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Bitcoin mining gets easier after record first half for NFTs

2021.07.11 Adam James

Chinese miners are dumping GPUs on secondhand marketplaces, resulting in a collapsing Bitcoin hash rate — but a lower mining difficulty.

The cryptocurrency market never slows down, and this week certainly didn't buck that trend. While Chinese Bitcoin miners dump GPUs on secondhand marketplaces, the network's mining difficulty has seen a historic decrease. Cryptocurrency exchange Binance has also come under near-daily regulatory pressure from banks and financial watchdogs as the Bank of America launches its own cryptocurrency analysis team.

Here's everything you need to know about these stories, and more, in this week's edition of OKEx Insights' News of the Week.

Bitcoin mining difficulty sees largest drop in history

Bitcoin's mining difficulties experienced the largest decrease in its entire history early this week, as reported by multiple industry sources. Specifically, the latest difficulty adjustment saw it become 28% easier to successfully mine new blocks.

Key takeaways

  • Bitcoin's mining difficulty drop comes amid an exodus of cryptocurrency miners from China, which has cracked down on the industry in unprecedented fashion.
  • Because Bitcoin is something of a self-sustaining system, the difficulty adjustment theoretically incentivizes other miners to pick up the slack by making it easier — and, thereby, potentially more profitable — to mine new blocks. Additionally, the adjustment also helped speed up average transaction times, which had become sluggish.
The difficulty of the Bitcoin network has taken its largest hit in history. Source: CoinWarz

NFT sales hit $2.5 billion in first half of 2021

The first half of 2021 saw the nonfungible-token market demolish its previous sales numbers. From January to June of this year, $2.5 billion in NFT sales were recorded, per data from DappRadar.

Key takeaways

  • The NFT market has largely been dominated by a selection of big-name projects — including but not limited to CryptoPunks, NBA Top Shot and The Bored Ape Yacht Club.
  • Beeple's record-setting $69.3 million sale of "Everydays - The First 5000 Days" also contributed in a large way.

Chinese cryptocurrency miners dumping GPUs

Chinese cryptocurrency miners have begun selling used graphics processing units on secondary marketplaces amid an ongoing crackdown on Bitcoin mining in the country. As originally reported by The Block's Wolfie Zhao, bundles of GPUs are being posted for sale on Alibaba-owned marketplace app Xianyu.

Key takeaways

  • In addition to affecting Bitcoin mining, Ethereum — a network reliant more on GPU mining — has seen a significant drop in hash rate amid the crackdown in China and subsequent dumping of GPUs on secondhand marketplaces.
  • The mining situation is entirely different than in the recent past, when OKEx Insights noted that gaming laptops were becoming popular among Ethereum miners amid a severe shortage of desktop GPUs.

Binance banned by banks, suspends SEPA euro deposits

It's been a rough week for Binance — a competitor of OKEx.

After Thailand's Securities and Exchange Commission filed a criminal complaint against Binance late last week, this week saw United Kingdom-based bank Barclays ban credit/debit card fund transfers to the exchange — citing its "responsibility to help protect your money." 

Subsequently, Binance suspended Single Euro Payments Area, or SEPA, euro bank deposits.

Following that up, the Polish Financial Supervision Authority published a statement about Binance's apparently unregulated operations in the region before the U.K. unit of Spanish banking behemoth Santander banned the transfer of funds to Binance.

Key takeaways

  • Regulatory pressure is mounting in the blockchain and cryptocurrency industry, and Binance appears to be very clearly a target for regulators in the U.K. and European Union.
  • Speculation might point to the perpetuation of low-value tokens on Binance Smart Chain — which has become somewhat synonymous with scams and rug pulls — as a primary driver for the increased regulatory heat.

Bank of America launches cryptocurrency research team

Bank of America has launched a new research unit with the sole purpose of covering the cryptocurrency market. The new team's lead at the Wall Street banking behemoth will be Alkesh Shah, per a memo seen by Bloomberg, which originally reported the news.

Bank of America's head of global research, Candance Browning, wrote in said memo:

"Cryptocurrencies and digital assets constitute one of the fastest growing emerging technology ecosystems. We are uniquely positioned to provide thought leadership due to our strong industry research analysis, market-leading global payments platform and our blockchain expertise."

Key takeaways

  • Bank of America's new cryptocurrency-research unit further signifies that major banks are no longer rejecting the industry that previously aimed to supplant them. Instead, they are taking a keener interest.
  • The Wall Street giant has already had some interest in cryptocurrency, as it notably holds many blockchain-related patents.

OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.