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Bitcoin hit its highest level in a year amid renewed fervor for digital assets despite a slew of challenges for the industry. The original digital currency crossed above $31,013, its 2023 peak, to reach its highest level since June 2022, Bloomberg data show. The surge brought Bitcoin to as high as $31,410 before the gain was pared. The token is up by almost 90% since the start of the year, though still more than 50% below an all-time high of almost $69,000. Other cryptocurrencies followed suit, with Ether also rallying. Its a remarkable development and show of resiliency for a market that many had written off as being on the verge of extinction following a number of high-profile and high-impact scams and company fallouts that left the industry besmirched among investors. From the ardent Bitcoiners perspective, the tokens most fundamental investment thesis is playing out: inflation, monetary mismanagement, banking crises, sovereign debt anxiety, US-dollar-reserve-status questions are all playing a role in giving Bitcoiners an I told you so moment, said Strahinja Savic, head of data and analytics at FRNT Financial. I would not describe rallying to new all time highs despite the challenging environment, but rather because of it. Most recently, its been news about BlackRock Inc s shock filing for a US spot Bitcoin exchange-traded fund thats reignited fervor for crypto, with some in the market hoping that such a product which currently doesnt exist gets approval from regulators. An approval whatever its odds would mark a win for fans who have for years longed for such an investment product. BlackRocks filing is big news for Bitcoin due to its close ties with regulators and a very strong ETF-approval track record, wrote K33s Bendik Schei and Vetle Lunde. Its also worth noting that BlackRock would not dedicate time and resources to this filing if they did not view the probability of long-term strength from BTC, and thus strong inflows, as substantially high. They added: An approval would profoundly impact the market structure of Bitcoin, as it would reduce the barriers for financial advisors to offer exposure to BTC through an accessible investment vehicle with daily creations and redemptions delivered by a trusted issuer. Other recent news also reinforced crypto believers faith in the rally. A new crypto exchange backed by firms including Citadel Securities, Fidelity Digital Assets and Charles Schwab Corp. called EDX Markets said its gone live. And, among other pieces of news, JPMorgan Chase & Co expanded one of the most high-profile projects to bring blockchain technology to traditional banking, introducing euro-denominated payments for corporate clients using its JPM Coin. The effects of the so-called crypto winter seem less persistent today than a year ago, as various jurisdictions and institutional players continue to embrace crypto-related initiatives, David Duong, head of research at Coinbase, said in a recent note. On Twitter, where a lot of crypto discourse takes place, a number of users cited FOMO or the fear of missing out as part of the recent price surge, whereby some investors jump into the market because they are watching others reap the benefits of the rally and want to take part in it. But the fact that the industry is facing harsh regulatory oversight has not dissipated, despite all the renewed hype over prices surging. The SEC has set its sights on the crypto space following last years numerous instances of scams and fallouts of once-vaunted companies, including FTX and a number of lenders. Its led to a mass exodus by retail investors in particular, who have collectively lost billions of dollars in the wake of the revelations and implosions. Trading volumes have dried up as a result. In May, the combined spot and derivatives trading volumes on centralized exchanges fell more than 15% to $2.4 trillion, according to CCData. Spot trading volumes alone dropped nearly 22% to $495 billion, notching the lowest monthly reading since March 2019, the researcher said in a report. Given the thin liquidity and the relatively scant amount of BTC available to new entrants (no eager sellers at these levels), even a tiny uptick in large investor interest would be enough to move the price, said Noelle Acheson, author of the Crypto Is Macro Now newsletter. Others point out that hype around a potential spot-Bitcoin ETF has come and gone in the past, without regulators ever approving such a product. People are speculating BlackRocks heft in the financial markets will help them get approval. I am not quite there yet, said Michael ORourke, chief market strategist at JonesTrading. The SEC has been aggressively cracking down on the crypto space, it seems a bit early for such an about-face.

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Bitcoin hits highest in a year as crypto rebounds from scandals - Times of India

Bitcoin boosters like to claim Bitcoin, and other cryptocurrencies, are becoming mainstream. Theres a good reason to want people to believe this.

The only way the average punter will profit from crypto is to sell it for more than they bought it. So its important to talk up the prospects to build a fear of missing out.

There are loose claims that a large proportion of the population generally in the range of 10% to 20% now hold crypto. Sometimes these numbers are based on counting crypto wallets, or on surveying wealthy people.

But the hard data on Bitcoin use shows it is rarely bought for the purpose it ostensibly exists: to buy things.

The whole point of Bitcoin, as its creator Satoshi Nakamoto stated in the opening sentence of the 2008 white paper outlining the concept, was that:

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.

The latest data demolishing this idea comes from Australias central bank.

Every three years the Reserve Bank of Australia surveys a representative sample of 1,000 adults about how they pay for things. As the following graph shows, cryptocurrency is making almost no impression as a payments instrument, being used by no more than 2% of adults.

Payment methods being used by Australians

By contrast more recent innovations, such as buy now, pay later services and PayID, are being used by around a third of consumers.

These findings confirm 2022 data from the US Federal Reserve, showing just 2% of the adult US population made a payment using a cryptocurrrency, and Swedens Riksbank, showing less than 1% of Swedes made payments using crypto.

One reason for this, and why prices for goods and services are virtually never expressed in crypto, is that most fluctuate wildly in value. A shop or cafe with price labels or a blackboard list of their prices set in Bitcoin could be having to change them every hour.

The following graph from the Bank of International Settlements shows changes in the exchange rate of ten major cryptocurrencies against the US dollar, compared with the Euro and Japans Yen, over the past five years. Such volatility negates cryptocurrencys value as a currency.

Cryptocurrencys volatile ways

There have been attempts to solve this problem with so-called stablecoins. These promise to maintain steady value (usually against the US dollar).

But the spectacular collapse of one of these ventures, Terra, once one of the largest cryptocurrencies, showed the vulnerability of their mechanisms. Even a company with the enormous resources of Facebook owner Meta has given up on its stablecoin venture, Libra/Diem.

This helps explain the failed experiments with making Bitcoin legal tender in the two countries that have tried it: El Salvador and the Central African Republic. The Central African Republic has already revoked Bitcoins status. In El Salvador only a fifth of firms accept Bitcoin, despite the law saying they must, and only 5% of sales are paid in it.

Read more: One year on, El Salvador's Bitcoin experiment has proven a spectacular failure

If Bitcoins isnt used for payments, what use does it have?

The major attraction one endorsed by mainstream financial publications is as a store of value, particularly in times of inflation, because Bitcoin has a hard cap on the number of coins that will ever be mined.

As Forbes writers argued a few weeks ago:

In terms of quantity, there are only 21 million Bitcoins released as specified by the ASCII computer file. Therefore, because of an increase in demand, the value will rise which might keep up with the market and prevent inflation in the long run.

The only problem with this argument is recent history. Over the course of 2022 the purchasing power of major currencies (US, the euro and the pound) dropped by about 7-10%. The purchasing power of a Bitcoin dropped by about 65%.

Bitcoins price has always been volatile, and always will be. If its price were to stabilise somehow, those holding it as a speculative punt would soon sell it, which would drive down the price.

But most people buying Bitcoin essentially as a speculative token, hoping its price will go up, are likely to be disappointed. A BIS study has found the majority of Bitcoin buyers globally between August 2015 and December 2022 have made losses.

The market value of all cryptocurrencies peaked at US$3 trillion in November 2021. It is now about US$1 trillion.

Bitcoinss highest price in 2021 was about US$60,000; in 2022 US$40,000 and so far in 2023 only US$30,000. Google searches show that public interest in Bitcoin also peaked in 2021. In the US, the proportion of adults with internet access holding cryptocurrencies fell from 11% in 2021 to 8% in 2022.

Read more: What is Bitcoin's fundamental value? That's a good question

UK government research published in 2022 found that 52% of British crypto holders owned it as a fun investment, which sounds like a euphemism for gambling. Another 8% explicitly said it was for gambling.

The UK parliaments Treasury Committee, a group of MPs who examine economics and financial issues, has strongly recommended regulating cryptocurrency as form of gambling rather than as a financial product. They argue that continuing to treat unbacked crypto assets as a financial service will create a halo effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.

Read more: Crypto trading: politicians who say it should be treated like gambling are completely wrong

Whatever the merits of this proposal, the UK committtees underlying point is solid. Buying crypto does have more in common with gambling than investing. Proceed at your own risk, and and dont invest what you cant afford to lose.

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Almost no one uses Bitcoin as currency, new data proves. It's ... - The Conversation

The International Monetary Fund (IMF) is changing its tune on cryptocurrency. After suggesting other countries consider banning crypto, the agency now thinks that might be the wrong move.

On Thursday, IMF economists released a report examining cryptocurrency usage across Latin America and the Caribbean. Acceptance has varied in the region with some countries, like El Salvador, being more open to adoption versus others that are more wary over the perceived risks involved. In their report, the economists leaned into a position closer to adopting cryptocurrencies, but within a well-regulated framework.

"While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run," the economists said in the report's conclusion.

This is a swift change from the IMF, which just months earlier said in another report that countries should consider banning cryptocurrencies. That view was held by a handful of directors on its board, but the consensus even then leaned towards better regulations over a ban.

In yesterdays report, IMF economists said that cryptocurrency offered a number of benefits to its adopters. They wrote that crypto offered protection against macroeconomic uncertainty, promoted financial inclusion, and faster payments among other benefits.

They also offered an analysis of recent efforts in Latin America to develop central bank digital currencies (CBDCs).

In a survey shared with officials across the region, the IMF found that half of the respondents said they were considering both retail and institutional CBDC options. What they also saw in CBDCs was a way to promote resilience in communities vulnerable to natural disasters, and create a way to boost financial inclusions in more remote ones.

Most Latin American countries are still in the research stage for CBDCs, the IMF wrote, but others have progressed to the experimental stage. The largest is Brazil, the region's economic powerhouse. Its been examining a CBDC since 2020 and has plans to launch one in 2024.

The IMF also pointed out difficulties in integrating cryptocurrencies into their economies.

In Argentina, the central bank clamped down on crypto in May by banning payment platforms from offering it to customers in the country. Even in El Salvador, which granted legal tender to Bitcoin as a way to settle transactions, the IMF found that it was struggling to become more widely used.

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IMF Capitulates on Bitcoin Bans, Says They're Not Effective - Decrypt

Major Bitcoin miners Hut 8 Mining and U.S. Bitcoin Corp are set to merge to create a North American crypto mining giant.

If all goes according to plan, the U.S.-domiciled companynamed Hut 8 Corp.will have a market capitalization of $990 million and shareholders will have equal ownership of the companys stock.

As first reported by TheMinerMag, its new hashrate of 7.5 EH/s will make it one of the biggest public Bitcoin miners in North America, according to a U.S. Securities and Exchange Commission filing. Marathon Digital (MARA) is still far and away the most dominant with 23 EH/s of installed capacity. But the post-merger company will be closer in size to Riot Blockchain (RIOT), which has 10.5 EH/s capacity.

Hashrate refers to the computational power of the network. Each hash represents a guess at a cryptographic code. The miner whose rig correctly guesses it wins the right to verify a block worth of transactions and add it to the blockchain, thereby collecting a block reward. So having a higher hashrate means more chances to collect those rewards. One exahash is equal to one quintillion hashes.

Bitcoin miners were recently hit hard by the crypto winter. A dramatic drop in the price of the largest digital asset from its $69,044 November 2021 all-time high meant some mining operations were struggling to make profit and had to flog their crypto reserves or shut down completely.

At one point, publicly traded Bitcoin miners, Marathon Digital and Riot Blockchain, had to sell more Bitcoin than they produced. Other companies closed their doors completely.

But things are on-the-up: The price of Bitcoin has surged this year, outpacing the increases in difficulty, meaning more mining companies could keep the lights on and make profit. Hut 8 Mining is one of those companiesit has a healthy supply of working capital and negative net debts, according to TheMinerMag stats.

The benefit is Hut 8 is financially healthier than many others with nearly 10,000 BTC on its balance sheet and very minimal debt, MinerMag analyst Wolfie Zhao told Decrypt.

Hut 8s current holdings stand at 9,233 BTC, worth roughly $277 million at current prices, according to Bitcoin Treasuries. The only other publicly traded miner with a larger stash is Marathon Digital, which holds 12,232 BTCworth today over $364.2 million.

The miner can also boast of not having to sell large amounts of its BTC holdings when other public miners have had to during last year's market downturn.

This merger will help it take advantage of its financial position and grow its revenue with a larger self-mining capacity and a more diversified business model, Zhao added.

Hut 8 has told Decrypt about its model of diversification: the miner has five data centers, unrelated to Bitcoin mining, which provide an income stream that's detached from crypto market prices. The miner also earlier this month signed an agreement with Canadian public health company Interior Health to handle its data center needs.

And just today, it announced an agreement to host approximately 6,400 ASIC miners to grow its capacity. It said that the new machines will increase its installed hashrate to approximately 3.2 EH/s. Hut 8 has also successfully pivoted to the world of high performance computing, or HPC. CEO Jaime Leverton previously toldDecrypt that it wanted to potentially leveraging our GPU machines to provide AI, machine learning, or VFX rendering services to customers.

The U.S. is becoming an increasingly difficult place for the crypto industry to function: The SEC has hit high-profile crypto companies with lawsuit after lawsuit and its chair has even said that the States doesnt need more digital currency.

But Bitcoin miners dont seem particularly fazed. Experts told Decrypt that regulators are more focused on what they see as unregistered securities being sold on exchanges and are unlikely to enact a nationwide ban on Bitcoin mining, like with what was seen in China.

Editor's Note: This article was updated to reflect that by the end of May, Hut 8's Bitcoin treasury was 9,233 BTC.

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A New Bitcoin Mining Giant Prepares to Enter the Fray - Decrypt

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Outspokenbitcoinmaximalist Max Keiser has made a controversial allegation, branding Ripple as a Ponzi scheme, adding that the millions of dollars spent by its CEO, Brad Garlinghouse, have failed to rescue the blockchain company.

Keiser used examples from Wall Street and the banking industry to illustrate the importance of power and money. He referred to the views of Jamie Dimon of JP Morgan who thinks that Garlinghouses significant financial resources will not be enough to compete against the might of the federal government and influential individuals.

Of course the SEC is overreaching but that wont stop them from killing off XRP and every other shitcoin. (Except BTC, of course. Its untouchable).

Because there is virtually no rule of law whatsoever in Wall St/finance for those with $ and clout. Brad Garlinghouse has been https://t.co/NwH9sH6qk8

According to reports, Ripple has set aside more than $100 million to pay for legal expenses related to their ongoing dispute with the United States Securities and Exchange Commission (SEC).

On the other hand, Keiser believes that bitcoin will remain strong and that the fate of XRP, the native currency of the XRP Ledger and a coin used by Ripple in some of its products, is already sealed.

John Deaton, a well-known lawyer who supports XRP, challenged Keisers claims about the cryptocurrency.

Deaton argued that the SEC could not destroy the XRPL coin, pointing out that the regulatory body previously debated whether bitcoin should be considered a security.

He also stated that even if Ripple were found to have done something wrong, XRP would still be successful because a regulatory classification doesnt change its fundamental nature.

Max, the SEC cant kill XRP. Im sure youre aware that in 2013-2015 some people at the SEC were calling #Bitcoin a security (which is insane). is a video of Joe Grundfest in 2015 discussing it. Dont get me wrong the SEC can and has caused damage (ie dry up liquidity) and

Deaton criticized the SEC for favoring ethereum (ETH) over other cryptocurrencies due to pressure from confident investors. He believes in a fair system that allows innovative technologies to succeed.

The legal battle between Ripple and the SEC has made the future of XRP uncertain. The differing opinions of Keiser and Deaton demonstrate the regulatory challenges faced by Ripple, XRP, and the cryptocurrency industry as a whole.

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Bitcoin maximalist claims Ripple is a "ponzi scheme" - crypto.news