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Bitcoin 'Halving' Could Deal a $10-Billion Blow to Crypto Miners

Bitcoin ‘Halving’ Could Deal a $10-Billion Blow to Crypto Miners

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For Bitcoin enthusiasts, the upcoming halving event scheduled around April 20 is both a moment of anticipation and concern. The halving, occurring every four years, is poised to decrease miner rewards from 900 to 450 Bitcoin per day, triggering a substantial $10 billion annual revenue decline for the crypto mining industry. This drop comes right after a surge in operational costs, casting a shadow on the profitability of key players.

Impact on Mining Companies

Bitcoin 'Halving' Could Deal a $10-Billion Blow to Crypto Miners

Image Source: ft.com

Major mining companies like Marathon Digital Holdings Inc. and CleanSpark Inc. have been actively investing in new equipment and acquiring smaller competitors to soften the blow of reduced revenue. Matthew Kimmell, a digital asset analyst at CoinShares, emphasizes the critical juncture miners face, stating, “This is the final push for miners to squeeze out as much revenue as they can before their production takes a big hit.”

Historical Context and Industry Challenges

While past halving events have seen Bitcoin’s value soar, offsetting some revenue loss for miners, the current scenario is more precarious. Bitcoin’s price surge, quadrupling since November 2022, has inflated operational costs, particularly in the energy-intensive mining process. The industry now contends with fierce competition for power, notably from the burgeoning artificial intelligence sector, amplifying the challenge of maintaining profitability.

Market Dynamics and Investor Sentiment

The market sentiment around the halving event is mixed, with some traders betting on mining stocks’ decline. Data from S3 Partners LLC indicates a total short interest of about $2 billion, signaling cautious investor outlooks. Ihor Dusaniwsky, managing director of predictive analytics at S3, notes that short interest is three times higher than the U.S. average, reflecting significant market anticipation and volatility.

Shift in Mining Landscape

The mining landscape has evolved significantly since the last halving, with a notable shift of activity from China to the U.S. This shift has intensified competition for electricity, with companies like Core Scientific Inc. highlighting the challenges of securing favorable energy rates amidst stiff competition from tech giants investing heavily in data centers.

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Future Prospects and Regulatory Considerations

As the industry navigates revenue challenges post-halving, attention is also turning towards regulatory developments. Striking a balance between sustainability, profitability, and regulatory compliance will be crucial as the crypto mining sector adapts to the evolving landscape shaped by halving events and market dynamics.

In conclusion, while Bitcoin’s halving event carries significant revenue implications for miners, it also underscores broader industry challenges and the need for strategic adaptation amid a dynamic and competitive market environment.

Bitcoin climbs above $59,000, nears record high

Bitcoin Climbs Above $59,000, Nears Record High

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Bitcoin made a staggering surge on Wednesday, breaching the $60,000 mark and edging tantalisingly close to its all-time high. The enthusiasm for the world’s largest cryptocurrency soared to levels reminiscent of the 2021 boom, as Bitcoin climbed to as high as $63,900. However, the excitement was tempered by reports of users experiencing account balance discrepancies on the popular cryptocurrency exchange Coinbase.

Coinbase Glitch Tempers Bitcoin's Ascent

Bitcoin climbs above $59,000, nears record high

Image Source: decrypt.co

Amid Bitcoin’s meteoric rise, some users of Coinbase encountered a worrying scenario as their account balances displayed $0. Coinbase swiftly acknowledged the issue, attributing it to a surge in traffic. Despite initial concerns, Coinbase assured users that their assets remained safe. CEO Brian Armstrong took to social media to address the situation, emphasizing the team’s efforts to rectify the technical glitches.

Before the Coinbase hiccup, Bitcoin was steadily approaching its all-time high of $68,789, set in November 2021. Ryan Rasmussen, a senior crypto research analyst for Bitwise Asset Management, noted the resurgence of crypto following the tumultuous market events of 2022, indicating a renewed investor interest in digital assets.

Riding the Wave of Excitement

Bitcoin’s ascent coincides with the introduction of spot bitcoin exchange-traded funds (ETFs) in January, which have provided mainstream investors with broader exposure to the digital asset. Optimistic forecasts predict Bitcoin reaching $125,000 by the end of 2025, reflecting a growing confidence in its long-term potential, as remarked by Benchmark’s Mark Palmer.

The cryptocurrency market has seen robust growth, with Ethereum (ETH) outperforming Bitcoin by over 4% year-to-date. The total market capitalization for all crypto assets has surged to $2.22 trillion, showcasing the expanding influence of digital currencies. The launch of bitcoin ETFs in January has seen remarkable trading activity, with net flows surpassing $6.7 billion, indicating a strong investor appetite for crypto exposure.

Expanding Market Opportunities

The surge in Bitcoin trading volume has bolstered major crypto trading platforms like Coinbase and Robinhood, despite occasional technical challenges. Moreover, Bitcoin-related stocks such as Marathon Digital (MARA) and MicroStrategy (MSTR) have experienced substantial gains, driven by strategic investments and growing institutional interest.

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Derivatives traders have also joined the Bitcoin rally, with open contracts in the bitcoin futures market reaching a record high of $25 billion. This surge in derivatives activity underscores the bullish sentiment prevailing in the options market, as investors capitalize on Bitcoin’s upward momentum.

In summary, Bitcoin’s surge to top $59,000, coupled with the impending approach towards its all-time high, signals a resurgence in investor confidence and highlights the growing mainstream acceptance of cryptocurrencies. Despite intermittent challenges, the crypto market continues to expand, offering diverse opportunities for investors seeking exposure to digital assets.

Bitcoin brings $40,000 onto the scene after more than doubling in a chaotic year

Bitcoin brings $40,000 onto the scene after more than doubling in a chaotic year

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since the year draws to a close, cryptocurrency experts are focused on the possibility that Bitcoin may reach forty thousand dollars, since the greatest digital asset has risen by over double in value.

After the 2022 crypto meltdown, the token has recovered more than 130 percent over the last 11 months, outperforming gold and stock investments. Anticipations that the United States would approve the initial spot Bitcoin exchange-traded money and the belief that the Federal Reserve will decrease interest rates in 2019 combined to produce a powerful potion.

Bitcoin brings $40,000 onto the scene after more than doubling in a chaotic year

Image Source: bnnbloomberg.ca

The rally withstood a United States operation that resulted in the imprisonment of Sam Bankman-Fried for the FTX scam and the rap charges and heavy penalties meted out to Changpeng Zhao, the founder of Binance, the leading cryptocurrency exchange.

The current surge in ETF applications and the movement to stop dubious practices encourage believers that the cryptocurrency market is developing and may eventually see broader usage.

Fiona Cincotta, a senior financial industry expert at City Index Ltd., stated that they simply require the green light for the spot Bitcoin ETF to acquire $40,000. According to her, the coin has recently lost some of its appeal since significant fluctuations in currencies and stocks drew in investors.

A Group of US Spot Bitcoin ETFs are Anticipated, says Bloomberg Intelligence

A group of American spot Bitcoin ETFs are anticipated by Bloomberg Intelligence to receive Securities & Exchange Commission (SEC) clearance in January. Although unanticipated scowls for the ETFs or a change in rate bets might topple Bitcoin, for the time being, the mood is positive.

The biggest publicly listed legal Bitcoin owner, MicroStrategy Inc., increased its holdings of the cryptocurrency by the amount of $593 million in the past month, bringing its total to almost 6.5 billion dollars. The owner of Galaxy Digital Holdings Ltd., Michael Novogratz, stated on Wednesday that Bitcoin could reach an all-time high of around sixty-nine thousand in 2021 in a year.

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Before reversing course on Friday, the price of Bitcoin hit a nearly 19-month peak of $38,834. Ether and other smaller coins gained as well. The three charts that follow show important Bitcoin developments.

The previous week, the leading indicator for Bitcoin, the weekly relative-strength index, ended above 75. Although values over 70 are thought to indicate “overbought” situations, the situation is more complicated than that. After publishing a weekly RSI of greater than 75, the token increased by an average of fifteen percent in the previous ten years, a move that would have taken it far above forty thousand dollars.

Bitcoin Falls Back to US$26,000, Ether Nears ‘Death Cross,’ While Investors Await US Jobs Report for August

Bitcoin Falls Back to US$26,000, Ether Nears ‘Death Cross,’ While Investors Await US Jobs Report for August

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Cryptocurrency markets experienced a turbulent morning in Asia as Bitcoin, Ether, and most of the top ten non-stablecoin cryptocurrencies witnessed significant declines. 

Bitcoin Falls Back to US$26,000, Ether Nears ‘Death Cross,’ While Investors Await US Jobs Report for August
Image Source: fxempire.com

Bitcoin, hovering slightly above US$26,000, retraced most of its gains triggered earlier in the week by a favorable U.S. court ruling for Grayscale Investments in its Bitcoin ETF case against the SEC. Investors worldwide are now eagerly awaiting the U.S. payroll report for August in hopes of gaining insights into future interest rate policies.

Over the past 24 hours, Bitcoin plummeted by 4.42%, reaching US$26,042.84 by 07:00 a.m. in Hong Kong. For the week, Bitcoin’s performance showed a modest decline of 0.26%, according to CoinMarketCap data. This setback can be attributed to the U.S. Securities and Exchange Commission’s announcement of a delay in the decision on seven spot Bitcoin exchange-traded fund (ETF) applications, now postponed until October. Among those anxiously awaiting ETF approval are major asset management firms like BlackRock, WisdomTree, and VanEck. However, this delay has cast a shadow on market sentiment.

Benjamin Stani, Director of Business Development at Matrixport, a Hong Kong-based digital asset broker, remarked, “The pump we had from Grayscale-SEC news is now faded.” The market had been optimistic, hoping for a swift path forward after the Grayscale ruling and raising the probability of a spot ETF approval before year-end. However, with this delay, it appears that approval is not imminent.

Ether, the second-largest cryptocurrency, faced a 3.15% drop, falling to US$1,648.76 over the past 24 hours, resulting in a weekly loss of 0.33%. Analysts are closely monitoring technical signals for Ethereum, as it appears to be approaching a ‘death cross.’ This ominous pattern occurs when the short-term average falls below the long-term trend, typically indicating further losses ahead. Currently, the short-term 50-day average stands at 1808.3, while the 200-day average is at 1802.9.

Rachael Lucas, a crypto technical analyst at BTC Markets, cautioned, “It’s essential to consider these movements in the context of broader market dynamics, as the cryptocurrency space can be characterized by rapid price shifts.” Ether’s descent into negative territory on a weekly timeframe suggests a potential short-term pullback.

Several other top ten non-stablecoin cryptocurrencies experienced losses, with Solana’s SOL taking the lead with a 5.07% dip to US$19.81, its lowest level in over six weeks. Additionally, a U.S. court dismissed a class action lawsuit against Uniswap Labs, reinforcing the decentralized nature of cryptocurrency protocols and its implications for the industry.

This ruling is seen as a victory for decentralized finance (DeFi), with potential implications for regulatory clarity. Samer Hasn, a market analyst for online brokerage XS.com, emphasized the need for striking a balance between regulation and innovation in the DeFi space.

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The total crypto market capitalization fell by 3.46% to US$1.05 trillion, while trading volume increased by 16.61% to US$37.31 billion. Meanwhile, U.S. stock futures remained relatively stable after a mixed regular trading session on Thursday.

Economic indicators suggest a mixed outlook, with strong consumer spending but signs of an economic slowdown. The Federal Reserve’s aggressive tightening campaign may pause, with the potential for interest rate hikes being reevaluated in September.

Crypto

Crypto stocks dip after bitcoin slumps to six-week low

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Shares of crypto and blockchain-related companies faced a downward trend in premarket trading on Tuesday as bitcoin, the leading cryptocurrency, experienced a significant slump, hitting a six-week low. The bearish sentiment followed news of a hack at Curve Finance, a prominent platform utilized for borrowing and trading cryptocurrencies.

crypto
Image Source: brecorder.com

Bitcoin, which commands the lion’s share of the cryptocurrency market, witnessed a 2% drop, tumbling to $28,870 in value. The market reaction was swift and widespread, affecting a range of crypto-related businesses and platforms.

Curve Finance, a decentralized finance (DeFi) protocol that enables users to lend, borrow, and trade cryptocurrencies, revealed on Sunday that it had fallen victim to a malicious hack. The company disclosed the security breach on the messaging platform “X” (formerly known as Twitter). Reports suggest that the losses from the hack could exceed $40 million, casting a shadow over the broader crypto industry.

In response to the turmoil, major players in the crypto space experienced significant declines in their stock prices during premarket trading. Coinbase, a prominent cryptocurrency exchange, saw its stock dip by 3.1%, while Bitfarms, a blockchain-farm operator, experienced a 1.1% drop in its shares.

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Crypto miners also suffered from the downturn, with companies like Riot Platforms, Marathon Digital, and Hut 8 Mining (the U.S.-listed shares of a Canadian crypto mining firm) all experiencing declines ranging from 3% to 3.35%.

Beyond individual company woes, the broader crypto industry faces additional challenges on the regulatory front. Two of the largest players in the sector, Binance, and Coinbase, are currently under scrutiny from the U.S. Securities and Exchange Commission (SEC). The regulatory uncertainty surrounding these platforms has added to the market’s anxiety, leading to a cautious approach from investors.

Moreover, the recent interest rate hikes implemented by the U.S. Federal Reserve have exerted additional pressure on risky assets, including cryptocurrencies. As the Fed tightens its monetary policy to curb inflationary pressures, investors have become increasingly wary of the high volatility and speculative nature of the crypto market.

Overall, the crypto industry finds itself at a crucial juncture, grappling with both internal and external challenges. The recent hack at Curve Finance has underscored the importance of strengthening security measures and risk management protocols across all crypto platforms. Additionally, regulatory scrutiny and macroeconomic factors continue to play a significant role in shaping investor sentiment in the market.

As the situation unfolds, market participants are likely to closely monitor developments in the ongoing investigations involving Binance and Coinbase. Furthermore, any future actions taken by central banks and regulatory bodies could have far-reaching implications for the crypto space as it seeks to find stability amidst a volatile market environment.

bitcoin

What’s behind bitcoin’s latest surge?

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In the midst of a gloomy winter at the beginning of the year, bitcoin was in bad shape after 2022 marked by falling cryptocurrency prices, company scandals, and bankruptcies.

In fewer than three months, bitcoin has regained its luster. It has outperformed other significant commodities this year with gains of over 70%, and on Wednesday, it was trading close to its highest level in nine months.

Image Source: theprint.in

The first and largest cryptocurrency has been through this before; over its 15-year existence, it has experienced both dizzying price increases and drops. Interest rates are driving the increases.

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According to six investors and analysts from the crypto and conventional finance industries who spoke to Reuters, markets anticipate that central bank increases in the cost of credit are reaching their peak, which is expected to support risky assets like bitcoin.

Other factors are also in play, such as the banking industry’s unrest and persistent but unfulfilled hopes that bitcoin will become a widely accepted method of payment. On Sunday, Bitcoin recorded its greatest week in four years and has since increased by 45% in just 12 days.

Suggestions that bitcoin is an asset resistant to risks in conventional finance have gained momentum as the failure of American firms Silicon Valley Bank and Signature Bank served to prompt the takeover of 167-year-old Credit Suisse by competitor UBS on Sunday.

According to Usman Ahmad, CEO of Zodia Markets, a cryptocurrency exchange run by the venture arm of Standard Chartered and Hong Kong-based BC Technology Group, “It’s rather narrow-minded to say that bitcoin is going to succeed because a bank failed. But confidence is almost a critical factor – confidence in the banking system has been damaged.”

Significant changes in bitcoin’s price in the past have been closely related to changes in global monetary policy. Stay-at-home investors fueled a six-fold gain for bitcoin between September 2020-April 2021 as stimulus measures inundated the worldwide financial system during the COVID-19 pandemic.

These actions, combined with growing interest in cryptocurrencies from bigger investors and businesses, led proponents of the technology to proclaim that there was less chance that it would experience the violent crashes that have historically occurred after bitcoin rallies.

Bitcoin, however, fell by over fifty percent from the all-time high of $69,000 in merely 75 days as rates started to rise as signs of rogue inflation late in 2021 drove central government agencies and banks to curtail stimulus packages.

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The decline of a significant crypto token in 2022, brought on by higher interest rates, caused the closure of significant hedge funds and crypto lenders, and a drop in bitcoin of over 65%.

Regulatory issues and the abrupt collapse of the FTX market further battered it. Despite the claims of its supporters that bitcoin is a secure haven asset in periods of economic and political stress, the disastrous year served as another warning of its susceptibility to outside shocks.