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Happy Birthday bitcoin! On January 3rd, 2009, the anonymous Satoshi Nakamoto launched the code behind the protocol and the genesis block of the chain was created. A user of a Reddit community took the opportunity to gather some interesting statistics. We share them with you.
Although bitcoin is only 14 years old today, 19,252,062 BTC out of the total to ever be created of 21,000,000 are in circulation. This is nearly 92% of the total ultimate supply. It will take another 117 years before all bitcoins are mined.
Investing in bitcoin has been profitable for 3,750 days, or 83% of its existence. At the same time, more than 259,912 BTC have been paid in transaction fees. These were particularly high during the 2017 bull market. The average transaction time over 14 years is 7.39 minutes. Finally, let’s remember that in October 2021, the very young asset exceeded a capitalization of $1 trillion. That milestone has since been lost, but purists have no doubt that this is a temporary cyclical decline.
As we have just turned the corner on the New Year, there is no doubt that 2022 will have been an absolutely dismal year on the markets. That doesn’t mean, however, that all is dark. Through the collapse of Terra, Celsius, Voyager, 3AC, FTX and BlockFi, which elements have shown promise for the industry?
Perhaps the most important was the merge of Ethereum, as the chain successfully switched from its proof-of-work consensus mode to proof-of-stake, reducing its energy footprint by over 99% in the process. This is an incredible technological feat that will enable the next waves of network evolution and scaling. While this success was not immediately reflected in the price, the fundamental picture of the 2nd largest crypto appears stronger than ever.
Important steps towards proper regulation of the emerging asset have also been taken. While such regulation has long been seen as a danger to the industry, the events of 2022 have instead shown its importance in making the sector more inviting and secure for the future. Regulators have also shown a certain openness, unlike in the past, speaking of a framework allowing for innovation rather than a complete ban on the asset class.
Finally, let’s note that despite the tumult of 2022, venture capitalists have never stopped putting money into blockchain-related projects. While such investments are certainly no guarantee of success, they do prove that many investors with deep pockets still believe in a rosy future – or should we say a strong return on investment – for projects in development in the industry.
FTX founder Sam Bankman-Fried pleaded not guilty to a series of financial crimes Tuesday in a New York federal court as part of his indictment. The man faces eight counts, including wire fraud and money laundering. He is also accused of violating campaign finance law by allegedly making illicit campaign contributions with diverted client funds worth tens of millions of dollars. Recall that Gary Wang, co-founder of FTX, and Caroline Ellison, former CEO of Alameda Research, have pleaded guilty to financial crimes related to FTX and are cooperating with the investigations. The judge presiding over the case has set a target date for the trial to begin in early October. Until then, SBF is out on the largest bail in U.S. history, a sum of $250 million.
Who put up that kind of money to allow the man to live with his parents in California rather than wait for his trial behind bars? We will probably never know. Indeed, Sam Bankman-Fried’s legal team successfully argued Tuesday that the names of two signatories supporting the disgraced FTX founder’s $250 million bail should be withheld from the public. In addition, the judge ordered that SBF cannot access or transfer funds from his former company, and its sister company, Alameda Research. This sanction follows rumors last week that he withdrew $684k using a transaction mixer to cover his tracks. Last Wednesday, the wallets were spotted exchanging obscure tokens for bitcoin and ether in addition to the stablecoin Tether. SBF came out of its silence on Twitter the same day to deny his involvement. We’ll take that for what it’s worth.
Luke Dashjr, the self-proclaimed “oldest Bitcoin Core developer,” revealed that an unknown hacker had managed to steal virtually all of his bitcoins. The total amount of bitcoins stolen is unknown, but in a Twitter thread, Dashjr traced some of it to a wallet address that received just under 217 bitcoins, or about $3.6 million at current prices. Dashjr attributed the hack of his Bitcoin wallet not to the protocol itself – obviously – but to a compromised PGP (Pretty Good Privacy) key. Later, in a discussion on Reddit, he stated that the attacker’s IP came from a ColoCrossing server.
Ark Invest is sticking to its guns, despite the fact that the hedge fund has wiped out all the gains that made it so popular just a few years ago. The company led by Cathie Wood bought 158,116 shares of Coinbase this week. The purchase is worth nearly $5.5 million based on COIN’s price of $34.78 at the closing bell. The move comes shortly after shares of the largest U.S. cryptocurrency exchange hit a new all-time low of $31.86 per share on December 28th. Although COIN has fallen more than 86 percent in 2022 and the majority of the fund’s other stocks have been hit hard, Wood says she believes she is taking advantage of a historic opportunity to buy the bottom of promising stock and points to a five-year investment horizon.
Crypto market action is slightly bullish at the start of the year. While the action was still quite similar to that of the traditional stock markets, it is the release of next week’s Consumer Price Index (CPI) in the U.S. that could possibly give the BTC price action the catalyst it needs. Also, while gold is doing quite well, many are hoping that BTC will finally don its digital gold jacket and increase its correlation with the precious metal.
The daily ETH chart is particularly interesting, with a clear triangle forming. While the $1,000 level looks like it will hold, a break of the upper diagonal could create short-term bullish momentum.
Rivemont Investments, manager of the Rivemont Crypto Fund.
The presented information is as of January 4th, 2023, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
