Category: Cryptocurrency

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Bitcoin’s forthcoming ‘halving’ is on the horizon, prompting a need-to-know exploration. Here’s a breakdown of what awaits:

What is Bitcoin Halving and Why Is it Significant?

Bitcoin “halving,” occurring approximately every four years, directly affects bitcoin production. Miners, utilizing specialized computers to solve complex mathematical puzzles, receive a fixed number of bitcoins as a reward upon completion.

As the name suggests, halving cuts this fixed income in half, thereby reducing the influx of new bitcoins into the market. Consequently, the supply of available coins grows more gradually, aligning with bitcoin’s fundamental characteristic of limited supply. With only 21 million bitcoins ever to exist and the majority already mined, scarcity becomes a defining feature.

The reduction in supply can potentially drive up bitcoin prices, assuming demand remains steady or increases relative to supply. However, predicting future price movements remains uncertain, as past performance does not guarantee future results.

How Frequently Does Halving Occur?

According to Bitcoin’s code, halving takes place after the creation of every 210,000 “blocks” during the mining process, roughly translating to a four-year interval. The next halving is anticipated to unfold imminently.

Will Halving Impact Bitcoin’s Price?

The impact on bitcoin’s price remains speculative. Historically, following previous halvings, bitcoin’s price experienced mixed short-term reactions, eventually surging significantly one year later. Nonetheless, market conditions beyond halving contribute to these fluctuations.

The current halving arrives on the heels of a bullish year for bitcoin, with prices doubling compared to the previous year. Factors such as the introduction of spot bitcoin ETFs and persistent demand may further influence bitcoin’s trajectory.

What About Miners?

Miners face the challenge of adapting to reduced rewards while managing operational costs. Efficiently prepared miners may weather the transition better, but struggling firms might encounter difficulties.

Consolidation within the mining industry is probable, a trend exacerbated by previous market downturns. Larger miners may expand operations, leveraging technological advancements for efficiency gains.

What About the Environment?

Bitcoin mining’s environmental impact stems largely from energy consumption. While recent trends indicate a shift towards cleaner energy sources, concerns persist regarding reliance on pollutive energy.

The looming halving might incentivize miners to seek cheaper, albeit less environmentally friendly, energy sources. Additionally, some firms may explore low-cost energy regions, potentially deploying inefficient mining rigs.

In essence, Bitcoin’s upcoming halving carries implications for its economy, environment, and industry landscape, yet its exact outcomes remain uncertain amidst the dynamic cryptoverse.

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Bitcoin rebounded following a period of heightened geopolitical tension, which initially triggered sharp declines in cryptocurrencies.

The digital asset experienced a temporary drop of over 6% to $59,643 on Friday but later stabilized, reaching $64,640 by 10:55 a.m. in New York. Other tokens like Ether, Solana, and the meme-crowd favorite Dogecoin also regained stability.

Israel’s retaliatory strike on Iran, occurring less than a week after Tehran’s rocket and drone attacks, caused ripples across global markets. Reports indicating the safety of nuclear facilities in Isfahan, Iran, helped alleviate some concerns. Traditional safe-haven assets such as bonds, gold, and the dollar saw reduced gains, while stocks recovered from session lows.

The ongoing conflict in the Middle East is overshadowing the anticipated Bitcoin halving scheduled for later on Friday, which will reduce the token’s new supply. Historically, halvings have driven up the price of Bitcoin. However, with Bitcoin reaching a record high in mid-March before the event, there are doubts about whether the expected impact is already factored into the market.

Stefan von Haenisch, head of trading at OSL SG Pte, suggested that continued violence between Israel and Iran could prompt a general risk-off sentiment across the crypto market. Nonetheless, he noted that it might require a substantial downward movement to reverse the bullish sentiment surrounding the halving.

Strategists from JPMorgan Chase & Co. and Deutsche Bank AG have indicated that the quadrennial halving is already largely priced in by investors. Ahead of the event, a series of three-month-old spot-Bitcoin exchange-traded funds in the US have recorded five consecutive days of net outflows.

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Bitcoin bounced back from sharp losses triggered by escalating geopolitical tension, regaining ground as the situation eased. After plummeting over 6% to $59,643 earlier on Friday, the digital asset stabilized around $64,450 as of 8:53 a.m. in London. Other cryptocurrencies like Ether, Solana, and Dogecoin also found stability.

Israel’s retaliatory strike on Iran, following Tehran’s recent rocket and drone attacks, rattled global markets. However, reports reassuring the safety of nuclear facilities in Isfahan helped alleviate some concerns. Traditional safe-haven assets like bonds, gold, and the dollar pared gains, while stocks and US equity futures recovered from session lows.

Amidst the Middle East conflict, the spotlight remains on Bitcoin’s halving event scheduled for later on Friday, which will reduce new token supply.

Historically, halvings have driven up the price of Bitcoin. However, this time, Bitcoin hit a record high in mid-March prior to the event, raising questions about whether its potential impact has already been factored into the market.

Stefan von Haenisch, head of trading at OSL SG Pte, noted that ongoing Israel-Iran violence could create a “general risk-off sentiment across crypto.” Nonetheless, he believes it would require a “significant move lower” to reverse the bullish sentiment surrounding the halving.

Analysts at JPMorgan Chase & Co. and Deutsche Bank AG have suggested that the quadrennial halving is already largely priced in by investors. Ahead of the event, a group of three-month-old spot-Bitcoin exchange-traded funds in the US have witnessed five consecutive days of net outflows.

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Coinbase, the prominent cryptocurrency exchange, is making a strategic move by relocating its New York office from Hudson Yards to One Madison in Manhattan’s Flatiron District. The decision comes as part of a larger plan to expand its workspace, according to a source familiar with the matter who spoke to The Block.

The Commercial Observer recently reported on Coinbase’s new rental agreement, which entails an eleven-year lease for a 67,208-square-foot space at One Madison. This marks a significant upgrade from its previous office at 55 Hudson Yards, which the company has leased since 2021.

While Coinbase has not publicly commented on the reason for the relocation, sources indicate that the new office space is approximately twice the size of its Hudson Yards location. However, there are no immediate plans to change the company’s remote-work policy or increase its New York-based team size.

Coinbase’s headcount has remained relatively stable this year, with 3,416 employees as of the end of 2023. It remains uncertain whether Coinbase will terminate its existing lease at Hudson Yards or wait for it to expire.

Although specific rental costs for One Madison were not disclosed by Coinbase, recent deals in the building suggest premium rates. In comparison, the average asking rents at Hudson Yards are slightly lower, reflecting the competitive real estate landscape in Manhattan.

Coinbase’s move coincides with favorable market conditions for tenants, as Manhattan landlords are offering concessions to address high office vacancy rates. Despite regulatory challenges in the past, Coinbase’s financial performance has improved, with the company posting profits in the first quarter of 2024 amid a surge in cryptocurrency prices.

This relocation is part of Coinbase’s broader strategy, as the company continues to expand its footprint. In addition to the New York office move, Coinbase also secured a 40,000-square-foot space in California’s Bay Area last summer.

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Tether, the issuer of the world’s largest stablecoin, is undergoing a reorganization to reflect its expansion into various aspects of the digital asset space. The company has formed four divisions – Data, Finance, Power, and Edu(cation) – to signify its broadening focus beyond stablecoins.

According to Tether, these divisions represent its diversified mission, with each division serving a distinct purpose. The Data division will handle strategic investments in technology, including artificial intelligence (AI). Finance will oversee the USDT stablecoin, which boasts a market cap exceeding $100 billion and holds a significant role in crypto markets. Power will encompass investments in bitcoin (BTC) mining, while Edu will focus on educational initiatives.

The establishment of these divisions marks a paradigm shift in Tether’s approach, signaling its commitment to financial empowerment and sustainable solutions. Tether aims to adapt to the evolving needs of individuals, communities, and economies by investing in responsible Bitcoin mining, AI infrastructure, and decentralized communication platforms.

While Tether has already been active in these areas, the formation of distinct divisions underscores its growing emphasis on interests beyond its flagship stablecoin. In the past year, the company has made investments in BTC mining operations in Uruguay, a payment processor in Georgia, and AI initiatives through partnerships with data cloud provider Northern Data Group.

Despite its expansion efforts, Tether continues to face scrutiny over the transparency of the reserves backing USDT. The company’s commitment to transparency and accountability remains a subject of ongoing discussion within the crypto community.

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Crypto exchange Binance is reportedly contemplating a comeback to India’s market after being banned in late 2023, with the potential re-entry subject to a penalty of around $2 million, as per the Economic Times report on Thursday.

The platform’s prospective return hinges on its registration with the finance ministry’s Financial Intelligence Unit (FIU), responsible for overseeing virtual asset commerce. Binance intends to comply with relevant legislation, including the Prevention of Money Laundering Act (PMLA) and the crypto taxation framework, after previously neglecting these regulations, according to a source cited by the outlet.

While physical presence in India is not mandatory, all virtual asset service providers (VASPs) are subject to Indian regulations, as clarified by the Ministry of Finance. This includes compliance with reporting, record-keeping, and other obligations outlined in the PMLA.

India has been actively integrating the crypto sector into its financial system, introducing regulations last March mandating Know Your Customer (KYC) data collection from crypto companies. Additionally, VASPs with Indian operations, regardless of their location, must register as reporting entities with the FIU and adhere to the PMLA.

Prime Minister Narendra Modi has advocated for global regulations governing cryptocurrencies, underscoring India’s commitment to regulatory clarity in the crypto space.

Before its ban, Binance reportedly held a dominant market share in India, accounting for nearly 90% of the estimated $4 billion in cryptocurrency holdings among Indian citizens. Its popularity was attributed to its non-compliance with Indian tax regulations, as it facilitated trading without the 1% tax deducted at source (TDS) levied by registered exchanges. The introduction of the TDS prompted a significant migration of users to offshore crypto exchanges, including Binance.

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Social media indicators are signaling a shift toward bearish sentiment among cryptocurrency enthusiasts regarding the future trajectory of Bitcoin’s price.

Historically, periods of bearish sentiment in the crypto community have often coincided with market bottoms, reflecting a sentiment that aligns with American poet and novelist Charles Bukowski famously asserted that the masses are consistently mistaken, and true wisdom lies in taking actions divergent from the crowd. 

This principle applies to Bitcoin as well, as the current prevalence of bearish sentiment suggests the possibility of a reversal in the ongoing sell-off of BTC prices.

Blockchain analytics platform Santiment noted a decrease in mentions of “bull market” or “bull cycle” on crypto social media platforms since late March, coupled with a consistent rise in references to “bear market” or “bear cycle.” This shift in sentiment may indicate a possible reversal in Bitcoin’s price trajectory.

Santiment’s Social Trends indicator, which monitors discussions across platforms like Telegram, Reddit, and 4Chan, has observed a decrease in “buy the dip” mentions, indicating waning hopes among retail investors for a quick recovery and continued bull run.

Factors such as diminishing expectations of Federal Reserve interest-rate cuts, heightened geopolitical tensions, and the timing of U.S. tax payments have contributed to bitcoin’s recent price decline, which saw a 14% slide this month.

Despite these challenges, bitcoin’s blockchain is set to undergo its fourth mining reward halving, reducing the per-block BTC emission by 50% to 3.125 BTC. While some analysts, including JPMorgan, have warned of a potential further decline in prices following the event, the overall consensus remains bullish for Bitcoin’s long-term prospects.

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Cryptocurrency exchange Kraken has acquired TradeStation Crypto, the digital asset-focused division of online brokerage TradeStation, to expand its regulatory licensing and presence in the United States.

TradeStation Crypto, based in Florida, has obtained money transmitter and other regulatory licenses across most U.S. states in recent years. Kraken’s acquisition of TradeStation Crypto marks a strategic step to accelerate its growth and introduce new product offerings in the U.S. market.

A spokesperson for Kraken confirmed the acquisition, stating that it aligns with the company’s objectives to enhance its footprint in the U.S. market. However, the spokesperson declined to disclose the financial details of the transaction.

The acquisition comes after TradeStation Crypto faced regulatory challenges, including a $3 million settlement with the U.S. Securities and Exchange Commission over a lending service. After this incident, TradeStation’s parent company withdrew from the cryptocurrency space.

TradeStation Crypto gained attention for its involvement in Miami Mayor Francis X. Suarez’s initiative to establish the city as a crypto hub. Notably, the company commissioned the Miami Bull, an 11-foot, 3,000-pound statue unveiled by Mayor Suarez in early 2022.

In addition to its U.S. expansion, Kraken has been making strides in the European Union. The exchange recently announced the acquisition of Netherlands-based crypto firm BCM and secured virtual asset service provider licenses across the region as part of its ongoing growth strategy.

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Bitcoin maintains its position above the significant threshold of $60,000, marking a resurgence amid recent dips that saw it hit six-week lows. Short-covering activity has been notably active, contributing to this upward trend.

Despite recent corrections, Bitcoin continues to assert its dominance within the cryptocurrency market, attracting investors who are turning away from riskier currencies. Additionally, a slowdown in US 10-year treasury yields has provided further support and bolstered sentiment towards cryptocurrencies.

Today, Bitcoin saw a notable rally of 2.9% on Bitstamp, reaching $63,046 from a session low of $60,830. This recovery comes after a 4% decline on Wednesday, the second drop in three days, when it dipped to $59,672 amidst turbulence in Wall Street markets.

The collective market value of cryptocurrencies surged by $20 billion today, surpassing $2.375 trillion, buoyed by gains in Bitcoin and Ethereum.

Bitcoin’s dominance has strengthened as other AI-linked cryptocurrencies experienced declines in recent weeks. Its market share has risen to 55%, marking an increase of 1.35% last week and 2.5% in March, largely due to an influx of new investments.

Anticipation surrounding Bitcoin’s upcoming halving event has driven Google searches to record highs, surpassing the interest levels seen during the 2020 halving.

Meanwhile, US 10-year treasury yields have receded from their recent five-month highs, falling to 4.696%. This decline has provided support for non-yielding assets like Bitcoin.

As the market awaits further guidance on US interest rates, Crypto.com‘s CEO anticipates a wave of selling leading up to the halving event. However, in the long run, this event is expected to have a positive impact and add value to the cryptocurrency market.

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