reality is very often different.
I wish you a good week in the Journal du Coin! 🙂