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Shrimpers are sweeping BTC off the market faster than at the peak of the 2017 bull market

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In cryptocurrency slang, shrimpers are holders who have less than 1 BTC in their wallet. Right now, the number of shrimpers in the market is growing as fast as possible. Even at the peak of the historic bull market in late 2017, they weren’t arriving in such numbers.

Shrimp are near the bottom of bitcoin’s joke food chain, just above plankton. The lowest kind of cryptocurrency organisms are holders with less than 0.05 BTC. This is not the only classification of bitcoin holders, but it gives an idea of the size and importance of the various market participants.

Bitcoin shrimp are gaining ground

Previously, the number of small bitcoin addresses is steadily growing despite a deep correction in the market. The number of wallets with balances of over 0.01 BTC and over 0.1 BTC has been steadily increasing since early 2021.

However, this trend accelerated in mid-June 2022. During previous market cycles, such dynamics in the bitcoin network indicated a bull market acceleration. In contrast, during major market corrections, onchain analysis generally indicated a slight increase, stagnation, or even a decrease in the number of addresses with a balance of less than 0.1 BTC.

Well-known analyst in cryptocurrency circles @WClementeIII tweeted a 90-day graph of changes in the number of coins in the hands of small holders (no more than 1 BTC in the wallet). It shows the strong growth of bitcoins in shrimp wallets. The current values have left behind the levels of late 2017, when the market was dominated by bullish sentiment and the BTC exchange rate reached an all-time high of $20,000 at the time.

During that time, BTC managed to plummet to $69,000, fall 70% in price, and return to the landmark level of 2017. Bearish sentiment and extreme fear are in stark contrast to the euphoria and exorbitant greed that reigned over the market in late 2017. And yet the shrimpers are behaving just as they did then. Moreover, they are buying bitcoin even more willingly, believing that now is the right time to do so.

Why shrimp are buying BTC

The classic market axiom is that “retail is never right.” With 2017, it’s clear: Small investors were buying at the peak and big whales were dumping coins. They sold at the best possible time. But the situation is different now. Shrimp accumulates bitcoin in large quantities after it has already lost 70% of its value.

But there is a third possibility: the increase in the number of holders with a balance less than 1 BTC, does not indicate an influx of small private investors. It’s possible that people are simply splitting their investments, opening many wallets with small balances. This was pointed out by another well-known crypto analyst @woonomic. He wrote:

“Keep in mind that such data on the number of holders is extremely unstable and tends to be overly optimistic on short intervals. It takes a couple of years for the statistics to settle down. For example, it is assumed that small transactions are made by new people and then it turns out that they belong to an existing investor who has more than 1 BTC.”

Cryptocurrency podcast host @VentureCoinist, thinks the influx of shrimp is still a sign of an impending downturn.

“I’ll pretend I didn’t see what happened the last time this metric went up this much.”

Finally, another user @fusillifadi, posted data that seems to support Clemente’s assumption of organic shrimp growth. Citing data from cooper.co, he provided a graph of the average daily growth rate of wallets with balances under 1 BTC.

Since the end of 2021, year, we have seen a clear trend of shrimp growth that can only be compared to 2017. Although the last period of 2017 saw a much larger increase, the current numbers are ahead of the trend recorded in 2018-2021.

Shrimp buy bitcoins mostly from miners. In 2017, 49% of bitcoins sold by miners went to wallets with a balance of less than 1 BTC. In 2022, that figure rose to 75%. Other onchain statistics confirm the surrender of miners. Thus, we get the answer to the question of who supplies bitcoins to the shrimpers.

Cryptocurrency

Portugal and cryptocurrency: 12 companies await permission to operate

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Portugal and cryptocurrency

Portugal and cryptocurrency news: Central Bank is considering 12 applications submitted by companies that intend to provide cryptocurrency services in the country. These include the Binance exchange.

Final decisions on the applications are expected by the end of this year, unless the regulator asks the companies to provide additional information. 

Among the applicants for the license is the world’s largest cryptocurrency exchange, Binance. The company has already started recruiting staff in the country, posting six vacancies on its website. 

Portugal is still considered one of the most favorable countries for digital asset businesses in Europe. Among those already approved are Mind the Coin, Criptoloja, Digital Luso, Bison Digital Assets and Utrust.

However, major Portuguese banks Banco Comercial Portuguesa and Banco Santander, as well as two smaller local banks, have recently suspended services to several cryptocurrency exchanges, including CriptoLoja and Mind the Coin. This probably happened because of the situation in the cryptocurrency market.

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Cryptocurrency

Vitalik Buterin: Transition to Ethereum PoS algorithm could make crypto payments popular again

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Ethereum PoS algorithm

During the Korea Blockchain Week 2022 conference, Ethereum co-founder Vitalik Buterin said that the network’s move to Ethereum PoS algorithm could increase the popularity of cryptocurrencies for everyday payments.

Buterin recalled that previously using cryptocurrencies for payments was more common, but most blockchains faced scalability issues and high fees. So now everyday payments using digital assets are not as popular.

“Cryptocurrency payments somehow lost popularity after 2018. And, naturally, transaction fees were one of the reasons for this. In the future, after the implementation of rollups, after all the efficiency improvements, transaction fees may come down to 5 or even 2 cents,” Buterin stressed.

Recall that Ethereum is to switch to the Proof-of-Stake (PoS) algorithm in mid-September. This will increase the bandwidth of the network. In the future, with the introduction of sharding and other technologies for scaling, the figure will grow even more. Accordingly, transaction fees will also decrease.

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Cryptocurrency

Hodlnaut news: cryptocurrency lender halted cryptocurrency withdrawals

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Hodlnaut news

Urgent Hodlnaut news: Cryptocurrency lending site Hodlnaut has unilaterally frozen cryptocurrency withdrawals. This is reported in the blog of the service. Representatives of the project claim that the reason for the stop was the need to “stabilize liquidity.” What exactly hit Hodlnaut’s liquidity remains unclear.

Meanwhile, the company “can’t” give an exact date for the resumption of cryptocurrency withdrawals because the details have not yet been agreed upon between “all stakeholders.” However, Hodlnaut hinted that the process will not be quick, as the company has begun work to “restructure” the business.

“We believe that stopping the withdrawal of funds will give us the necessary respite to explore possible restructuring options and recovery plans with our legal advisors,” Hodlnaut said.

At the same time, the media revealed that Hodlnaut had withdrawn its application for a Singapore license that would have allowed the project to provide a token conversion service. Users who were receiving interest payments on deposits before the freeze will continue to receive rewards until the service expires.

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