Crypto hits a wall

Dogecoin came in for a landing – in a fogbank – with the debate about the future of Twitter and payments and crypto all only just now getting underway. DOGE, the eighth-largest coin, nearly tasted fifteen cents yesterday but this morning sits closer to thirteen. DOGE may have fallen, and the charts are mostly red, but Bitcoin is holding steady, flat, at $20,400, as of 8:45 a.m. (EST).

Now the forces of Elon Musk, who is under fire for floating an $8-per-month verification fee on Twitter, could soon clash with macroeconomic policymaking as the U.S. Federal Reserve possibly contemplates making a dovish pivot, maybe even slowing down rate hikes by as early as December.

Among the bucket of Top 30 coins, Litecoin is leading the way with a 7% increase over 24 hours to $59.25. LTC ranks as CoinGecko's 21st-largest digital asset as measured by total market capitalization. Just before 9 a.m. (EST), LTC looked like the lone speck of green but when we scrolled further down the list of Top 100 coins we saw No. 91 Basic Attention Token rocking a 4.4% gain since this time yesterday.

Ethereum fell 2.7% to about $1,550. That was over 24 hours as of 9 a.m. (EST). Bitcoin was -0.7% in that span. Dogecoin lost 7.5%. Meme rally fuel is not inexhaustible, and understandably can get depleted.

Which brings us to why that slight ETH decline seems so curious. Recent ETH price moves appear to be driven by derivatives markets where, CoinDesk said, citing Citi analysts, open interest has risen to the highest levels since April, when the second-largest crypto was trading at around $3,000. Note that Ethereum’s circulating supply was growing at that time. But not anymore.

Citi says the switch to PoS has removed about 564,000 ETH from circulation in the six weeks since the Merge.

“Ether looks like it could be moving towards a deflationary future," the analysts wrote.

In his seminal academic tome, "The Bitcoin Standard: The Decentralized Alternative to Central Banking," Saifedean Ammous focuses heavily on the concept of "sound money," or currency that holds its value over time.

The Bitcoin network's ability to store and grow value over time is directly tied to (depending on whom you might ask) "productive" activity, or, more specifically, computational expenditures involved with running proof-of-work (PoW) mining algorithms, perpetually, around the globe. Skeptics are often quick to pounce on this core concept, asking, with regards to hash power allocations, SO WHAT?!

Turns out, there's a handy price metric, the Bitcoin Yardstick, which measures the network's inherent staying power versus its worth in the market, providing at least a basic, back-of-the-envelope way to examine relative value.

Invented by Capriole CEO Charles Edwards, the BTC yardstick measures the ratio of BTC market cap – gutted by three-fourths since last year – to hash rate, which, at the moment, sits near all-time highs.

According to Edwards, his yardstick metric is now at its second lowest level in history. As Edwards explained to Cointelegraph, the lower the yardstick's value, the “cheaper” Bitcoin is.

Presently, more hash rate is being applied to secure low-priced coins. Thus, he said, much of the unrealized value lies in the amount of work done to secure the BTC supply during price suppression. Given the amount of energy being used on what could be considered the most powerful computer network in the world, the price of BTC is, on a relative basis, as Edwards put it, "extraordinarily cheap."

Still, despite rising hash rate, miners remain under considerable stress as low, rut-stuck price levels squeeze profit margins.