MassMutual has announced that they have added $100 million of Bitcoin to their balance sheet, an investment that makes up approximately 0.04% of their total investment assets. This is massive news for Bitcoin, as MassMutual is a Fortune 100 life insurance firm, therefore experts in managing risk. In our opinion, this is one of the most important pieces of news for Bitcoin in 2020. With current factors such as massive QE and negative interest rates, MassMutual feels that Bitcoin is a safer play than many ‘traditional’ assets.

This week billionaire fund manager Stanley Drunkenmiller became the latest ultra-high net worth investor to announce he is long Bitcoin. Drunkenmiller, widely considered to be one of the world's greatest investors, joins other Institutional Bitcoin Bulls like Paul Tudor Jones, Jack Dorsey, Michael Saylor, and Steve Wozniak in expressing their belief in Bitcoin as a Store of Value & Inflationary Hedge. In his recent interview with CNBC Drunkenmiller disclosed his long-Bitcoin (and long-Gold) positions, explaining that Bitcoin has become an attractive store of value, especially to Millennial & Silicon Valley investors. Despite holding a much larger position in Gold than in Bitcoin, Drunkenmiller also stated that, "... if the Gold bet works, the Bitcoin bet will probably work much better because it has a lot more beta to it."

Based on current block times we expect to witness one of the largest Difficulty Reductions in Bitcoin History this Monday (11/2/2020), with estimates ranging from -13.65% to -14.18%. In the past, extreme Difficulty reductions have signaled favorable probabilities for long term capital deployment.

Monday’s Difficulty reduction puts miners in a unique position to capture the opportunity in Bitcoin as their margins are improved by: the favorable Difficulty adjustment, increasing transaction fees, and general Bitcoin Price Appreciation (+25% in October). It’s a great time to be a Miner!

We have witnessed a massive expansion of Institutional Bitcoin Mining activity in 2020 since the Halving occurred in May. This has led to an unprecedented demand for next-gen mining rigs and created lead times of 5+ months for models like the Bitmain Antminer S19 Pro. Bitcoin Network Hashrate and Difficulty continue to increase steadily as more of these new models come online each day. Although this activity is making the Bitcoin Mining landscape more competitive, it is also providing a very strong, positive signal for the Market. Growing Institutional investment in Bitcoin Mining indicates growing conviction in the future of Bitcoin.

Every month, Blockware CEO Matt D’Souza will provide an update on the state of the Bitcoin Mining Market. The scope of Matt’s involvement in the space provides a well-rounded perspective, which allows Matt to harmonize what is happening in Bitcoin, the Global Macroeconomic Environment, and Bitcoin Mining to develop a comprehensive understanding of what influences Bitcoin.

What is fascinating about BTC are the multiple short-term correlations that emerge. We have witnessed strong, short term correlations to Gold, to USD/CNY, and most recently US Equities.

By marrying the proper strategy and time horizon, Bitcoin Mining offers opportunities to significantly outperform simple buy and hold investment strategies. Bitcoin’s extreme volatility is best managed with a Dollar Cost Average Strategy, which mining best achieves…Mining is an excellent complement to holding Bitcoin. Market participants should have exposure to both to best position themselves over the long-term to capture the opportunity in Bitcoin: a disruptive technology and commodity in its infancy.

Many haven't noticed yet, but 30%+ of the mining network has shut off since the Halving. New Bitcoin is being allocated to more efficient miners who can hold and accumulate…

Difficulty just adjusted (-6%) and if the Bitcoin Network Hash Rate remains at present levels and block times remain constant, then Difficulty is estimated to decrease by another 16%-21% between now and the next adjustment. This reflects the immediate impact of the Halving - a net difficulty reduction of 22%-28%. Miners are going to receive margin relief

We analyze 2 Mining Strategies vs Holding Bitcoin:

1. Buy and Hold Strategy: a miner buys Bitcoin and holds for the long-term

2. Mine and Sell to Cash: a miner buys a mining rig and sells all rewards daily to cash for the life cycle of the machine

3. Mine and Play with House Money: a miner buys a mining rig and sells their operating expense to cash but holds the remainder in Bitcoin

With the proper strategy and time horizon, Bitcoin Mining offers opportunities to outperform simple buy and hold investment strategies. Many market participants get distracted by the illusion of being able to buy Bitcoin at the low and sell at the top. This is an improbable, lottery ticket strategy.

We have been receiving several questions about what will happen with the Bitcoin Cash (BCH) and Bitcoin SV (BSV) halving this week & whether these are precedents for the Bitcoin Quantitative Hardening. Below are Blockware Solutions expectations:

Several Miners run software to toggle between SHA-256 Protocols based on whichever is most profitable at the moment. This is simply arbitraging protocols to maximize profits which tightens the spread in revenue between each protocol.

As the revenue of BCH & BSV get cut in half, these miners that toggle back and forth will switch over to mining BTC. We expect a slight uptick in Bitcoin Difficulty. If every miner on the BCH & BSV Network switched over to Bitcoin it would increase Difficulty on the Bitcoin Network by 5.2%. BCH and BSV have their evangelists so we do not expect a material impact. We expect the result to be a future Difficulty increase of 1%-2.5% for Bitcoin attributed to BCH and BSV Miners switching over.

The 2020 Market Crash has revealed that our society and many industries are vulnerable and failure prone. But Only 1 Thing Matters - Bitcoin SURVIVED and will Continue to Survive by Itself.

A majority of assets perform well in a Bull Market – you can blindly throw darts at a board and be successful. Bear Markets reveal inefficiencies and pockets ripe for disruption.

If you’re a trader or investor in Bitcoin and don’t understand that the primary source of sell pressure on the price of Bitcoin comes from Miners, its in your best interest to research Miner Sell Pressure, Difficulty, Halving 2020, and Miner Capitulation.

Lower Fees + Exceptional Performance = More Bitcoin for YOU

https://bitcoin.blockwarepool.com/

We already have over 100 PH/s mining, ranking Blockware Pool as one of the top 20 largest Bitcoin Pools in the World. One of our 2020 company goals is to do everything we can to bring as much hash power online in the US. If Bitcoin is going to become a Global Reserve Currency, we need more hash power in America to rebalance the 65% of the hash power controlled by China.

Let’s continue to bring hash to America!

The signature characteristic of an early stage bull market is First Mover and Institutional Accumulation. The retail and weak hands get shaken out and puke their holdings to the institutions and large holders. These institutions and large holders have long investment time horizons, which is why we refer to them as strong hands. When the strong hands accumulate enough Bitcoin and soak up the weaker hands’ selling, the market will be positioned for significant price advancements as a majority of the selling is now exhausted.

We are pleased to announce that Blockware Solutions will be a Key Panelist sharing our insights on the Current Bitcoin Mining Environment this week in San Francisco. Several of the premier Crypto Funds, Feeder Funds, Investors, and San Francisco's Early Crypto Adopters will be in attendance at this intimate, invite-only event. There will be a detailed discussion expanding on the operational and financial aspects of Mining, along with the opportunities and challenges in the space.

If you would like to learn more or attend the event, don't hesitate to reach out. We will also be available for meetings between February 10th - 12th, let us know if you would like to meet in SF!

CME Bitcoin Futures are solely traded by institutional investors. Each CME Bitcoin Future Contract is equal to 5 Bitcoins: to trade the minimum one Contract, it will cost approximately $45,000 (BTC = $9,000). The product is designed specifically for institutions. Therefore, examining the trading activity on the CME Bitcoin Futures can provide valuable information regarding institutional participation in Bitcoin.

Despite the recent correction from $13,880, Bitcoin has rallied significantly from the lows and is attempting to re-establish a long-term uptrend. Historically, the price of Bitcoin is perfectly positively correlated with the price of mining rigs. However, mining rig prices often lag price fluctuations in Bitcoin and have remained near their lows. This provides miners with a great opportunity to expand their operations before the long-term bullish trend is resumed in Bitcoin, and the price of mining rigs surges.

Blockware Solutions is heading to Switzerland where our CEO Matt D’Souza will be presenting his investment strategies for Crypto Assets at the Protos Blockchain Summit, on January 17th. Matt will be discussing proprietary capital deployment strategies and how to maximize returns on Crypto Investments with other industry experts such as: Consensys, Protos Asset Management, Tezos Foundation, Tensor Alpha, Cambrial, Quantum Capital, and DLT Capital.

We have witnessed multiple instances of geopolitical instability where the market has treated Bitcoin as Digital Gold. Similar to Physical Gold, Bitcoin also tends to be utilized as a tool for capital flight in times of geopolitical uncertainty. We witnessed this dynamic over the past week with Bitcoin rallying on news of escalating US-Iran tensions, and also in 2019 with China’s Yuan devaluations and trade disputes with the US.

Blockware Solutions’ CEO, Matt D’Souza, presenting his take on the current Macro Trends impacting Bitcoin at Consensys and EpiCenter’s  “Macro.WTF Event” as part of San Francisco Blockchain Week presented by EpiCenter. Matt D’Souza was joined by other industry notables such as:

• Polychain Capital

• Protos Asset Management

• Consensys

• Castle Island

• Gabriel Jimenez - creator of the Petro

Millennials have recently surpassed Baby Boomers as the largest generation on the planet, accounting for 43% of the World’s adult population. The future of digital assets will be driven by Millennials and younger generations who already live in a digital world. Everything is done through the internet and smart phones

The Institutional Adoption of Bitcoin is Accelerating Despite Market Downturn

Despite the recent decline in Bitcoin price, a growing number of Institutions are continuing to increase their exposure to Bitcoin and Blockchain Technology, further strengthening the bullish case for Bitcoin. New developments this past week included: 

We believe that Bitcoin is currently in the first 1/3 of a parabolic bull market and expect the following Global Macro Economic themes to fuel demand for Bitcoin during this bull cycle:

Institutions invest most heavily in the early stages of Bull Markets, while Retail participation is minimal until the later stages. You always want to follow the Institutional “smart money” as it is the big money that moves the market. The data below suggests that the move in Bitcoin from $3,200 to $13,800, in 2019, was driven by institutional money, while retail money has remained on the sidelines. We are market historians and a characteristic of every early Bull Market is heavy institutional accumulation during the first ⅓ of the Bull Market — we are presently witnessing this through the data below:

The Blockware Team has returned from Chengdu, China after participating in the enlightening Global Mining Leaders Summit. At the conference, Mining Industry Leaders from all over the World gathered to share their insights and discuss new developments at the forefront of the mining space. Attendees included the following:

1. Top ASIC Manufactures: Bitmain, MicroBT, Innosilicon & Canaan

2. Largest PoW Pool Operators: Slush Pool, Poolin & BTC.com 

3. Industry Thought Leaders: Fidelity, Cambridge University & JD Mining – 300mw Farm

Miner Summit 2019 is an exclusive crypto mining conference taking place in the Sichuan province of China this October. Sichuan is known as the Bitcoin Mining Capital of the World - it dominants share of the bitcoin hash rate with mining facilities as large as 300mw's. Limited to 300 attendees, the conference is bringing together the top names in the mining industry. Admission is free, but it is invite only.

The Blockware Team has returned from an eventful trip at Blockchain Week in Berlin. We had insightful discussions with some of the largest Bitcoin Miners in Europe and the brightest blockchain technologists in the world. Additionally, we Co-Hosted a private dinner with Consensys to discuss the Future of Staking and Decentralized Finance which included invitees such as: Polychain Capital, Winklevoss Capital, Andreessen Horowitz, SKALE Labs and MarkerDAO. This was a gathering of the leading funds and blockchain companies in the industry - approximately 30 in attendance.

Blockware Solutions is proud to be named among the top validators on the planet as a Preferred, Star Validator for SKALE Labs’ live Fuji DevNet! SKALE Labs is an elastic blockchain network working to resolve Ethereum’s scalability issues and provide developers configurable and customizable framework for dApp development.

We believe we are in inning 1 or 2 of a strong bull market as Bitcoin continues to rally. Our analysis indicates that Bitcoin should retest the $13,800 previous rally high shortly and will likely race higher into the $15,000 - $17,000+ range. Back in July, our CEO, Matt D'Souza (Co-Founder and Portfolio Manager of Blockchain Opportunity Fund, LLC - a large Digital Currency Hedge Fund out of Chicago), posted the following research and analysis of his data driven thesis here.