Bitcoin industry news for August 2023

Here's what happened in the bitcoin industry during August 2023.

Top Events

• The first bitcoin ETF could be coming soon as court rules in favour of Grayscale over SEC. The U.S. Court of Appeals for the D.C. Circuit sided with Grayscale in a lawsuit against the Securities and Exchange Commission which had denied the company’s application to convert the Grayscale Bitcoin Trust to an ETF. Don’t expect the floodgates to open immediately, but it’s an important step for bitcoin.

• There are now more than 1 million addresses on the bitcoin network with at least 1 bitcoin. That is growth of more than 100,000 addresses to this club in less than a year.

Lightning Network Updates

• Brisbane-based tech company Wallet of Satoshi is experiencing rapid growth. The first 5 million payments on their Lightning Network app took almost 4 years, while the last 5 million only took 8 months.

Bitcoin Mining

• An introduction to bitcoin mining with ‘stranded’ natural gas. Traditionally, both stranded and flared gas have been considered waste products in the oil and gas industry. However, recognition of the potential these resources hold as a low-cost power source for bitcoin mining is slowly reshaping how industry players view these gas forms, in many cases shifting them from a liability into an asset.

• Value investors take notice: Bitcoin mining company CleanSpark (NASDAQ: CLSK) is doing what any company in cyclical industries should - expand heavily during the bear market.

• Australian company Iris Energy (NASDAQ: IREN) purchased 248 NVIDIA H100 GPUs for ~US$10 million to target generative AI. The company is exploring whether its mining data centers powered by 100% renewable energy can expand into adjacent computing markets
  

• Bitcoin miners were selling bitcoin throughout the second half of 2022. These same market participants have been buying/holding bitcoin year-to-date (see chart below). It is a strong sign to see the lack of sell pressure from miners in the market.

Best Articles and Podcasts

• The Lightning Network has seen significant growth in the last year, and continues to grow at 30% per year. Now there is a booming ecosystem of businesses building out the bitcoin economy.

• At the heart of Bitcoin’s monetary policy is a key concept known as the "halving”, where issuance of new bitcoins gradually decays over time. Ahead of the 4th halving next year, it’s a good time to understand Bitcoin’s halving cycle.

Macro and Politics

• An interesting breakdown of price inflation in the United States. Scarce, energy intensive, and labour intensive things tend to rise in price more quickly than CPI. Deflationary things with rapid productivity growth (electronics, software, textiles, plastic manufactured goods, etc) pull down the CPI average.

• The IMF was hugely against the adoption of bitcoin in El Salvador and worked incredibly hard to undermine the project (and continue to do so). The story, which we do not get told, is rather different there. JP Morgan upgraded El Salvador’s debt this week on the back of stellar economic growth figures, 9% in the recent quarter.

• America’s largest trading partners visualised:

Meme of the month