12 min readThe end of the week, this week, marks a very special date in the history of Bitcoin as it was the day that, 10 years ago, Bitcoin was first used as digital cash. Bitcoin Pizza Day celebrated on May 22, saw two pizzas bought with 10,000 BTC — a sum of money that today would mean those pizzas are worth $93 million.
While this is an interesting day in the history of Bitcoin, and something worth reminiscing and celebrating, it has not been the best week in terms of market performance for the major cryptocurrency as the coin has fallen in value, and fallen sharply. The latest drop has taken the upward trend away from $10,000 and closer to the $9,000 mark.
A number of external factors seem to be playing their part in the drop in price as a few odd occurrences have happened it’s growth. BitMEX, one of the bigger exchanges, saw more unscheduled downtime which annoyed and aggrieved traders. But there was also speculation and excitement at the fact that coins minted a few years after the creation of Bitcoin were moved — Was it Satoshi Nakamoto himself?
However, all these strange occurrences affecting the Bitcoin market have not really come into play for altcoins which have had a stronger week, especially the smaller capped coins. Some of this may also be down to the activity on the exchanges with regard to Bitcoin as there are big withdrawals on the exchanges of BTC.
Grab A Slice
Pizza day in Bitcoin is more of a time to take cognizance of how far the coin has come both as a technology and a financial tool, as well as its market value. The growth of Bitcoin’s price has been good over the years, but looking back as far as a decade ago, the increase in price is phenomenal.
On May 22 10 years ago Laszlo Hanyecz made the now-famous purchase of the Bitcoin pizzas after offering to buy pizza with bitcoin on the bitcointalk forum page. He bought the two large pizzas from the forum user Jercos for 10,000 BTC, which at the time was worth $41.
The real significance of this is that it represented the first time Bitcoin was used in a real case scenario, but today, the interest is to see how far the pizza’s value has risen. Those two pizzas, of $41 are now with over $93 million.
It was also the representation of a new way of transacting — entirely digital, and with no intermediaries involved either. But, while Bitcoin is worth a lot more than it was then, it is also a very different asset to back then because its major use now is as a store of value and an investable asset. Not really very good for buying pizzas from the local pizzeria.
While Bitcoin’s value has risen well in the last 10 years, the last seven days have been less kind to the market as the price of the coin — after being on a long-standing upward trend, has closed the week down over seven percent.
There was quite a strong downward collapse of the price of the coin as it shed in the region of $1,000 towards the end of the week, but this followed a number of days of almost flat trading with the coin stuck with its head banging on the $10,000 ceiling.
Altcoins Make A Break
While Bitcoin has been down, and impacted by strange occurrences this week, the altcoin market has taken the time to spring up and make a drive for some impressive gains. In saying that, both the next two biggest coins by market cap — XRP and ETH — are down this week too, having still coupled with BTC’s price.
These losses are rather small though, and they come off the back of a drive midway through the week for Ethereum at least which gained over six percent in the week before closing out with a 1.86 percent loss. XRP traded mostly sideways before falling with BTC and then bouncing back to close the week with a minor two percent loss.
A little lower down the market cap table there was some good growth for a number of altcoins with the best performer seeing a massive 68 percent gain on the week which comes on top of a 202 percent gain from the month before and a total 178 percent gain for the year to date — these impressive figures belong to OmiseG.
Other big performers this week are Theta Token with a 40 percent spike in the week and ICON which made a respectable 12 percent gain for the week.
One of the reasons that Bitcoin was under pressure this week is because, for a moment, there was a belief that the creator of Bitcoin — Satoshi Nakamoto, may have suddenly made himself known again and was ready to move and potentially sell a mass of coins.
On Wednesday Twitter was a flurry of excitement when 50 BTC that was minted near the genesis of Bitcoin was moved after 10 years of idleness. The transaction was linked back to a block reward that was dated on February 9 2009, which is a very early token that only a handful of early Bitcoiners would have had access too — including Nakamoto.
This news sent the price of Bitcoin spiraling down when it became public and the debates started raging of its potential to be Nakamoto as many thought that the creator could be lining up to dump millions of coins on the market.
However, Nakamoto was not the only miner at the time of the block reward attributed to this transaction. This saw a deeper analysis of the bitcoin blockchain come into play where it was identified that there was a pattern in the nonces which is linked to the creator.
Looking below, the blocks believed to have been mined by Nakamoto (The Patoshi Blocks) are highlighted in blue. Nonces not linked to Satoshi are green. The block contributing to the block reward that was moved does not belong in any of the Patoshi Blocks, and probably belongs to another early miner, it was concluded.
This news, even though it proved to probably be fake news, had its impact on the market — but then so did the unplanned maintenance from BitMEX which caught the ire of much of the community.
Market Still In An Uncertain Place
Despite the weeks of progress after the mid-March fall, and the Bitcoin halving going off without a hitch, the market is still in a position of fear, and this is highlighted this week with the falling price.
The Fear & Greed Index is now down to 42 and the market is fearful again after it looked like it may reach a more neutral pace at the end of the week last week. This means that the market is more or less back to the same state as one week ago, after failing to push above $10,000 for the second week in a row.
Other metrics around the Bitcoin market show both volume and volatility dropping as after the 7-day average real trading volume for Bitcoin pushed to the highest levels seen in 2020 last week, that same volume is fallen back a bit, but in general, it is still quite high and there is more trading evident this month than there was last month — a sign of growth and prosperity.
The volatility of Bitcoin may have seen a bit of a price drop at a rapid pace, but most of the week saw near-perfect sideways movement of the price which flattened the volatility. The 30-day volatility is now back above the 7-day volatility. However, a retrace is very possible because of the strange events of the end of this week and the uncertainty it has brought.
Exchanges Seeing Big Withdrawals
Bitcoin exchanges are showing data that is indicative of major withdrawals off of the platforms. As it appears that the BTC balances on exchanges are at a level that is near the lowest seen in a year.
These dropping levels unsurprisingly began after the market crashed in the middle of March with the fear of holding onto Bitcoin reinvigorated and the sting of its downward volatility again realized.
A year ago things were in the opposite direction as the level was low before a major uptick in exchange balances started to take off. The speculation is that people are either moving their coins into cold storage or perhaps taking control of their own private keys and not storing on exchanges.
However, it could also be that the market collapse has people fearful and much of those coins have been cashed out or turned into fiat on the exchanges.
In The News
National Crypto Mining Strategy Proposed By Iran President
Crypto mining-progressive county, Iran, has seen its president Hassan Rouhani order the government to draw up a renewed national approach for the emerging crypto industry. Iran has been rather harsh on crypto, but keen on the mining industry, and has told officials from the Central Bank of Iran (CBI), energy department and information and communication technology ministries that a new strategy for crypto mining is needed.
African Bitcoin Documentary Streams On Amazon Prime
The growth and adoption of crypto in the mainstream media took a boost when one of its better use cases — financial freedom in Africa and other unbanked rural areas — was showcased in a documentary streaming on Amazon Prime. “Banking on Africa: The Bitcoin Revolution,” made by South African filmmaker Tamarin Gerriety with sponsorship from the crypto exchange Luno, is available on the streaming service.
Bakkt Announces New Insurance Coverage And Boasts 70 New Custody Clients
Bitcoin warehouse Bakkt has onboarded more than 70 clients for its custody services and given them the option to tap more than $600 million in insurance coverage overall, the company announced Monday.
Information provided in PrimeXBT’s market report includes data provided by Arcane Research, in addition to other internal market research.
The information provided does not constitute, in any way, a solicitation or inducement to buy or sell cryptocurrencies, derivatives, foreign exchange products, CFDs, securities and similar products. Comments and analysis reflect the views of different external and internal analysts at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of PrimeXBT. The recipient acknowledges and agrees that by their very nature any investment in a financial instrument is of a random nature and therefore any such investment constitutes a risky investment for which the recipient is solely responsible. It is specified that the past performance of a financial product does not prejudge in any way their future performance. The foreign exchange market and derivatives such as CFDs (Contracts for Difference), Non-Deliverable Bitcoin Settled Products and Short-Term Bitcoin Settled Contracts involve a high degree of risk. They require a good level of financial knowledge and experience. PrimeXBT recommends the consultation of a financial professional who would have a perfect knowledge of the financial and patrimonial situation of the recipient of this message and would be able to verify that the financial products mentioned are adapted to the said situation and the financial objectives pursued.
Author
Risk Disclaimer
