The Breakdown First Five - Wednesday, August 21, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Malaysia Steamrolls Bitcoin Miners

Literally. The Malaysian government seized almost 1000 Bitcoin miners and held a public spectacle to destroy them. A steamroller flattened the hashing machines as part of a crackdown on electricity theft. The government claims that $776M in electricity has been stolen by mining groups using illegal wiring to circumvent the meter. Around $450,000 worth of equipment was destroyed. 

4. Miner Selling Over

For the first time since early 2022, Bitcoin miners have stopped selling. According to data from NYDIG, publicly listed miners sold zero Bitcoin in July, the first month with zero marginal supply from miners during this cycle. This doesn’t include mining rewards or Marathon Digital’s $249M open market buy.

3. First Regulated Bitcoin Loan

Switzerland based Sygnum Bank has boasted of the first Bitcoin-backed loan offered by a fully regulated bank. The $50M syndicated loan was made to crypto lending platform Ledn. While this has echoes of loans made during the previous cycle, Sygnum is hopefully built on a firmer foundation. Founded in 2017, the first digital asset bank in the world holds a Swiss banking license and is regulated in Singapore, Abu Dhabi and Luxembourg. 

2. Whales Stopped Buying

Cryptoquant data shows that Bitcoin whales have slowed their purchases right down over the past month. This cohort is now adding to their stacks at only 1% a month, compared to a peak of 6% in February. Accumulation from permanent holders, the addresses that never sell have gone parabolic in August to hit a record high of 391,000 Bitcoin added per month. It’s unclear if this is institutions or small investor DCAs going mental, either way they’re not selling. 

1. More Mt Gox Distributions?

Another $700M worth of Bitcoin was transferred out of Mt Gox wallets last night to a wallet suspected to be linked to Bitgo. There’s now around $2.7B worth of Bitcoin left and most expect that this tranche of distributions are almost over, with the remainder to be distributed next year. Galaxy Digital researchers suspect this transfer was not actually a distribution, but rather the establishment of a new custody arrangement for the Mt Gox estate.