Archive for the ‘Bitcoin’ Category

BTC tops $47k as CNBC predicts Wednesday Bitcoin ETF approval – CryptoSlate

The price of Bitcoin (BTC) surpassed $47,100 on Jan. 8 amidst expectations of spot Bitcoin ETF approvals over the coming days.

Bitcoin was priced at $47,162 at 7:15 p.m. UTC. At the time, its market cap is roughly $918 billion.

The latest high represents daily gains for Bitcoin and other top-ten crypto assets. Bitcoin (BTC) is up 6.2% over 24 hours, while Ethereum (ETH) is up 4.8% over the same period. Additionally, Cardano (ADA) is up 4.6%, Avalanche (AVAX) is up 2.6%, Solana (SOL) is up 3.8%, and XRP is up 2.0%. The entire cryptocurrency market is up 4.0% over a 24-hour period.

Bitcoins current value represents a 21-month high not seen since April 2022. In May 2022, shortly after that previous high, an extended market crash occurred following collapse of TerraUSD and various crypto lending services. The markets long-term price recovery began in January 2024 and has continued until today.

Though numerous factors affect Bitcoins price, optimism around the likely approval of a spot Bitcoin exchange-traded fund (ETF) may be one factor.

CNBC, notably, reported at 3:54p.m UTC that multiple ETFs are expected to be approved in the coming days based on two sources close to the matter. The news outlet said that the funds will likely be approved on Wednesday, Jan. 10 and that trading will likely begin on Thursday, Jan. 11, or Friday, Jan. 12.

Other positive news around ETFs has also emerged. Standard Chartered predicted that Bitcoin ETFs could bring $50 billion to $100 billion of inflows into the crypto market throughout 2024. VanEck bought $72.5 million of Bitcoin to seed its ETF, while Grayscale and other companies entered a fee war to offer competitive rates.

SEC Chair Gary Gensler warned about Bitcoin investments, implicitly hinting about new crypto products despite his negative tone.

Previous weeks have seen the U.S. Securities and Exchange Commission (SEC) meet with asset managers and accept amendments from those applicants, which are important steps toward product approvals.

Any of those events and countless others may have affected investor sentiment, driving up demand for Bitcoin and, in turn, its market value.

At the time of press, Bitcoin is ranked #1 by market cap and the BTC price is up 6.09% over the past 24 hours. BTC has a market capitalization of $919.75 billion with a 24-hour trading volume of $42.53 billion. Learn more about BTC

BTCUSD Chart by TradingView

At the time of press, the global cryptocurrency market is valued at at $1.73 trillion with a 24-hour volume of $87.67 billion. Bitcoin dominance is currently at 53.20%. Learn more

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BTC tops $47k as CNBC predicts Wednesday Bitcoin ETF approval - CryptoSlate

Bitcoin gets boring and why that’s a good thing for Wall Street – DLNews

A version of this story appeared in our The Guidance newsletter. Sign up here.

GM, Joanna here!

Bitcoin is getting boring.

As the crypto world breathlessly awaits the approval of a spot Bitcoin exchange-traded fund, Bloomberg reports that a startup of Citigroup alumni has launched a depositary receipt for Bitcoin.

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That might not sound very sexy, but bear with me it says volumes about where crypto is headed in 2024.

In short: the TradFi creep is real and its coming.

Lets get the technical details out of the way.

Depositary receipts give US investment companies exposure to foreign companies, but in a way that feels safe and familiar.

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How do they do that?

What does that have to do with Bitcoin?

The startup, Receipts Depositary Corporation, is planning to offer an instrument that looks like a depositary receipt but provides direct ownership of Bitcoin.

RDC said the underlying assets will be safeguarded at licensed custodian bank Anchorage Digital, and cleared through the DTC.

The depositary receipts dont go through the same Securities and Exchange Commission approvals process as ETFs do, as they are covered by a regulatory exemption.

They are limited, however, to institutional investor clients this is not a retail product.

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Why is a Bitcoin depositary receipt important?

If this all sounds a bit dry, thats the point. Institutional investors such as banks and pension funds like dry.

Wall Street has spent the past decade talking a big game about innovation, but really these firms are too heavily regulated to move fast into new asset classes.

While hedge funds trading their own money have a foothold in crypto, Bitcoin has remained too risky for, say, pension funds managing the retirement savings of teachers and firemen.

Volatility, regulatory uncertainty, cybersecurity concerns, and a lack of market structure that feels safe and familiar are all deterrents.

But pensions and endowments represent potentially huge inflows of money one of the reasons theres so much excitement about the prospect of ETFs.

The Bitcoin depositary receipts are an answer to the question: How do you get direct ownership without the hassle of taking physical possession of the asset?

Thats what David Easthope, a senior analyst who heads up the market structure and technology team at Coalition Greenwich, told me.

With these receipts, you dont have any of the hassle of counterparty risk or cybersecurity. You are not controlling the physical asset. You dont have to worry about your private key, your wallet, [or if you will] participate in staking if you offer a product for Ethereum, Easthope said.

Firms dont want the headache of selecting and onboarding a custodian to safeguard the asset, he added.

They just want to have 0.5% or 1% of the endowment or whatever to have access to Bitcoin, but without having to bring on a new technology vendor.

Whether depositary receipts or spot ETFs, for that matter are good solutions remains to be seen. Investors will vote with their dollars.

But RDCs product is one more sign that capital markets firms are laying claim to crypto.

Email me joanna@dlnews.com or Telegram @joannallama.

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Bitcoin gets boring and why that's a good thing for Wall Street - DLNews

Lazarus withdraws $1.2m Bitcoin from crypto tumbler – crypto.news

Notorious cybercriminal group Lazarus seems to be moving stolen Bitcoin after siphoning over $600 million from crypto protocols and users in 2023.

The North Korean-funded hacker organization withdrew some 27.3 Bitcoin (BTC) worth an estimated $1.2 million from an unidentified crypto mixer. Per Arkham Intelligence data, Lazarus cashed out its ill-gotten BTC over two transactions on Jan. 8.

A Lazarus wallet received 10 BTC valued at $440,000 and 17.3 BTC worth $762,000 from a contract address. Shortly thereafter, the receiving address transferred 3.3 BTC to another address holding just under $300,000 in Bitcoin.

The hacker group holds $79 million in illicit wealth in wallets labeled by Arkham. Bitcoin, Ether (ETH), and Binances BNB comprised the top three assets held by Lazarus, which reportedly orchestrated a third of all crypto hacks last year.

Crypto users throw their cryptocurrencies into mixers or tumblers to obfuscate the origin of the assets. Bad actors often leverage the process to cover their blockchain footprints following a hack or an exploit.

In the past, Lazarus sent stolen digital assets to services like Tornado Cash, Sinbad, and Blender.io. However, authorities in the U.S. have blacklisted some of these platforms and even levied charges against their creators.

Tornado Cash developer trio Alexey Pertsev, Roman Semenov, and Roman Storm currently face money laundering and conspiracy charges in the U.S. and the Netherlands. All three individuals deny wrongdoing, and industry proponents argue that open-source protocol inventors should not be held liable for third-party applications.

District Judge Katherine Polk Failla threw out a lawsuit against Uniswap, which sought damages and restitution from the decentralized exchange due to losses incurred from trading scam tokens.

The ruling might be regarded as a boon by crypto participants and defendants battling defi-related charges in courthouses across the globe, although a district court judge sided with the U.S. Treasury Department in a lawsuit that involves Coinbase and sanctions imposed on crypto mixer Tornado Cash.

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Lazarus withdraws $1.2m Bitcoin from crypto tumbler - crypto.news

Gary Gensler issues warning on crypto ahead of potential spot Bitcoin ETF approval – Cointelegraph

United States Securities and Exchange Commission Chair Gary Gensler posted a thread on social media platform X (formerly Twitter) as many asset managers await the final word on approval or denial of their spot Bitcoin (BTC) exchange-traded fund applications.

In a Jan. 8 X post, Gensler called on crypto investors to keep some things in mind without specifically mentioning a spot Bitcoin ETF. According to the SEC chair, asset managers may not be complying with federal securities laws by offering crypto investment vehicles, and crypto can be exceptionally risky and often volatile.

Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams, said Gensler. These investments continue to be replete w/ fraud- bogus coin offerings, Ponzi & pyramid schemes, & outright theft where a project promoter disappears w/ investors money.

The SEC chairs remarks at 3:40 pm UTC came roughly two hours after several spot Bitcoin ETF issuers filed amended S-1 applications with the commission one of the last moves toward potentially approving the investment vehicle in the United States. Though its uncertain at the time of publication whether the SEC will approve one or many at the same time, applications are in for Valkyrie, WisdomTree, BlackRock, VanEck, Invesco and Galaxy, Grayscale, ARK Invest and 21Shares, Fidelity, Bitwise and Franklin Templeton.

Related: SEC reissues crypto FOMO warning amid hope for spot Bitcoin ETFs

Many have criticized Gensler for the SEC not approving a spot crypto ETF despite years worth of applications from numerous asset managers. Regulators in Canada allowed firms to list spot Bitcoin ETFs on exchanges starting in 2021.

The S-1 filings on Jan. 8 were expected part of a deadline from the SEC following many 19b-4 filings on Jan. 5. While both suggested a forward move for the SEC to allow crypto ETF listings on U.S. exchanges, they do not guarantee approval.

The commission still has the option of denying applications, but it would likely need to do so for different reasons than it previously used for other ETFs. In August, a federal judge ordered the SEC to revisit a spot BTC ETF application from Grayscale, claiming the commission was arbitrary and capricious in denying the investment vehicle.

Magazine: 10 best long reads about crypto in 2023

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Gary Gensler issues warning on crypto ahead of potential spot Bitcoin ETF approval - Cointelegraph

Why cant more Texans profit like Bitcoin miners for using less power? – The Texas Tribune

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When the news broke that Bitcoin mining company Riot Platforms made $32 million by reducing or being willing to reduce if needed its energy use last August in Texas, the outrage was immediate.

The states grid operator had frequently asked Texans to conserve electricity during sweltering summer heat, and many saw their power bills soar as they tried to stay cool. Meanwhile the state grid operator and an electricity provider effectively gave millions to a company whose industry is notorious for using gobs of electricity.

Riot made that giant sum of money because of how the states electricity market is designed. Companies that use large amounts of power, such as manufacturers or petrochemical plants, have long profited in similar ways.

There are two ways that large power users can make money on the states main power grid, according to industry experts. The Electric Reliability Council of Texas, which operates the grid, pays large industrial users that promise to reduce their power consumption as needed, giving ERCOT some wiggle room in case a power plant unexpectedly fails or power demand is higher than forecast.

A company such as Riot also can profit by buying power at negotiated rates ahead of time retail power companies allow big companies to lock in prices that way then selling it back into the state market when energy prices soar during extreme heat or cold. In Riots case, when electricity prices soared during the summer heat wave, Riot sold power back to TXU, a Dallas-based electricity provider, which sold it back to the grid.

In a September statement, Riot characterized its actions as helping to stabilize the grid.

Riots windfall highlighted for everyday power consumers just how much the Texas market can benefit businesses. Critics saw particular problems with cryptocurrency.

Lee Bratcher, president of the Texas Blockchain Council, a group promoting cryptocurrency growth and innovation in Texas, said in an email that cryptocurrency operations can benefit the grid because they are able to reduce or completely shut down their operations quickly.

Bitcoin miners can use excess power overnight and on days where demand is normal, and they can turn off on very hot or very cold days when power is scarce and electricity prices are high, Bratcher said in an email.

But Mandy DeRoche, deputy managing attorney in the clean energy program at Earthjustice, a nonprofit environmental law group, said crypto mining businesses shouldnt be praised for reducing power on the grid when they are using so much to begin with.

I think that the rewards for their behavior are so lucrative and unfair, DeRoche said, adding, Its like were bending over backwards to give money to the (crypto) miner for putting the strain on the grid and the system in the first place.

China, which was one of the largest crypto mining hubs in the world, banned crypto mining in 2021, concerned about virtual currencies being used for criminal activity and disrupting financial systems. Cryptocurrency operations began opening in Texas, which as of March was home to five of the 10 largest Bitcoin mines in the U.S., according to an April investigation by The New York Times.

Some industry experts have advocated for Texas residents to be able to reap the same sort of benefits for using less power at critical times. Called demand response, its a way for power companies to pay or credit customers who agree to reduce their power usage when demand is high, by adjusting their thermostats or timing their energy-intensive activities like charging electric vehicles or running pool pumps at times when power demand is low.

Electricity providers such as Austin Energy and Reliant already have programs that pay customers to let the providers adjust their smart thermostats when necessary but the benefit is small. For residential customers, that typically translates to one-time bill credits that can range from $25 to $85.

Ed Hirs, a University of Houston lecturer and energy market expert, said hes worried that more Bitcoin mines coming to the state will mean higher electricity prices for Texans.

Why cant I get $5 a kilowatt an hour for shutting down my power? Hirs said. Why are these guys getting a sweetheart deal?

This summer, one of the hottest in recorded Texas history, Fort Worth resident Terri Rimmer said she conserved because she feared power being cut altogether. Rimmer remembers losing electricity for five days during the deadly 2021 winter storm, when ERCOT called for power cuts to millions of Texans because power generators failed in the extreme cold and the remaining power sources couldnt keep up with the high demand.

Rimmer said temperatures dropped as low as 25 degrees inside her home during the power outage. She bundled up in layers of clothing and blankets and shared her bed with her cat to stay warm.

That month, a Bitcoin mine that Riot Platforms acquired, Whinstone, received a $125 million windfall by selling power back to the grid, according to an investigation by the Tech Transparency Project.

This summer, when ERCOT warned of tight grid conditions because of unprecedented power demand, Rimmer, 57, turned off her air conditioning, closed her blinds and blackout curtains and put an ice pack on her chest to try to stay cool. Sweat glistened on her face.

"I wasn't like this before, Rimmer said. I didn't conserve until that winter storm hit. It's truly traumatizing. For me it changed how I do things."

According to Bratcher, there are more than 20 industrial-scale Bitcoin mining operations in Texas that can collectively consume up to 2,300 megawatts of energy a day enough to power about 460,000 homes during times of high demand in Texas. They house computers that run constantly to produce cryptocurrencies, decentralized digital currencies used as alternatives to government-backed, traditional currencies.

Crypto miners essentially compete to solve complex math problems that, when verified, produce one Bitcoin or other cryptocurrency that the companies can either hold as an asset or sell. The more computers they have and the longer they run, the better their chances of solving the problem the fastest.

Essentially every miner is running the exact same algorithm, and it really is just a matter of luck, said Samantha Robertson, a member of the corporate strategy team for Bitdeer, another Bitcoin company with an operation in Rockdale. In order to increase your chances, it makes sense to have these computers running at scale.

But if the value of Bitcoin is low and the cost of electricity is high, crypto companies can make more money selling power than mining Bitcoin. In August 2023, Riot reported selling 300 Bitcoins for a net proceeds of $8.6 million. Meanwhile, the company said it earned $24.2 million in credits to its electric bill for selling power back to the grid.

In September 2023, Riot said it earned $9 million in net proceeds from Bitcoin sales and $11 million in credits for selling power back to the grid.

Robertson said Bitdeer and other cryptocurrency companies are not doing anything different than other industries by selling power back to the grid when demand and prices rise.

Quite frankly were just playing by those rules, Robertson said.

Because of how much power cryptocurrency mines use and how quickly they can reduce their power consumption which can help relieve stress on the grid when demand is high it is important for ERCOT to work closely with them, ERCOT President and CEO Pablo Vegas said in a September interview.

I'm interested in their operating characteristics, Vegas said.

The electricity-selling agreements between retail power companies like TXU and cryptocurrency businesses like Riot arent public, so its difficult to discover exactly how the companies are benefiting from the current ERCOT rules, said DeRoche, of EarthJustice.

There's very little regulation, there's no reporting standards, DeRoche said during a September virtual press conference featuring cryptocurrency opponents from different organizations. It makes it difficult to track and to get a complete picture of the total impacts.

Eric Goff, a member of an ERCOT task force that was formed to help manage power demand from large industrial users, said ERCOT has proposed rules to have large power users such as Bitcoin mines register with ERCOT so it could track their impacts on the grid. The rules dont have a specific deadline to be implemented, he said.

Environmental advocates also argue that there is a less energy-intensive way, called proof of stake, to create Bitcoin that doesnt require computers to run so many calculations. The Texas Coalition Against Cryptomining held a weeklong protest in October to oppose Riots plans to build a cryptocurrency operation near the Central Texas city of Corsicana. Coalition Founder Jackie Sawicky faulted crypto businesses for failing to reduce their energy use.

Why are we tolerating this? Sawicky asked in an interview. Its insane.

In Texas, at least seven electric providers, including Austin Energy, Reliant and CPS Energy, offer residential demand response programs that typically let the providers remotely adjust customers smart thermostats a few degrees during critical periods when energy demand is high. Customers have to sign up for the programs.

Other companies such as OhmConnect are working with smart plugs in homes. Don Whaley, senior advisor to business at OhmConnect, said customers can plug devices such as refrigerators, lamps and other ordinary household electrical appliances into the smart plugs, allowing the company to adjust power consumption remotely when necessary.

While tens of thousands of Texans do participate in programs where they agree to reduce energy use Austin Energy said its program has 33,000 active smart thermostats, while Reliant said 100,000 customers are enrolled in its program the amount paid to residential customers is small.

Most companies give their customers credits that reduce their electricity bills. For example, Reliant and Direct Energy give out a one-time $25 credit for enrolling in the program, Austin Energy offers a $50 credit for enrolling and a yearly $25 credit for staying, and CPS Energy customers receive an $85 enrollment credit and an additional $30 for each year they participate.

Other companies incentivize through point systems. OhmConnect customers can earn points or currency called Watts that can be traded in for real money, gift cards or to make a donation to charity. Gexa Energys Green Rewards program gives residential customers Active Saver Rewards points that customers can redeem as credits to lower their power bills.

Octopus Energy, a Houston-based retail electric provider that has a startup-feeling office with exposed brick, said its Texas customers can sign up for programs that allow Octopus to adjust smart home thermostats and electric vehicle chargers based on power prices, which allows them to offer lower-cost power.

ERCOT is also running pilot projects in the Dallas and Houston areas that let people with Tesla Powerwall batteries sell their extra electricity onto the state grid when its needed. This concept is known as a virtual power plant and works by adding up lots of small power resources to create a meaningful amount of supply.

Texas Public Utility Commissioner Will McAdams said in an August interview that ERCOT needed to use all available strategies to get power onto the grid.

It was now or never, McAdams said. We needed to get this off the ground and allow our very interested Texas consumers to better engage in the ERCOT system.

Critics such as energy consultant Doug Lewin say the Public Utility Commission needs to get to a point where it can expand the pilot projects and make the concept a permanent part of how the grid works. Lewin also urged the PUC to put regulations in place so all residential customers can benefit from reducing power use on the grid just like large customers do.

This is absolutely critical if were going to have either a reliable or affordable grid, Lewin said.

A study by the American Council for an Energy-Efficient Economy, a nonprofit research advocacy group, found that if Texas implements statewide demand response and energy efficiency programs for residential customers and businesses from 2024 to 2030, Texas could reduce peak summer electricity demand by 15 gigawatts and the peak winter demand by 25 gigawatts.

Residential load is a small thing. Whaley said. But if we start getting this general acceptance to where people go, Oh okay yeah, I can go from 72 to 78 degrees for an hour because thats what the grid needs, then you start seeing real reductions in the market, to start seeing real impact.

Alejandra Martinez contributed to this story.

Disclosure: CPS Energy, Octopus Energy, Texas Blockchain Council, The New York Times and the University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

Correction, Jan. 5, 2024 at 4:06 p.m.: A previous version of this story incorrectly stated that Bitcoin mining company Riot deleted a statement from its website that said its practice of selling electricity back to the state power grid helps to stabilize the grid.

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Why cant more Texans profit like Bitcoin miners for using less power? - The Texas Tribune