Daily Flash | Colombia To Introduce CBDC, Miner Riot Reports $350M Impairment Charges, And Crypto Market Remains Sluggish Ahead of Wednesday FOMC Meeting

Today's Headline - Riot Blockchain Q2 earnings dented by mining revenue slump, bitcoin impairment: bitcoin Magazine Report

Riot, one of the largest publicly traded bitcoin miners, released its Q2 bitcoin mining and production update on Tuesday. Notably, Riot recorded $349.1 million in impairment charges in Q2.

Adjusted EPS of -$0.50 at the end of June missed the average analyst estimate of -$0.15 and dropped from three cents on June 30, 2021. Its bitcoin Year-on-Year production increased by 107%, resulting in the production of 1,395 BTC valued at around $34 million, as opposed to last year’s 675 BTC, or roughly $16 million at today’s prices.

The company still holds a treasury of 6,653 BTC, or nearly $159 million.

Additionally, Riot currently boasts 44,720 application-specific integrated circuit (ASIC) BTC miners with a hash rate of 4.4 exahash per second (EH/s), which it will expand to 47,511 ASICs outputting near 4.9 EH/s once all of its recently shipped miners are fully deployed.

CEO Jason Les said in a statement,

“Although challenging global market conditions in the second quarter, further impacted by a steep decline in the price of bitcoin and resulting decline in market valuations for publicly-traded bitcoin miners, including Riot, necessitated non-cash impairment charges this quarter, these non-cash charges had no impact on our solid financial position and ample liquidity, both of which were further strengthened this quarter.”

Large impairment changes have been a common occurrence for miners as the prices of cryptocurrencies have plummeted this year. Most recently, peer Marathon Digital (MARA) said it booked $127.6 million impairment changes in the second quarter due to the decline in the prices of digital currencies.

Chart of the Day - Most Active Institutional Investors

As of this writing,
Bitcoin (BTC) is changing hands at around $24,024, down 0.08% in the past 24 hours,
while Ether (ETH) is trading at $1,898, or up 0.36% during the same period.
Major altcoins continue showing a mix of gains and losses, with Cardano (ADA) up by 0.61%, Solana (SOL) +1.31%, Polkadot (DOT) +3.07%, Avalanche (AVAX) -0.6%, and Cosmos (ATOM) +2.93%.

Notable gainers include:
Sperax (SPA) at $0.0181 (+72.81%),
Circuits of Value (COVAL) at $0.0233 (+38.03%),
EOS (EOS) at $1.56 (+24.14%).

Notable losers include:
Celsius Network (CEL) at $2.51 (-8.23%),
Civic (CVC) at $0.184 (-7.52%),
Ampleforth (AMPL) at $1.37 (-5.07%).

bitcoin (BTC) has been witnessing a tough battle between the bulls and the bears near the $25,000 level. A clear winner may not emerge in the short term due to a lack of a catalyst and major macroeconomic data scheduled for this week in the US, although traders may decipher and react to today’s FOMC meeting summary.

Investors are also keeping a close eye on Ether (ETH) ahead of its Merge scheduled for Sept. 15. A whale address that had remained dormant for three years transferred about 150,000 Ether on Aug. 14 which led to differing views with some speculating that the whale may dump his holdings after the Merge but others believe that the transfers may have been done to stake the huge quantity of Ether.

Other cryptos were mixed, with popular meme coins DOGE and SHIB continuing their recent surge and rising more than 13% and 3%. Futures tracking DOGE and SHIB recently had over $25 million in liquidations, data showed, suggesting part of the rally in them has stemmed from futures bets.

In terms of technical outlook, BTC was recently trading at $23,961, which is holding slightly above the 12-day EMA ($23,831). Although the relative strength index (RSI) in the positive territory indicates advantage to buyers, the sluggish movement in the past 4 days also indicate short-term exhaustion from the bulls.

The 20-day EMA ($23,547) which coincides with the weekly support level at $23,470, together acts as a strong support zone for the bulls to pull back to. A break below this zone may bring the price back to Aug. 4’s low of $22,398, which coincides with the 23.6% Fibonacci level measured from Mar. 28 - Jun. 18.

On the contrary, if the price rebounds off the 20-day EMA, it will suggest that bulls are buying the dips to this level, which could improve the prospects of a break and close above the $24,269 weekly resistance level. If this happens, the bulls would likely attempt to push the price towards the 38.2% Fibonacci level ($25,870) which acts as the next overhead resistance.

Ether (ETH), on the other hand, repeatedly rose above the psychological resistance at $2,000 from Saturday through Monday but ultimately the bulls could not sustain the higher levels and fall back below the monthly support zone ($1,918 - $1,947) to just above the 12-day EMA ($1,844).

If the bears manage to bring the price below the 12-day EMA, the next support would be the 50% Fibonacci level measured from Apr. 3 - Jun. 18, which coincides with the 20-day EMA ($1,777) to form a strong support zone.

However, the upsloping 20-day EMA and the RSI in the positive territory indicate that bulls are still in control which will likely keep the price from falling below the psychological level of $1,700 to prevent massive liquidations, considering the sheer amount of Ether derivatives open interests in August.

Whichever way the market decides to go, and whatever kind of trader you are, always beware of not buying into hype and be sure to set trailing stop losses to protect your investments. For the hodlers, on the other hand, it may not matter so much in the short term, but do learn how to hedge and diversify your portfolio to counter any potential unrealized losses.

Influencer of the Day - Colombia Tax Agency Chief to Introduce Central Bank Digital Currency: Decrypt Report

Luis Carlos Reyes, the director of Colombia’s tax and customs agency, DIAN, told Semana magazine Monday that the South American nation’s new government would look to create “a digital currency” that would make “transactions easier for the consumer.”

In his original statement,

"The creation of a digital currency... a digital currency that makes these transactions easier for the consumer… One of the important objectives is that when payments of a certain amount are made, they should be recorded in an electronic medium… this is important to improve the traceability of payments made in the economy… this measure would make it possible to avoid this type [cash] of under-the-table transactions and would have a potential benefit.”

Countries around the world are currently at different stages of researching and releasing CBDCs. Other than small Caribbean countries, like the Bahamas, most major economies have not yet released one, with the exception of China, which has already made its digital yuan live.

Colombia’s new president, Gustavo Petro, an ex-guerilla and the country’s first-ever left-wing president, took office on Aug. 7, last year said while campaigning that the country should mine bitcoin using renewable energy—instead of producing cocaine.

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Author: Gate.io Researcher Peter L.
This article represents only the researcher's views and does not constitute any investment advice.
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