Bitcoin prices plummeted to the lower-$30K zone over the past few weeks, primarily due to China’s latest crackdown on crypto and miners. However, the coin shot up 5% to hit $34,471 on July 3, when the Bitcoin network underwent its latest two-weekly difficulty adjustment.
A Tough Test
The recalibration saw computing power requirements for mining BTC drop by a whopping 28%, the highest step-down yet for the network. This latest difficulty adjustment dwarfs the previous record drop of 18% set in Oct 2011.
The record adjustment was a reaction to the bitcoin hash rate dropping to a 13-month low as Chinese authorities shut down mining operations across the country. The record decline in difficulty adjustment means that miners running high-powered computers to validate transactions can be more profitable.
The network’s adjustment reflected on BTC prices over the weekend. The coin rallied past the $35K resistance and even broke $35.5K to form a high near $35,900. However, the bulls failed to clear the $36K zone, leading to the BTCUSD pair correcting lower. Per the latest data from coinmarketcap, BTC has parried gains of nearly 4% to trade for $34,270 currently.
The king coin must remain stable above $34K in the coming sessions to start a fresh increase toward $35K. The next major resistance is near the $35,250 level, above which the bulls could retest the $36K barrier.
China Could Regret its Crackdown on Bitcoin
According to Michael Saylor, the CEO of intelligence software firm Microstrategy, China’s geopolitical decision to expel miners and ban crypto could be a “trillion-dollar” mistake.
Saylor told Bloomberg that China might regret its decision to clamp down on BTC, given the flagship crypto’s growth rate of 100% year-over-year. The CEO also attributed the current market volatility and bitcoin price rout to Chinese miners having to sell their BTC holdings under forced liquidations and relocate their businesses elsewhere.
Saylor sees the ongoing war on crypto as a tragedy for Chinese miners, who until recently contributed over 50% to bitcoin’s mining capacity. However, the CEO believes that the event could open up an excellent opportunity for Western investors, particularly North American miners.
Strike to Offer Almost Zero Fees for BTC Purchases
Coinbase became the first exchange to list its shares on Nasdaq this past April and has seen its user base grow to over 56 million. The San Francisco-based exchange reported a staggering $1.8 billion in revenue for Q1 of 2021, and profits of $771M gained mainly from trading fees.
Now, Chicago-based bitcoin payments firm Strike says Coinbase isn’t “competing in the free market” and has been charging hefty fees to customers buying and selling BTC.
Jack Mallers, the CEO of Strike, warned that BTC buyers on Coinbase were paying to help subsidize “shitcoins.” He also revealed that his company would start allowing U.S. customers to purchase BTC for almost no fees.
“We just ripped the pin out of the grenade and tossed it into the crowd. Buying bitcoin will not cost more than it takes to acquire. Buying bitcoin will not subsidize sh*tcoin casinos,” Mallers wrote.