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Hi Everyone,
At long last, we have the pleasure of wishing a warm yet cautious welcome to Gary Gensler, who has finally been sworn in as the new chair of the U.S. Securities and Exchange Commission (SEC). He certainly has his work cut out for him.
Though many in the world of investments are expecting the SEC to come down hard on special purpose acquisition companies (SPACs), those of us in the crypto space are eagerly awaiting urgent guidance regarding digital assets.
We already know that Gensler is one of the most qualified people ever to chair the SEC, and that goes double when it comes to cryptocurrencies, on which he has given multiple lectures, demonstrating his vast knowledge of the subject.
However, just because he's an expert, that doesn't tell us how friendly or unfriendly he may be, and in fact, the new chair has been extremely guarded in his public comments since being nominated to this decisive position. So we can only hope for the best.
Meanwhile in England, Rishi Sunak, chancellor of the Exchequer, has unveiled an ambitious plan to revitalize the post-Brexit economy. Spoiler alert, the plan includes the introduction of the queen's answer to bitcoin, a digital pound currently dubbed "Britcoin." |
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Slow network ahead
The anti-maximalists are gonna have a field day with this one, but it seems there's no denying that the bitcoin network is flooded once again.
I've personally had a BTC transaction pending for the last nine hours, with no confirmation in sight. This is not fun.
Looking at the mempool data, which shows us the number of unconfirmed transactions currently waiting their turn to be put into blocks, we can see an undeniable congestion in the network that has been building for a couple months now. |
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As we can see, there are currently about 175,000 unconfirmed bitcoin transactions, which is not nearly as high as the early 2018 peak of about 300,000, but still enough to slow things down considerably.
To make matters worse, a gas explosion in the Xinjiang province has halted mining operations across the region, and bitcoin's hash rate has seen it's steepest drop since October. |
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This has already caused block times to increase, along with fees for sending bitcoin.
The Bitcoin protocol is designed to offset this drop in hash rate by reducing the difficulty to mine a single block.
The problem is that the process only takes place once every two weeks, and the next one isn't expected for at least another 11 days.
Unless we see a quick recovery in the hash rate, it seems safe to say that things are gonna be a bit slow for a while. |
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Renewable support
As it tends to happen, and as predicted by our director of communications Gerald Votta in his daily podcast, the price of bitcoin and other cryptos (except dogecoin) has followed the hash rate lower.
The total pullback from peak to trough measures approximately 20% from the all-time high of nearly $65,000 (purple circle), and bitcoin is now maintaining support above $50,000 (orange line). |
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Should the orange line hold, there have been many predictions as to where it may continue, and when it might eventually top out.
Wishing you a wonderful week ahead! |
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Mati Greenspan Analysis, Advisory, Money Management |
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