Bitcoin market overview: Report reveals China’s mining domination, while BTC/USD’s mainstream usage gets questioned – FXStreet

  • As per Coinshares, China controls two-thirds of Bitcoin’s hashing power.
  • Billionaire “shark” Mark Cuban recently called Bitcoin “too difficult” to become a reliable currency.
  • The daily confluence detector shows a lack of support levels on the downside.

The king of cryptocurrencies has lately had a lot more eyeballs on it than usual, due to its upcoming “halving.” Halving is an event wherein the miner’s block reward (a reward they get for successfully mining a block) gets halved. This is done regularly after a certain number of blocks (210,000 in Bitcoin’s case) are mined to make sure that the supply-demand equation of the circulating tokens doesn’t go out of control. The bitcoin halving is going to take place around May 14, 2020, and the block reward is going to go down from 12.5 BTC to 6.25 BTC. Many investors believe that the price is going to skyrocket post halving as it did after the second halving. The second halving took place in July 2016. BTC/USD hovered around $600-$700 for a bit, before it suddenly spiked up by 33X, going up to $20,000 during the bull run of 2017. So, expectations are sky-high and some experts are even predicting the price to go up to as much as $100,000

For now, BTC/USD is currently under the control of the bears as the price has dropped down from $7,221.25 to $7,177 so far this Wednesday. The bulls will need to defend the $7,000 support line to prevent any further downward spiral. Plus, news reports came out about Bitcoin mining’s apparent centralization and its mainstream usage that may usher in more negative sentiment around the cryptocurrency.

China’s mining dominance

As per London-based digital asset manager CoinShares, China controls 66% of Bitcoin’s hashrate. In fact, 54% of the global hashrate comes from the country’s Sichuan province. “Hashrate” is a term used to describe the mining and computational power of the network. The more the hashrate, the more the speed and security of the network. According to CoinShares’ head of research, Chris Bendiksen, the gain in hashrate may be due to their greater deployment of more advanced mining gear. 

As per, the four largest mining pools in the world – Poolin, F2Pool, and AntPool are all Chinese and are responsible for ~55% of Bitcoin’s hashrate.

Regarding the remaining one-third of the global hashrate, CoinShares states:

Out of the remaining 35 percent of [global] miners, we estimate that 31 percent of global [hash rate] production is evenly split between Washington, New York, British Columbia, Alberta, Quebec, Newfoundland and Labrador, Iceland, Norway, Sweden, the Siberian Federal District of Russia, Kazakhstan, Georgia and Iran.

Questioning the mainstream usage of Bitcoin

Billionaire entrepreneur Mark Cuban recently aired his doubts on Bitcoin ever becoming a reliable currency. Cuban told reporter Benjamin Pirus that Bitcoin is “too difficult” to become popular:

Not because it can’t work technically, although there are challenges, it could, but rather because it’s too difficult to use, too easy to hack, way too easy to lose, too hard to understand, too hard to assess a value.

Interestingly enough, several entrepreneurs have lately shared the same opinion. Jill Carson, the co-founder of the Open Money Initiative, believes that cryptocurrencies like Bitcoin were never meant to go mainstream. Carson states that cryptocurrencies are mostly useful for breaking laws and social constructs.

There exists a long history of censorship resistant and privacy preserving technologies: Signal for messaging, Bittorrent for file-sharing, Tor for web browsing. Like bitcoin, these tools are not built for the mainstream.

James Todaro, the Managing Partner of Blocktown Capital, echoed Carson’s views while pointing out Bitcoin’s growing popularity on the dark web.

I know we like to ignore this for the sake of “mainstream acceptance”, but the USD value of bitcoin passing through darknet markets continues to increase regardless of bitcoin’s speculative value… I think @jillruthcarlson makes some good, realistic points.

According to the data shared by Todaro, the USD value of Bitcoin spent on the dark web has surpassed $1 billion. This possibly implies that maybe cryptocurrencies are only meant to be used for niched purposes and not mainstream usage.

However, there are detractors like Anthony Pompliano and Tim Draper. Draper believes that Bitcoin could possibly take could take a five percent share of the currency market by 2023.

My prediction was really based on creating enough of an infrastructure for Bitcoin to get a 5% market share around the world, as a currency.

Napolean launches Bitcoin Fund

In some positive news, Napolean AM, the asset management wing of French financial services firm Napoleon Group, released its first Bitcoin fund.

This is one of the first French funds to make novel use of Chicago Mercantile Exchange’s (CME) cash-settled Bitcoin futures. According to its prospectus, the fund seeks exposure to Bitcoin price movements without holding any actual Bitcoin. To that end, it trades CME bitcoin futures, the US’ only regulated cash-settled Bitcoin futures products. 

Napoleon AM’s Communications Director Sergio Gonzalez said:

We have opened the door for alternative use of futures in order to optimize replication and maintain access to the best sources in the future.

Stéphane Ifrah, President of Napoleon AM, stated in a recent press statement that the fund “is the culmination of discussions with the [French] regulator.” 

We are proud to contribute to the institutionalization and democratization of digital assets through a unique regulated fund under French law.

Twitter Reactions

Mia Tam:

Chinese miners control 66% of BTC hashrate, according to CoinShares  

But the Chinese government doesn’t love Bitcoin. What would happen if #China loved #Bitcoin?

Anthony Pompliano:

 I read your recent comments on Bitcoin and think you may be missing some key information.

I’ll fly to Dallas and we can record a podcast episode to discuss why Bitcoin is likely to be the next global reserve currency.

You in??

Napolean Group:

We’re proud to announce the launch of our first crypto fund regulated by French law, the “Napoleon Bitcoin Fund”, which provides an indexed performance on the evolution of the #bitcoin price in a secure environment.

BTC/USD daily chart


BTC/USD dropped from $7,221.25 to $7,177 and has found resistance at the 20-day Simple Moving Average (SMA 20) curve. The 20-day Bollinger jaw has narrowed, indicating decreasing market volatility. The Moving Average Convergence/Divergence (MACD) indicates decreasing bullish momentum, while the Elliott Oscillator has had a red session following six straight green sessions.

BTC/USD daily confluence detector


The daily confluence detector shows us that there is a lack of support levels on the downside. If the market sentiment gets increasingly bearish, then a sudden price drop may not be that unexpected. Worryingly, no strong levels are keeping the price above the $7,000-zone. On the upside, there are two resistance levels at $7,385 and $7,260. $7,385 has the SMA 10, SMA 50, SMA 100, SMA 200 and one-day Bollinger Band middle curve. $7,260 has the one-week Fibonacci 23.6% retracement level, one-month Fibonacci 23.6% retracement level and one-day Fibonacci 38.2% retracement level.


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