Bitfinex Alpha | Bitcoin Mining Difficulty and Hash Rate Soars Amid Quiet Market - Bitfinex blog
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Bitfinex Alpha | Bitcoin Mining Difficulty and Hash Rate Soars Amid Quiet Market

Bitcoin’s underbelly is stirring! Despite the premier cryptocurrency trading at a lacklustre $26,000, its mining difficulty has skyrocketed, hitting an electrifying peak of 55.62 trillion hashes. This surge isn’t just a tech oddity; it’s emblematic of Bitcoin’s innate resilience and future allure. Meanwhile, the digital gold’s hash rate too dazzled, ascending by over 60 percent since the year’s onset. If that’s not enough, a staggering 40 percent of Bitcoin’s supply has been lying dormant for over three years – a testament to long-term believers. Yet, for those searching for tremors before the quake, the one-year inactive supply seems to be echoing Bitcoin’s price moves with uncanny precision. While Bitcoin’s recent tumult suggests stormy seas ahead, the underlying metrics tell a tale of a market full of nuance, anticipation, and undying belief. The next chapter? Only time will tell.

Meanwhile, as we glance over globally correlated markets, the S&P 500 demonstrates resilience, hinting at either the dawn of a bull-market rally or the shadow of a darker downturn. Powell’s Jackson Hole remarks have put the market on its toes, driving speculation about the US Federal Reserve’s next move. Meanwhile, China, reeling from the aftershocks of Evergrande’s bankruptcy declaration, witnesses its stock market descend to a historic low against US indices, reminiscent of the 2001 divide. The astounding plunge in China’s High Yield real estate index, coupled with a strategic rate cut by the central bank, suggests turbulent waters ahead for the world’s second-largest economy. But as China navigates this storm, global markets, for now, watch silently from the shore. 

In the macro section, the US economic landscape presents a complex tapestry of challenges and opportunities, with sluggish growth, a divided housing market, mixed business indicators, shifting consumer sentiment, and the Federal Reserve’s strategic stance all converging amidst a backdrop of uncertainty.

The latest S&P Global report reveals that the service sector, a significant economic driver, experienced a contraction in demand for new business, casting a shadow over August’s sluggish growth.

In the US housing market, existing home sales are grappling with challenges posed by mortgage rates and limited inventory, causing prices to surge. On the flip side, new home sales are soaring due to a scarcity of existing homes, combined with lower prices and amplified demand for new constructions.

Meanwhile, business spending barely eked out a gain in July, prompting concerns about the investment aspect of the economy. In a twist, fresh data concerning jobless claims defied expectations by plunging to record lows in August, underscoring a tight labour market. These concerns are rooted in an apprehensive outlook for the economy’s trajectory despite the current positive trends driven by robust consumer spending and a resilient labour market.

Federal Reserve Chair insights at the Jackson Hole symposium shed light on the central bank’s strategy regarding interest rates and its resolute stance on taming inflation. Powell’s discourse unfolded against the backdrop of a perplexing economic landscape fraught with uncertainty.

In our news from the crypto-sphere, the whirlwind continues. In a landmark ruling, China’s crypto-clampdown hits hard as a prominent Chinese official, Xiao Yi, receives a life sentence over a staggering $329m Bitcoin mining ruse. Meanwhile, across the Atlantic, New Jersey’s former corrections officer, John DeSalvo, plays pied piper, allegedly duping over 200 first responders with a ‘crypto pension’ ploy, pocketing a cool $620,000. Not to be outdone, premier exchange Bitstamp halts Ether staking for US patrons, echoing moves by Kraken and Coinbase, all dancing to the SEC’s tightening tune. Amidst this storm, DeFi titan Balancer Labs spots a vulnerability in its V2 Pools, sending ripples across the crypto-lake. As the crypto-saga unfolds, vigilance and nimbleness remain the order of the day.

Happy Trading!