Author: Michelle Lazo

JPMorgan (NYSE:JPM) estimates that the current cost of mining Bitcoin has dropped to around $45,000, down from over $50,000. This decrease follows the quadrennial halving event last month, which cut miner rewards by 50%.

The hashrate, which measures the total combined computational power used for mining and processing transactions on the Bitcoin network, did not immediately fall post-halving as expected. According to JPMorgan, this delay was due to the launch of the Runes protocol, a new form of token creation that temporarily spiked transaction fees, boosting miner revenue and offsetting the reduced issuance rewards from the halving.

“This provided a temporary boost to miner revenue in the immediate aftermath of bitcoin halving,” analysts led by Nikolaos Panigirtzoglou wrote. However, the report noted that the increase in fees was short-lived, with user activity and fees dropping significantly in recent weeks. This decline highlights the ongoing challenge for bitcoin miners to maintain sustainable revenue, particularly in the post-halving environment.

As the Runes hype faded, network power consumption fell more than the hashrate, indicating that unprofitable miners with inefficient rigs have exited the network. The report explains that there’s a feedback loop with Bitcoin prices: as prices decline, more unprofitable miners are pressured to leave the network, leading to a larger drop in hashrate and mining costs.

JPMorgan does not foresee any near-term upside for Bitcoin prices due to several headwinds, including the lack of positive catalysts and diminishing retail interest.

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As bitcoin prices soar, crypto wallet recovery services are experiencing a sharp increase in demand from retail investors desperate to regain access to their accounts. Cryptocurrencies, stored on decentralized blockchain ledgers, can be accessed through software or hardware wallets, bypassing traditional exchanges. This method, while reducing certain risks, also presents challenges such as forgotten passwords and lost access to two-factor authentication devices, which can lock investors out of their holdings.

The recent bitcoin rally, reaching a high of $73,803.25 in March, has intensified the fear of missing out (FOMO) among investors. According to Reuters, several investors who lost access to their wallets have successfully regained entry through recovery services, driven by the higher stakes involved as bitcoin prices hover around $60,000.

Companies like ReWallet in Germany and U.S.-based Wallet Recovery Services have reported significant increases in service requests, with some fees reaching 20% of the wallet’s value, payable only upon successful recovery. The urgency for access is underscored by an estimated 20% of all bitcoins being inactive, translating to about $237 billion in potentially lost assets.

As the crypto market continues to fluctuate, wallet recovery services are becoming crucial for investors locked out of their digital fortunes, highlighting the ongoing challenges and opportunities within the cryptocurrency security sector.

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Crypto markets showed minimal changes in the last 24 hours, with major cryptocurrencies like Bitcoin and Ether experiencing slight fluctuations, according to CoinGecko data. Bitcoin rose by just over 1%, while Ether dropped by 0.5%. Meanwhile, BNB from BNB Chain and Sol from Solana recorded a 3% decrease.

The crypto landscape saw significant activity among meme coins, which surged following a continued rally in GameStop’s (NYSE:GME) shares earlier in the week. Dog-themed Floki led the gains among major tokens, climbing 12%, while Pepe  reached a new all-time high with a 5% increase.

The meme coin rally was partly fueled by a social media post from Keith Gill, a notable retail trader who previously influenced a major short squeeze on GameStop’s stock in 2021. His recent post led to a surge in meme stocks and tokens, drawing on his @TheRoaringKitty persona.

Amid this, a joke GameStop token on the Solana blockchain reached a $100 million market capitalization, marking a 700% increase in just a week.

Despite these gains among meme tokens, the broader crypto market appears weak, with no significant support from the bullish trends in equities or the weakening dollar, as noted by Alex Kuptsikevich, a senior market analyst at FxPro.

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Polymarket, a cryptocurrency-based prediction market platform, has successfully raised $45 million in a Series B funding round amid a surge in popularity leading up to the U.S. presidential election. The round was led by Peter Thiel’s Founders Fund, with notable contributions from Ethereum’s creator Vitalik Buterin, 1confirmation, ParaFi, and Dragonfly Capital, according to Polymarket founder Shayne Coplan, who communicated with CoinDesk via Telegram. The company’s valuation in this round was not disclosed.

This latest investment follows a previously undisclosed $25 million Series A funding round led by General Catalyst and includes a $4 million seed round from 2020, bringing Polymarket’s total raised funds to over $70 million. To support its next growth phase, Polymarket has appointed Richard Jaycobs as the head of market expansion, who previously held executive roles at traditional finance firms, including President of Cantor Exchange and CEO of The Clearing Corporation.

Polymarket is recognized as a leading platform for building prediction markets on cryptocurrency infrastructure. In these markets, participants place bets on the outcomes of real-world events within a specified timeframe, ranging from sports games to political events. For instance, a current market on Polymarket is gauging whether the U.S. Securities and Exchange Commission will approve a spot exchange-traded fund for Ethereum by May 31, with “Yes” shares trading at 16 cents, suggesting a 16% probability of approval.

These markets are touted not just as gambling venues but as tools for gaining a more accurate understanding of public sentiment and providing more reliable forecasts than traditional polls and punditry, a standpoint long advocated by economist Robin Hanson.

Despite a regulatory setback in 2022 that barred Polymarket from serving U.S. residents under a Commodity Futures Trading Commission settlement, the platform continues to see significant betting activity. This year alone, $202 million has been wagered on various events, with over $125 million staked on the presidential election. This exclusion from the U.S. market contrasts with Kalshi, the only CFTC-regulated prediction market, which faces potential regulatory challenges from the CFTC’s recent proposals to ban election-related bets, a rule that would not affect Polymarket.

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The Bitcoin network witnessed a steep 99% drop in daily Rune etchings, plummeting to just 157 Runes on Monday from a high of 14,700 in late April, as reported by Dune Analytics. This significant decline in the activity of the Rune etchings, which are part of a fungible token protocol, has dramatically decreased transaction fee income for Bitcoin miners.

On April 26, the network recorded a peak of 23,061 Rune etchings, but the recent slump has resulted in transaction fees from these etchings dropping to a mere US$3,835 on Monday. Despite this downturn, Rune transactions have remained a dominant force in Bitcoin network activity to date, with over 91,200 Runes etched on the Bitcoin blockchain.

The Runes protocol was launched on April 20, initially providing a substantial boost to miners’ earnings by generating significant transaction fees. This was particularly beneficial following the fourth Bitcoin halving event, which reduced the block subsidy to 3.125 BTC but was offset by increased transaction volumes from Rune etchings.

Developed by Ordinals creator Casey Rodarmor, the Runes protocol aims to efficiently utilize block space for creating fungible tokens, adhering to Bitcoin’s unspent transaction output (UTXO) model, offering a more streamlined approach compared to BRC-20s. However, some Bitcoin core developers have expressed concerns, criticizing the Runes protocol for potentially exploiting vulnerabilities within the Bitcoin network.

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