<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO-820x461.jpeg" alt="" class="wp-image-562379" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/107354835-1704471188107-gettyimages-1902360932-CZECH_CRYPTO.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A neon sign indicates that Bitcoin is accepted inside the venue of the Paralelni Polis project, an organization combining art, social sciences and modern technology, in Prague, Czech Republic, on Friday, Jan. 5, 2024. Milan Jaros | Bloomberg | Getty Images</figcaption></figure>



The price of bitcoin soared past the long-awaited $100,000 benchmark for the first time ever late Wednesday evening.



The flagship cryptocurrency was last higher by more than 4% at $103,544.00, according to Coin Metrics. Earlier, it rose as high as $103,844.05. Bitcoin is now up more than 140% in 2024 and 48% since the election.



The move came hours after President-elect Donald Trump announced plans to nominate Paul Atkins as chair of the Securities and Exchange Commission, fulfilling perhaps his most important campaign promise to the crypto industry: to replace Gary Gensler, who has become something of a villain in crypto for the agency’s regulation-by-enforcement approach to the industry under his leadership.



It’s a day of celebration for longtime bitcoin investors, who have held on for dear life, or “HODL’d” through several of the cryptocurrency’s boom and bust cycles, during which government and financial institutions remained dismissive — and even hostile — toward the asset class.



That’s largely because of the cryptocurrency’s anti-establishment roots. The original idea for Bitcoin was proposed at the height of the 2008 financial crisis: a “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,” its founder, Satoshi Nakamoto, wrote in the Bitcoin Whitepaper.



In recent years, however, the industry has demonstrated the value of bitcoin to much of the institutional investing world. BlackRock, Fidelity, Invesco and others launched the first spot bitcoin ETFs at the beginning of this year — bitcoin’s “IPO” moment — and the growing demand for them by institutions has helped drive the price higher. In November, Rick Wurster, the incoming CEO of Charles Schwab, said the firm is preparing to enter spot crypto trading, pending regulatory changes expected in the next Trump administration.



On Wednesday, Federal Reserve chair Jerome Powell said bitcoin is “just like gold only it’s virtual, it’s digital,” speaking at the DealBook conference. He further clarified that “people are not using it as a form of payment, or as a store of value” and that “it’s not a competitor for the dollar, it’s really a competitor for gold.”



“We’re witnessing a paradigm shift. After four years of political purgatory, bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream,” Mike Novogratz, CEO of Galaxy Digital, told CNBC.



Bitcoin had been widely expected to reach the landmark $100,000 level since the U.S. presidential election. However, excited investors sent bitcoin closer to this mark much sooner than initially anticipated; it rose as high as $99,849.99 on Nov. 22. There is much hope that President-elect Trump will deliver on several pro-crypto initiatives in the year ahead – including the establishment of a national strategic bitcoin reserve or stockpile, no taxes on crypto transactions and opening up the crypto public equity markets with more IPOs.



“Over the long term, I’m bullish,” Novogratz added. “It won’t be a straight line up, and investors should always consider taking gains off the table. But, with a pro-crypto administration about to take charge in the U.S., it’ll be hard for the rest of the world not to take notice.”

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Bitcoin tops $100,000 as monster 2024 rally reaches new heights

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb-820x461.jpeg" alt="" class="wp-image-556953" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107357418-1704989066827-gettyimages-1921756255-0g1a0325_zwlec8kb.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Getty Images</figcaption></figure>



Bitcoin breached the $95,000 level for the first time Wednesday evening as investors continued pricing in a second Donald Trump presidency.



The price of the flagship cryptocurrency was last higher by more than 3% at $97,646.68, according to Coin Metrics. Earlier, it rose as high as $97,788.00.



Shares of MicroStrategy, a bitcoin proxy, gained 3% in extended trading. Mining stocks rose as well, with Mara Holdings up 4%.



Bitcoin has been regularly hitting fresh records this month on hopes that Trump will usher in a golden age of crypto, which would include more supportive regulation for the industry and a potential national strategic bitcoin reserve or stockpile.



It is widely expected to reach $100,000 this year and double by the end of 2025.



“Bitcoin’s price continues to be driven by a number of factors including improved liquidity conditions, increased institutional adoption, and a regulatory environment that has flipped from a headwind to a tailwind,” said Sam Callahan, an analyst at Swan Bitcoin.



Another Trump term also implies larger budget deficits, potentially more inflation and changes to the international role of the dollar – all things that would have a positive impact on the&nbsp;price of bitcoin.



Bitcoin has gained more than 127% in 2024.

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Bitcoin climbs, reaching a new all-time high above $97,000

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin-820x461.jpeg" alt="" class="wp-image-553187" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/107351661-17036182092023-10-24t101848z_1359207624_rc2yy3ac3wuf_rtrmadp_0_fintech-crypto-bitcoin.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dado Ruvic | Reuters</figcaption></figure>



Bitcoin was trading just shy of $90,000 Monday night after breaching $80,000 just a day earlier.



The flagship cryptocurrency was last higher by 12% at $89,100, according to Coin Metrics. Earlier Monday, it rose as high as $89,623.00. Its price is expected by many investors to continue making fresh records on its way up to $100,000 later this year.



“Bitcoin is now in price discovery mode after breaking through all-time highs early last Wednesday morning when it was officially declared that Trump won the election,” said Mike Colonnese, an analyst at H.C. Wainwright. “Strong positive sentiment is likely to persist through the balance of 2024 and [we] see bitcoin prices potentially reaching the six-figure mark by the end of this year.”



Crypto investors have been cheering President-elect Donald Trump’s promises to make the regulatory environment more supportive and even friendly toward crypto businesses, which have long struggled with a lack of clarity of the rules of the road.



While bitcoin has long been deemed a safe asset in Washington – that is, not subject to securities laws – the long tail of cryptocurrencies and crypto-related startups have been operating in a risky grey area.



“That’s just shifted 180 degrees,” Matt Hougan, chief investment officer of Bitwise Asset Management, told CNBC. “We’re now in a positive regulatory environment, we now have tailwinds from that, and that comes in the case of a market that was already in a bull market … that’s going to push us higher.”



Ether was trading higher by 5.8% Monday evening. Payments token XRP rose nearly 4% and the token linked to decentralized finance project Polygon gained more than 4%. Dogecoin has been one of the biggest winners – likely due to its connection with Elon Musk, who helped get Trump elected. It’s up 38%.



In the stock market, Coinbase and MicroStrategy gained about 3% and 5%, respectively, in extended trading. In the regular session on Monday, Coinbase surged 19% to trade above $300 for the first time since 2021. It’s now about 6% from its high from that year.



Traders and analysts agree this rally is just only beginning.



“It does seem like there’s an air gap between the previous [bitcoin] all-time highs around $72,000 and $100,000,” Hougan said. “It’s hard exactly to see what would force sellers to come into this market and halt the momentum before we get to that level. Of course, there are no guarantees. You could see pullbacks, but we’re in a new crypto market cycle. … I do think that we are right to be bullish and the bias is still on the upside.”

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Bitcoin is closing in on $90,000 for the first time ever

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-820x461.jpeg" alt="" class="wp-image-552774" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108058955-1730907484716-gettyimages-2182554552-porzycki-elonmusk241106_npRLr.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Jakub Porzycki | Nurphoto | Getty Images</figcaption></figure>



Bitcoin reached a fresh all-time high near $81,000 and futures premiums soared, in a clear sign that investors believe the record-run in the world’s largest cryptocurrency is poised for even more gains on the back of U.S. elections that saw a swell of pro-crypto candidates win office.



Open interest in bitcoin’s price surpassing $90,000 rose to more than $2.8 billion on the popular Deribit derivatives exchange, one of a few crypto native platforms that offers futures trading. Deribit encompasses most of the offshore options market.



“The options market’s bias is heavily toward continued momentum. Call options trade at a premium to puts, and open interest in out-of-the-money calls has grown,”&nbsp;Vetle Lunde,&nbsp;head of research at K33 Research, told CNBC.



A call option gives the buyer the right to buy shares of an underlying asset at a certain price for a specified period of time. Buying a call option is a bet the asset price will move higher. Buying a put option is a bet the asset price will fall.



The CME derivates exchange offers bitcoin futures contracts and is a popular way for institutions in the U.S. to make bets on the future price of bitcoin. Velde told CNBC that on Friday CME premiums for ether and bitcoin averaged 14.5% and 14%, respectively. Ahead of the election, Velde says these premiums sat at 7%, and had spent a majority of the past half year hovering slightly below 10%.



“The recent surge is a meaningful deviation higher emphasizing the bullish flows of late,” he added, noting that yields more or less stabilized well into the double digits after the election became clear.



“Alongside the growth in leverage, we saw the first meaningful example of growing yields in offshore derivatives, indicative of the move being led by determined risk-takers positioning for further upside,” said Velde.



The early innings of bitcoin’s push higher coincided with substantial growth in open interest in perpetual swaps, or contracts that allow buyers to speculate on where they think prices are headed without a set expiration date.



But liquidity in crypto markets on weekends is typically poorer than during weekdays, as neither CME futures nor ETFs are open to trade, so moves thus tend to overreact and substantially retrace once these markets open again, according to Velde.



President-elect Donald Trump promised on the campaign trail to turn the United States into the “crypto capital of the planet.” His multiple pledges to the crypto community included launching a national crypto stockpile with the more than $16 billion in bitcoin the U.S. government has amassed through asset seizures, as well as slashing interest rates. The easing of monetary policy typically dovetails with a surge in crypto prices since it makes it cheaper to borrow money.



The Federal Reserve, which guides the country’s monetary policy, sets the benchmark rate. It also, by design, operates independently from the White House. On Thursday, the Fed approved its second consecutive interest rate cut.



On the back of election results and the Fed’s unanimous vote to again slash the benchmark rate, the crypto market broadly surged into the weekend. Ether eclipsed bitcoin’s rise, up 30% in the last seven days, and solana’s market cap topped $100 billion on Sunday.



The total market cap of all spot bitcoin ETFs is now above $80 billion, and in the last three trading days alone, the spot funds collectively added $2.3 billion.



Within fintech, companies tied to crypto were some of the top performers, after candidates funded by the crypto industry won races up and down the ballot.



Coinbase shares jumped 48% for the week, their strongest performance since January 2023. Coinbase was one of the top corporate donors in the election cycle, giving more than $75 million to Fairshake and its affiliate PACs, including a fresh pledge of $25 million to support the pro-crypto super PAC in the 2026 midterms.



Trump has vowed to oust SEC Chair Gary Gensler, which potentially bodes well for companies like Coinbase fighting the regulator in court over alleged securities offenses.



“Tuesday night was certainly a big night for crypto and the crypto voter,” Coinbase’s chief legal officer Paul Grewal said in an interview. “We’re going to have the most pro-crypto Congress ever, and Coinbase has played some part in all of that.”



Robinhood, which allows users to buy and sell a number of digital currencies, rose 27% for the week. The online brokerage received a Wells Notice from the SEC in May, a move that often precedes formal charges.



Robinhood’s general manager for its crypto unit told CNBC that the goal at Robinhood is to be able to work within the administration.



“If you think about crypto, it’s a very fast-moving pace. It’s complicated, it was made by engineers, for engineers,” said Johann Kerbrat, the Vice President and General Manager of&nbsp;Robinhood&nbsp;Crypto. “We want to help policymakers to understand it and help them drive the right protections for the customers.”

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Over $2.8 billion bet on bitcoin topping $90,000 as it hits all-time high

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-820x461.jpeg" alt="" class="wp-image-550762" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108057899-1730826084038-gettyimages-1397086774-usabtcfranklin-1.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Bitcoin rallied overnight, hitting an all-time high as investors bet former President Donald Trump was gaining an edge in the U.S. election as results rolled in.



The price of the flagship cryptocurrency touched a record $75,000 on the nose, according to Coin Metrics. It was last higher by 7% at $74,392.00. It first hit its previous record of $73,797.68 on March 14 and has traded in a narrow range below $70,000 for most of the year since then.



Bitcoin’s overnight gains increased as Trump took an early lead in the Electoral College. NBC News has projected that Trump has won 230 electoral college votes, including the battleground state of North Carolina.



Exchange operator Coinbase rose 3% in after hours trading, while MicroStrategy, advanced 4%.



Investors expect bitcoin trading to be choppy until a clear winner is declared. A victory for Vice President Kamala Harris is expected to bring risk of downside moves to the price of bitcoin, while traders anticipate a bump in price in the event of a win by former President Donald Trump.



“The election is having a massive influence on crypto,” said Ryan Rasmussen, head of research at Bitwise Asset Management. “Expect bitcoin – and crypto more broadly – to be choppy in the days ahead … until we have definitive election results.”



“If Trump wins, I believe we’ll see new all-time highs,” Rasmussen added. “If Harris wins, I expect a decent short-term sell-off, with prices taking a month or two to recover. But eventually, either way, I think we go higher.”



In the 2012, 2016 and 2020 elections, bitcoin saw returns of roughly 87%, 44% and 145% in the 90 days following election day, respectively. That’s in part because election years happen to fall on Bitcoin halving years, when the supply of the cryptocurrency ratchets downward. Post election returns have also tended to align with major Federal Reserve policy shifts. This year, the market is looking forward to further interest rate reductions.



At just below $70,000, bitcoin has been trading at its fair value price heading into election day, according to CryptoQuant. That means that if the election proves to be a positive catalyst in the coming days, bitcoin can rally and is poised to establish a new record, CryptoQuant analyst Julio Moreno said.



“For now, everyone we’ve spoken to is keeping their powder dry,” said James Davies, CEO at crypto futures and options trading platform Crypto Valley Exchange. “I’ve heard from numerous leading market makers and traders and can say with conviction that almost everyone is set up to react. They don’t even know which way markets will go based on [the] result. There’s likely to be massive short-term volatility whichever outcome.”



This year’s presidential election has been called the most important one in the crypto industry’s lifetime. Many view a Harris win as a threat to crypto, the extent to which has been debated throughout this election cycle. Trump, on the other hand, is seen by many as a force for good in the industry after he presented himself earlier this year as the pro-crypto candidate and has been courting the industry more directly than Harris has.



Many voters are concerned about the state of the government deficit, which rose 8% in the 2024 fiscal year to $1.8 trillion, and increased tax cuts promised by both candidates. Bitcoin, like gold, is seen by many investors as a hedge against the potential for fiscal and monetary policy that combine to reduce the value of the dollar and lift inflation.

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Bitcoin surges to $75,000, a new record, as traders bet Trump has election edge

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-820x462.webp" alt="" class="wp-image-536800" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-820x462.webp 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-300x169.webp 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-160x90.webp 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY-768x432.webp 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY.webp 1480w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bitcoin. Nurphoto | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=/">Bitcoin</a>&nbsp;and crypto stocks retreated on the final trading day of September, following a rally last week, but are still poised to post a positive month.



The flagship cryptocurrency was last lower by 3.5% at $63,612.63, after briefly reclaiming the $65,000 level last week, according to Coin Metrics. Crypto stocks such as&nbsp;<a href="https://www.cnbc.com/quotes/COIN/">Coinbase</a>&nbsp;fell 3% in premarket trading and&nbsp;<a href="https://www.cnbc.com/quotes/MSTR/">MicroStrategy</a>&nbsp;slid 5%.



Investors are <a href="https://www.cnbc.com/2024/09/30/ports-strike-truckers-rails-billions-in-cargo-shutdown.html">bracing for strikes at ports</a> up and down the East Coast and along the Gulf Coast after midnight Monday, which could shake the economy ahead of the holiday season. 



Analysts have also warned about overbought conditions as bitcoin last week climbed nearly 5% in the five days ending Sept. 27 – as net inflows into global crypto exchange traded products accelerated to their highest level since mid-July. In the same period, Coinbase and MicroStrategy gained 12% and 21%, respectively. On Friday both stocks jumped 6%.



The combined net buying volume of U.S. bitcoin ETFs last week (16,774 BTC) exceeded a typical one-month supply of newly mined bitcoin (13,500), according to Bitwise-owned ETC Group. This was largely due to the&nbsp;<a href="https://www.cnbc.com/2024/09/24/chinas-central-bank-chief-set-to-hold-press-conference-days-after-fed-rate-cut.html">policy reversal</a>&nbsp;by the People’s Bank of China, the firm said.



For the month, bitcoin is on pace to finish its strongest September ever with an 8% gain and its second positive September – historically the cryptocurrency’s weakest month – in a row.



Coinbase is poised for a 4% monthly gain but is down nearly 14% for the quarter. Some analysts&nbsp;<a href="https://www.cnbc.com/2024/09/25/analysts-warn-coinbase-could-slump-after-six-day-rally-.html">see that downtrend continuing</a>&nbsp;in the coming weeks. Meanwhile, MicroStrategy is up 33% for the month and almost 28% for the quarter.



The market is heading into a seasonally strong quarter for crypto and risk assets broadly.



Bitcoin’s narrative is often debated — whether it’s a store of value or a risk asset — but its correlation is currently closer to that of the S&amp;P 500 than to gold, and investors expect it to benefit from rate cuts, clarity following the U.S. presidential election and seasonal and favorable market conditions translating into greater flows into crypto ETFs.

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Bitcoin and crypto stocks sink after last week’s rally, but still head for a positive September

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2-820x461.jpg" alt="" class="wp-image-528909" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108017785-1723066534822-GettyImages-1323542329_2.jpg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">oatawa | Getty</figcaption></figure>



Bitcoin jumped Monday evening and topped $57,000 after Wall Street’s rebound from its worst week of the year.



The price of the flagship cryptocurrency was last higher by 5.6% at $57,4449.00, according to Coin Metrics. Last week, bitcoin tumbled 9% for its worst weekly performance since August 2023.&nbsp;



In regular trading, Coinbase and MicroStrategy climbed 5.2% and 9.2%, respectively, on Monday. Those stocks rose as the S&amp;P 500 broke a four-day losing streak and the Nasdaq Composite gained more than 1%. The three major averages last week posted their worst weekly performance in 2024.



Bitcoin has been trading range bound for most of the year. Last week, it briefly fell below its floor of about $55,000. Analysts have warned that cryptocurrency lacks major catalysts at the moment and that in their absence, prices are likely to be sensitive to macro factors and continue to consolidate.



Seasonality is also a factor. For bitcoin, similar to other risk assets, September is a historically weak month.



“For bitcoin to experience some upside in the upcoming week, it is essential for the U.S. equity markets to find some stability or positive momentum, potentially leading to a decrease in [crypto] ETF outflows,” Bitfinex analysts said in a note Monday. “This relief in the equity markets could help alleviate selling pressure on bitcoin, providing a conducive environment for a recovery.”

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Bitcoin rebounds from its worst week in more than a year, jumping above $57,000

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5-820x461.jpeg" alt="" class="wp-image-515232" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/107212428-1679412407200-gettyimages-1243440706-raa-ethereum220922_npJS5.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Nurphoto | Nurphoto | Getty Images</figcaption></figure>



The cryptocurrency market plummeted in value on Sunday, as investors continued selling out of risky assets.



Led by a drop of 11% in bitcoin in the past 24 hours and a 21% plunge in ether, the overall value of cryptocurrencies sank by about $270 billion, according to CoinGecko data.



The selloff in the crypto market coincided with a broader slide in equities in Asia-Pacific markets. Japan’s Nikkei 225 dropped as much as 7%, extending losses that began last week, after the Bank of Japan announced it would hike its benchmark interest rate to the highest level in 16 years.



In the U.S. the Nasdaq slid 3.4% last week into correction territory, capping off the tech-heavy index’s worst three-week stretch since September 2022, when the market was in freefall. Amazon and Nvidia contributed to the declines.



Last week’s drop in stocks was tied in part to disappointing earnings, a weaker-than-expected jobs report, higher unemployment and a declining manufacturing sector. The U.S. Federal Reserve opted to hold its benchmark rate steady and didn’t promise a rate cut in September, which many market experts had baked into their forecast. Lower interest rates tend to correlate with better performance for risky assets.



Bitcoin’s price has reached its lowest level since February. The world’s largest cryptocurrency is trading at about $54,000. It’s still up almost 23% this year.



The price of ether, the native token underpinning the ethereum blockchain, fell to around $2,300 and has erased its gains for the year. Binance’s BNB token was down more than 15% and solana is trading 10% lower.



Investors are also looking out for new trade data from China and Taiwan this week, as well as central bank decisions in both India and Australia.



The latest crypto wipeout will be felt by a broader base of investors after the SEC this year approved new spot exchange-traded funds for bitcoin and ether. The ETFs have seen hundreds of millions of dollars flow into the coins. On Friday, CNBC reported that Morgan Stanley would soon allow its 15,000 financial advisors to pitch bitcoin ETFs to its clients, a first for Wall Street.

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Crypto selloff wipes out $270 billion in value as bitcoin, ether plunge

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="464" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/S5ZSZFJYLBIXNPDNSK3FB3QCRA.jpg" alt="" class="wp-image-416757" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/S5ZSZFJYLBIXNPDNSK3FB3QCRA.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/S5ZSZFJYLBIXNPDNSK3FB3QCRA-300x191.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/S5ZSZFJYLBIXNPDNSK3FB3QCRA-141x90.jpg 141w" sizes="auto, (max-width: 728px) 100vw, 728px" /><figcaption class="wp-element-caption">Representations of virtual currency Bitcoin are seen in this picture illustration taken taken March 13, 2020. REUTERS/Dado Ruvic/File Photo</figcaption></figure>



Cryptocurrencies plunged on Friday as investors focused on the payout of nearly $9 billion to users of collapsed bitcoin exchange Mt. Gox.



As of 10:50 a.m. London time, bitcoin’s price slumped nearly 6% in 24 hours to hit $54,500.53, marking the first time it’s traded below the $55,000 level since Feb. 27, according to data from CoinGecko.



Rival token ether sank around 9% to $2,872.10.



Altogether, the entire cryptocurrency market has shed more than $170 billion in combined market capitalization in the last 24 hours, according to CoinGecko data.



On Friday, the trustee for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, said in a statement that it had begun making repayments in bitcoin and bitcoin cash to some of the creditors through a number of designated crypto exchanges.



Mt. Gox’s trustee didn’t specify how much money had been transferred to these exchanges.



He noted that the remaining funds would be returned to creditors once a series of conditions is met, including confirming the validity of registered accounts and completing discussions between the trustee and the designated crypto exchanges.



The trustee is still working to ensure repayments “can be made safely and securely,” Kobayashi wrote, urging “eligible rehabilitation creditors to wait for a while.”



It comes after a small amount of bitcoin was moved out of wallets associated with Mt. Gox, according to blockchain analytics firm Arkham Intelligence, with the largest movement being a $24 transfer to the Japanese crypto exchange Bitbank.



Bitbank is among the recipients listed to support repayments.



Recently, the world’s largest cryptocurrency has been pressured by news of collapsed bitcoin exchange Mt. Gox preparing the distribution of around $9 billion worth of coins to users. This dumping of coins onto the market is expected to lead to some significant selling action.



Also pressuring crypto markets, the German government on Thursday sold roughly 3,000 bitcoins — worth approximately $175 million as of today’s prices — from a 50,000-bitcoin pile seized in connection with the movie piracy operation Movie2k, according to Arkham Intelligence.



Arkham, which is tracking Germany’s bitcoin wallet, noted the government still holds more than 40,000 bitcoins worth over $2 billion.

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Over $170 billion wiped off cryptocurrencies as market tanks on Mt. Gox bitcoin payout fears

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-820x462.jpeg" alt="" class="wp-image-500011" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/106886069-1621527756504-gettyimages-1232996080-porzycki-bitcoinc210519_npFCy.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A photo illustration depicting the cryptocurrency bitcoin. Jakub Porzycki | NurPhoto via Getty Images</figcaption></figure>



Bitcoin continued its descent to $60,000 on Monday.



The price of the flagship cryptocurrency was last down by more than 4% at $61,211.00, according to Coin Metrics. Earlier, it fell to $60,666.30, its lowest level in more than a month. It’s down more than 8% in the past week.



Digital asset investment products notched a second consecutive week of outflows, according to CoinShares. Last week crypto investment products saw their lowest trading volumes globally since the U.S. bitcoin ETFs launched in January.



“We have now seen $1.2 billion of outflows from crypto ETFs over the last two weeks which all began after the FOMC meeting. Our belief is that continued pessimism over the number of rate cuts is weighing on sentiment for crypto,” James Butterfill, head of research at the crypto-focused asset manager, told CNBC. “The Fed have indicated they need to see further evidence of inflation falling before they become more dovish, so any macro say that highlights inflation continues to fall will likely support prices, and conversely, an inflationary date will weigh on prices.”



Eleanor Gaywood, head of strategy at Coincover, said there are often market jitters ahead of the personal consumption expenditure index, the Fed’s preferred inflation gauge, which is due this Friday. She said signs of a rate cut in September could ease investor nerves and steady bitcoin’s price.

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Bitcoin tumbles back to $60,000 to start the week

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-820x410.jpg" alt="" class="wp-image-478995" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-820x410.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-300x150.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-160x80.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-768x384.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM.jpg 884w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



AUSTIN, TEXAS — Adam Sullivan left investment banking to mine bitcoin at an awkward time. It was May 2023, bitcoin was trading at around $21,000, U.S. regulators were in the thick of cracking down on the sector writ large, and Core Scientific, the company he had agreed to take over, was battling angry lenders in a Texas bankruptcy court over tens of millions of dollars in outstanding debt.



But Sullivan knew that, with a lifeline, he could get the business to a much better place. That’s because the halving was on the way, and with it would likely come a big rally in bitcoin.



Late Friday night, the bitcoin code automatically cut new issuance of the world’s largest cryptocurrency in half. It happens roughly every four years, and in addition to helping to stave off inflation, it historically precedes a major run-up in the price of bitcoin.



The technical event is relatively simple: Bitcoin miners get paid in bitcoin to validate transactions, and after 210,000 blocks of transactions are computed and added to the main chain, the reward given to the miners securing bitcoin is ‘halved.’



There are more than a dozen publicly traded miners on the network and thousands of smaller, private ones around the globe, constantly racing to process transactions and get paid in new bitcoin. Because the event leads to a cut to rewards paid to miners directly, they’ll be the first ones to feel the impact of the halving.



Typically, when the halving cuts supply, it’s led to huge rallies for bitcoin.



In fact, the previous (and only) three halvings in the chain’s history have come before every bull run, in which the coin has touched new all-time highs and a surge of investors have entered the market for the first time.



That rapid price increase has helped many miners stave off the worst since it tends to offset the impact of having the block prize cut in half.



“As a company that was already in the process of scaling our infrastructure during the previous halving, we know the toll that halvings can take on a company if it is not adequately prepared,” Core’s Sullivan told CNBC.



The aggregate market cap of the 14 U.S.-listed bitcoin miners tracked by JPMorgan analysts, which accounts for around 21% of the global Bitcoin network, declined 28% over the first half of April to $14.2 billion, reaching year-to-date lows. Bitdeer was the best-performing stock over the period, down around 20%, versus Stronghold Digital, which was 46% lower.



Some have billed the 2024 bitcoin halving as a seminal moment for the mining sector. Depending on how much prep work miners have done, it could easily make or break them.



“Being prepared for a halving means evaluating all of your power strategies, all of your software capabilities, all of your operations,” continued Sullivan.



Others are less concerned given recent price moves in bitcoin.



In a research note from Needham on Apr. 16, analysts said they expect the halving to only have a modest impact to miners’ estimated EBITDA margins, despite the 50% reduction in revenue, since the price of bitcoin has been trading in the range of $60,000 to $70,000.



“We expect geopolitical tensions and interest rate policy to be the biggest near-term drivers of crypto price action,” Needham analysts wrote, adding that at a bitcoin price above $60,000, the halving is “derisked for nearly all public miners.”



The bank did, however, single out their preference for low-cost bitcoin producers like Riot Platforms, Bitdeer, and Cipher Mining. Meanwhile, if bitcoin prices fall, Needham says the most outsized native impact will be felt by higher cost producers that are also levered to higher bitcoin prices via large treasury holdings.



Analysts from JPMorgan echoed a similar sentiment, writing in an Apr. 16 research note that they think “recent weakness offers an attractive entry point” for investors and that they are “especially bullish” on Riot, which they believe offers attractive relative valuations.



<h2 class="wp-block-heading" id="h-years-spent-bracing-for-the-halving">Years spent bracing for the halving</h2>



Miners have had years to prepare for the halving, including seeking lower power costs and upgrading their fleets to more efficient machines.



“Bitcoin’s halving happens like clockwork every four years,” said Haris Basit, chief strategy officer of Bitdeer Technologies Group. “It’s a known variable that is a benchmark for us to remain focused on operational excellence.”



To that end, the Singapore-headquartered mining firm has invested in new data centers, but its core strategy has been to increase vertical integration through research and development. 25% of its staff is focused on R&amp;D efforts, which Basit says have “led to new innovations and revenue pathways, such as our recently announced 4nm mining rigs and AI Cloud offerings.”



Analysts at Cantor Fitzgerald recently named Bitdeer as having one of the industry’s lowest “all-in” cost-per-coin.



Greg Beard, the CEO and Chairman of Stronghold Digital Mining, tells CNBC that&nbsp;miners whose only lever is more efficient machines will be at a disadvantage.



“Miners who own their low-cost power are better positioned,” said Beard. “Operational costs will be lower, allowing them to be more flexible with their capital.”



Core’s Sullivan agrees, noting that bitcoin mining data centers in the future will work hand-in-glove with power generators and grid operators to serve as a virtual battery for grid operators – allowing them to increase base load, curtail bitcoin data centers when they need to, and avoid peak generation loads, which he says are dirty and expensive.



“We own and operate our infrastructure, giving us greater control over operational and strategic decisions, such as the potential to expand into high-performance computing hosting,” said Sullivan.



Core Scientific, which launched in 2017 and now manages seven mining sites in five U.S. states, also owns the full technology stack. The company has been looking to diversify its revenue streams beyond purely bitcoin. Sullivan says that existing data centers offer reconfiguration opportunities to accommodate new types of high-value compute.&nbsp;



“Certain data centers are located in close proximity to major metropolitan areas, making them candidates for low-latency, high-value compute applications,” said Core’s CEO.



Riot Platforms CEO Jason Les told CNBC that preparation for the halving came down to the company’s long-standing focus on achieving a low cost of power, strong balance sheet, and significant scale of operations. Les says that’s what has positioned the firm to both withstand the halving with positive margins and be well positioned for upside on the other side of it.&nbsp;&nbsp;



“Our new Corsicana Facility was energized just this week, and we will be significantly scaling up our hash rate with next-generation equipment at that new site over the remainder of the year,” said Les. “As a result, we are positioned to mine more bitcoin per day at the end of the year than we do today, despite the halving.”



Marathon Digital, which has seen its stock rise more than 70% in the last year, took a different approach to scaling the business than its rivals. CEO Fred Thiel tells CNBC that the company grew quickly using an asset-light approach, where Capex was spent on mining rigs rather than infrastructure. 



“In December, we owned less than 5% of the sites where we were hosting our miners,” said Thiel. “Today we now own 53% of our total 1.1 gigawatts of capacity, having purchased it at less than the build and replacement cost.”



Owning sites lowers Marathon’s cost to mine by up to 20% on a marginal cost basis. Thiel also noted that by the end of 2024, Marathon expects to further improve efficiency by 10% to 15% as they deploy the next generation rigs across their new sites.&nbsp;



That boost to efficiency isn’t just about new gear, however. The firm is deploying its own custom firmware, which allows it to operate even more efficiently.&nbsp;



Marathon, along with other mining firms, has begun diversifying its business model into ancillary operations beyond purely bitcoin mining, as well.



Thiel says the company recently launched an energy harvesting division, where they are compensated for converting stranded methane and bio-mass into energy, which they then sell heat back into an industrial or commercial process. The service essentially subsidizes and lowers Marathon’s cost to mine significantly. The company expects this new business line to generate a significant portion of its revenues by the halving in 2028. 



<h2 class="wp-block-heading">Diversifying revenue</h2>



The April 2024 bitcoin halving looks a lot different than the three that came before it.



For years, increased competition resulting from new miners coming online has been cutting into profits, because more miners means more people are sharing the same pool of rewards.



In a research note from JPMorgan on Apr. 16, analysts note that the network hashrate, a proxy for industry competition and mining difficulty, was up 4% in April from the month before. Stronghold’s Beard says the halving is a headwind dwarfed by the global hashrate increasing nearly five-fold from the last one in May 2020.



“Mining is a tough industry especially because there are a lot of nation states that have extra power power and they’re dedicating it to mining,” said Nic Carter of Castle Island Ventures. “It’s a free market, anybody can enter into it as long as they have the basics.”



U.S. spot bitcoin exchange-traded funds have also significantly shifted the pricing dynamics. In years past, the price of bitcoin didn’t surge until after the halving. But in the wake of record flows into these spot bitcoin funds, the world’s largest cryptocurrency touched a fresh all-time-high above $73,000 in March.



“The recently approved bitcoin ETFs have proven to be huge pipelines of capital into bitcoin and that universe of ETFs continues to grow with the recent approvals in Hong Kong as well,” said Riot’s Les. “We think the price action we’ve seen in bitcoin year-to-date reflect that and has us very optimistic on what bitcoin mining economics can look like in the months and years post-halving.”



Blackrock’s ETF reached $17 billion in net assets within a few months of launching. Beard of Stronghold tells CNBC that if Blackrock added even just a billion dollars more of bitcoin in April to its ETF, it would single handedly create demand for more coins than the mining industry will supply post halving.



What is also different this time around is that the block reward is no longer the primary form of miner revenue. Recent programming innovations in bitcoin have given way to a burgeoning ecosystem of projects building on top of bitcoin’s blockchain, which has translated to greater transaction fee revenue for miners.



There is a limit to how large the blocks can go but the value of those blocks is about to increase significantly, according to Bill Barhydt, who is the CEO and founder of Abra. From Barhydt’s vantage point, he supports miners with a mix of services, including their auto liquidations, so he has access to a lot of macro data across the sector.



“The math is simple,” begins Barhydt. “Bitcoin blocks are fixed in size and the demand for data within those blocks is going to increase significantly for several reasons, including more retail wallet holders moving their bitcoin into and out of storage, new uses cases like Ordinals (NFTs for bitcoin) and DeFi on bitcoin, institutional settlement requirements for exchange traded products in the U.S., Hong Kong, Europe, etc., lightning settlement transactions, and more.”



At the current rate of adoption, Barhydt believes that transaction fees in this cycle would likely peak within 24 months at 10 times their cost during the previous cycle peak, due to a combination of a higher price for bitcoin itself, combined with higher demand for the space inside each block.&nbsp;



Castle Island’s Carter isn’t so sure that fee-based revenue can completely make up for lost income post-halving.



“It’s not entirely clear that fees are fully offsetting the lost revenue, and in fact, I don’t expect that to happen” said Carter.



Fees tend to be really cyclical. They rise sharply during periods of congestion, and they fall back to near zero during other normal periods. Carter cautions that miners will see spikes in fees, but there is not yet an enduring, strong, and robust fee market most of the time.



<h2 class="wp-block-heading">Swapping ASICs for AI</h2>



In the last year, there has been a surge in demand for AI compute and infrastructure that can support the massive workloads required to power these novel machine learning applications. In a new report, digital asset fund manager CoinShares says it expects to see more miners shift toward artificial intelligence in energy-secure locations because of the potential for higher revenues.



Already, mining firms like BitDigital, Hive, Hut 8, Terawfulf, and Core Scientific all have either current AI operations or AI growth plans.



“This trend suggests that bitcoin mining may increasingly move to stranded energy sites while investment in AI grows at more stable locations,” write analysts at CoinShares.



But pivoting from bitcoin mining to AI isn’t as simple as re-purposing existing infrastructure and machines. The data center requirements are different, as are the data network needs.



“AI presents several challenges, notably the need for distinct and considerably more costly infrastructure, which establishes barriers to entry for smaller, less capitalized entities,” continues the report. “Additionally, the necessity for a different skill set among employees leads to increased costs as companies hire more AI-skilled talent.”



The rigs used to mine bitcoin are called ASICs, short for Application-Specific Integrated Circuits. The “Specific” in that acronym means that it can’t be used to do other things, like supporting the underlying infrastructure for AI.



“If you’re a bitcoin miner, your machines can’t be repurposed,” explains Carter. “You have to buy net new machines in order to do it and the data center requirements are different for AI versus bitcoin mining.”



Sullivan says that Core Scientific, which has been mining a mix of digital assets since 2017, began to diversify into other services in 2019.



“The company has owned and hosted Nvidia DGX systems and GPUs for AI computing, having built and deployed a specialized facility specifically for high-value compute applications at our Dalton, Georgia data center campus,” he said.



Core Scientific has also partnered with CoreWeave, a cloud provider which provides infrastructure for use cases like machine learning.



Sullivan says the combined capabilities will support both AI and High Performance Compute workloads, resulting in an estimated revenue of $100 million, though he says the total potential revenue is much higher given their significant infrastructure footprint that can be fitted to host some of the most advanced GPU compute coming to market.



“Bitcoin mining is an early example of high-value compute, attracting significant capital and a number of companies scaling their operations to support the Bitcoin network,” said Sullivan.



But Sullivan thinks few operators will be able to make the transition to AI.



Sullivan continued, “Bitcoin mining sites can only be repurposed if they meet the attributes that are required for HPC. Many existing sites across North America do not meet these needs.”

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Bitcoin miners upgrade power centers and get into AI to brace for slashed revenue post halving

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/02/104893268-GettyImages-818871806.jpg" alt="" class="wp-image-415449" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/02/104893268-GettyImages-818871806.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2022/02/104893268-GettyImages-818871806-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/02/104893268-GettyImages-818871806-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption class="wp-element-caption">Bitcoin on a mound of gold.
bodnarchuk | iStock Editorial | Getty Images</figcaption></figure>



LONDON, March 11 (Reuters) &#8211; <a href="https://www.cnbcafrica.com/quotes/BTC=X/">Bitcoin BTC</a>= hit a record high on Monday above $71,000, as the surge in the biggest cryptocurrency showed no signs of slowing down.



Britain&#8217;s financial watchdog on Monday became the latest regulator to pave the way for digital asset trading products after saying on Monday it will now permit recognised investment exchanges to launch crypto-backed exchange-traded notes.



Bitcoin rose&nbsp;by as much as&nbsp;4.8% to a record $71,677in European trading, bringing gains for the year so far to 70%.



The&nbsp;world&#8217;s most valuable cryptocurrency&nbsp;has been boosted by a flood of cash into new spot bitcoin exchange-traded funds as well as hopes that the Federal Reserve will soon cut interest rates.



Flows of capital into the 10 largest U.S. spot bitcoin exchange-traded funds slowed to a two-week low in the week to March 8, but still reached almost $2 billion, according to LSEG data.



&#8220;Bitcoin has started the week with a surge, dragging the rest of the cryptocurrency space higher with it,&#8221; DailyFX strategist Nick Cawley said.



Supply of bitcoin, which is limited to 21 million tokens, is going to get tighter in April, when the so-called halving event takes place.



Every four years, the rate at which new supply is released into circulation, as well as the reward for crypto miners, is halved, which tends to support the price.



&#8220;News also out earlier that the LSE plans to accept applications for bitcoin and ethereum ETNs in Q2 may have also helped today’s push higher,&#8221; Cawley said.



The UK regulator said these products would be only available for professional investors such as investment firms and credit institutions authorised to operate in financial markets, the Financial Conduct Authority (FCA) said in a statement.



The FCA warned crypto exchange traded notes (ETNs) &#8211; bonds issued by financial institutions that track the performance of underlying assets &#8211; pose harm to retail investors.



Nonetheless, demand is picking up across the investment community.



Asset managers&nbsp;1133741ANET&nbsp;now hold the biggest bullish position in bitcoin futures on record, according to weekly data from the U.S. Commodity Futures Trading Commission.



In the week to March 5, the net long position held by asset managers &#8211; usually interpreted as covering holdings of institutional investors such as mutual funds and pension funds &#8211; rose to 15,531 lots, worth $5.5 billion based on the current bitcoin price.



This is more valuable than the long position asset managers hold in sterling, worth $2.78 billion or the bearish position they hold in the Japanese yen against the dollar, worth $1.49 billion, according to LSEG data.



Ether&nbsp;ETH=&nbsp;rose 2.1% to nudge $4,000, around its highest for two years. Speculation that U.S. regulators may approve the listing of spot ether ETFs this year has driven the price up 75% this year.



(Reporting by Harry Robertson and Amanda Cooper; Editing by Louise Heavens)

104893268-GettyImages-818871806

Bitcoin hits record above $71,000 as demand frenzy intensifies

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1.jpg" alt="" class="wp-image-412818" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/10/106892639-1622836826337-bit-1-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption class="wp-element-caption">Art at the cryptocurrency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami on June 4, 2021.
Marco Bello | AFP | Getty Images</figcaption></figure>



Bitcoin’s all-time high is in sight after the cryptocurrency surpassed $61,000 on Wednesday. However, in many African currencies’ terms, the world’s largest cryptocurrency is already trading at record highs. The flagship crypto rose as high as $61,023.44 on Coindesk, roughly 11% off its November 2021 record of $68,982.20. The latest rally was sparked by the disclosure on Monday that crypto investing and software firm MicroStrategy had bought about 3,000 bitcoins for $155 million.



MicroStrategy, based in Virginia, in the U.S., is currently the largest publicly traded owner of Bitcoin. CNBC.com says the company reported holding about 190,000 of the cryptocurrency tokens earlier this month, which would be worth over $10.5 billion at current prices.



But with many African currencies trading at some of their weakest levels against the dollar because of high U.S. interest rates and an unfavorable global environment, bitcoin prices in local currency terms have been boosted to all-time highs as detailed below:



<iframe title="% return of $1000's invested in BTC in Naira" aria-label="Bar Chart" id="datawrapper-chart-UbDrd" src="https://datawrapper.dwcdn.net/UbDrd/1/" scrolling="no" frameborder="0" style="border: none;width: 100%;max-width: 600px;" height="192" data-external="1"></iframe>



<h2 class="wp-block-heading" id="h-record-breaking-highs">Record-breaking highs:</h2>



<ul class="wp-block-list">
<li>South African Rand (ZAR): 1 bitcoin is now worth R1,185,530 surpassing the previous record of 1 million ZAR set in 2023.</li>



<li>Kenyan Shilling (KES): Bitcoin skyrocketed to KES 8,972,000, shattering the previous high of 4.5 million KES set in 2021.</li>



<li>Nigerian Naira (NGN): The value of 1 bitcoin reached 96,086,600 NGN, surpassing the previous record of 26 million NGN set in 2021.</li>



<li>Ghanaian Cedi (GHS): Bitcoin hit a new high of 764,866 GHS, eclipsing the previous record of 400,000 GHS set in 2021.</li>



<li>Rwandan Franc (RWF): Bitcoin reached a record high of 79,463,490 RWF, dwarfing the previous record of 3 million RWF set in 2022.</li>
</ul>



<h2 class="wp-block-heading" id="h-how-much-a-1-000-investment-in-bitcoin-would-be-worth">How much a $1,000 investment in Bitcoin would be worth</h2>



For those who invested in Bitcoin as early as 2015, the current surge presents a remarkable return on investment. Consider someone who invested USD 1,000 in Bitcoin in 2015, when the price was around $250. Today, that investment would be worth:



<ul class="wp-block-list">
<li>South Africa: 4,679,000 ZAR</li>



<li>Kenya: 35,624,000 KES</li>



<li>Nigeria: 384,056,000 NGN</li>



<li>Ghana: 3,059,000 GHS</li>



<li>Rwanda: 316,468,000 RWF</li>
</ul>



This is at a time when <a href="https://businessday.ng/africa/article/7-worst-performing-african-currencies-in-2023/">7 out of the 10</a> worst-performing currencies in 2023 are in the African continent.



<h2 class="wp-block-heading" id="h-before-investing-do-your-due-diligence">Before investing, do your due diligence</h2>



It&#8217;s important to remember that the cryptocurrency market is highly volatile, and past performance is not indicative of future results. Investing in Bitcoin carries inherent risks, and individuals should conduct thorough research before making any investment decisions.

Bitcoin hits record highs in African currencies as it nears all-time highs

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1-820x462.jpeg" alt="" class="wp-image-460361" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The bitcoin halving is an event that happens roughly every four years where rewards to miners are cut in halve, effectively limiting supply of the token. S3studio | Getty Images</figcaption></figure>



<a href="https://www.cnbcafrica.com/quotes/BTC=X/">Bitcoin</a>, the world’s largest cryptocurrency by market cap, extended a rally in Asia trading on Tuesday, reaching a two-year high of over $56,000 and uplifting the broader crypto market amid positive market developments and buying from crypto bulls.



The price of bitcoin increased over 10% within two days, according to data from CoinMarketCap, after crypto investing and software firm MicroStrategy disclosed a purchase of about 3,000 bitcoins for $155 million on Monday.



MicroStrategy, based in Virginia, is currently the largest publicly traded owner of bitcoin. The company reported a holding of about 190,000 of the cryptocurrency tokens earlier this month, which would be worth over $10.5 billion today.



According to Greta Yuan, head of research at digital asset platform VDX, the market was “encouraged by crypto bulls such as MicroStrategy” as well as a “new record of Bitcoin ETF inflows.”



Most of the cryptocurrency market experienced a lift from the latest rally. Ethereum, the second-largest cryptocurrency by market cap, reached a multi-month high above $3,200.



Crypto-related equities also surged in trading in the U.S. MicroStrategy and San Francisco-based crypto exchange company Coinbase both leaped over 16% on Monday and continued gaining in aftermarket trading.



The two crypto-related companies have seen their stock prices grow 200% over the past year. 



Speaking to CNBC last week, Alesia Haas, Coinbase’s CFO, attributed the company’s recent strong financial results to the regulatory approval of spot bitcoin ETFs in the U.S. last month, which had triggered renewed fervor surrounding the cryptocurrency.&nbsp;



According to VDX’s Yuan, the surging price of bitcoin also reflects the “bullish sentiment of investors, especially in the U.S.,” ahead of an upcoming “bitcoin halving” set for the second half of April.&nbsp;



A bitcoin halving event occurs every four years, with the reward for bitcoin mining — the process by which transactions are digitally verified on the blockchain — cut in half, thus reducing the rate at which new bitcoin tokens are created and lowering the amount of new supply available.



“As Bitcoin’s halving draws closer, investors are rushing to the best positioning for the event. The new record of inflow volume of Bitcoin ETFs is another confidence check for bullish investors,” Yuan added.&nbsp;



The strong bitcoin performance also comes amid the dollar trading down on Monday and Tuesday. Markets anticipate U.S. economic data this week that could signal how soon the Federal Reserve may begin cutting interest rates.



Bitcoin prices and the U.S. dollar index have historically shown an inverse correlation.

107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1

Bitcoin surpasses $56,000 benchmark, uplifts crypto market in latest rally

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-820x547.jpeg" alt="" class="wp-image-429211" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/11/107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Zhao Changpeng, founder and chief executive officer of Binance, speaks at the Blockchain Week Summit in Paris, France, on Wednesday, April 13, 2022.  Benjamin Girette | Bloomberg | Getty Images</figcaption></figure>



Binance chief Changpeng Zhao pleaded guilty Tuesday to criminal charges and stepped down as the company’s CEO as part of a $4.3 billion settlement with the Department of Justice, according to court documents. The plea arrangement with the government resolves a multiyear investigation into the world’s largest cryptocurrency exchange.



Zhao appeared before Judge Brian Tsuchida in a Seattle courtroom to enter his plea. Zhao and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program and for willfully violating U.S. economic sanctions “in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law,” according to the Justice Department.



Zhao said Tuesday in a post on X, formerly Twitter, that he had “made mistakes” and “must take responsibility.” He said Richard Teng, the company’s former global head of regional markets, has been named the new CEO of Binance.



The action against Binance and its founder was a joint effort by the Department of Justice, the Commodity Futures Trading Commission and the Treasury Department. The Securities and Exchange Commission was notably absent.



Treasury Secretary Janet Yellen said in a release Tuesday that the exchange allowed illicit actors to make more than 100,000 transactions that supported activities such as terrorism and illegal narcotics and that it allowed more than 1.5 million virtual currency trades that violated U.S. sanctions.



It also allowed transactions associated with terrorist groups such as Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad, al-Qaida and ISIS, Yellen said in the release, noting Binance “never filed a single suspicious activity report.”



U.S. Attorney General Merrick Garland said in a press conference Tuesday that the fine is “one of the largest penalties we have ever obtained.”



“Using new technology to break the law does not make you a disruptor. It makes you a criminal,” Garland said.



“Binance prioritized its profits over the safety of the American people,” he said.



According to a 92-page consent order between Binance and Treasury’s Financial Crimes Enforcement Network, or FinCen, the crypto exchange “even developed a process to notify VIP users if they became the subject of a law enforcement inquiry.”



Zhao personally pleaded guilty to violating and causing a financial institution to violate the Bank Secrecy Act, according to the plea agreement. The DOJ is also recommending that the court impose a $50 million fine on Zhao.



Zhao has been released on a $175 million personal recognizance bond secured by $15 million in cash and has a sentencing hearing scheduled for Feb. 23.



Binance will continue to operate but with new ground rules. The company will be required to maintain and enhance its compliance program to ensure its business is in line with U.S. anti-money-laundering standards. The company is required to appoint an independent compliance monitor.



The case against Binance, which was unsealed Tuesday, shows that three criminal charges were brought against the exchange, including conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy.



Binance has agreed to forfeit $2.5 billion to the government, as well as to pay a fine of $1.8 billion.



The Justice Department said in its filing Tuesday that Binance “knowingly and willfully” caused the supply of services to Iran, in breach of U.S. sanctions. It follows a report that Binance processed billions of dollars worth of Iranian transactions.



“Let me be clear: We are also sending a message to the virtual currency industry more broadly, today and for the future,” Yellen wrote in a press brief.



The settlement comes after FTX founder Sam Bankman-Fried was found guilty of several criminal counts of fraud and conspiracy on Nov. 2 following just three hours of deliberation by the jury. Experts told CNBC that, for a high-profile monthlong trial that involved nearly 20 witnesses and hundreds of exhibits, they’d never seen such a speedy decision.



CNBC reached out to Zhao for comment but did not immediately hear back. Binance did not respond to several CNBC requests for comment.



The charges follow civil suits brought earlier this year by both the Securities and Exchange Commission and the Commodity Futures Trading Commission.



Binance has been the center of intense regulatory scrutiny over how it operates, with officials in multiple jurisdictions flagging concerns about the company’s approach toward launching in certain markets even when it lacks the authority to do so, and allegations of involvement in illicit dealings such as money laundering and securities fraud.



The SEC targeted the company with an expansive lawsuit in June, alleging that Binance was running an illegal securities exchange and mishandling customer funds.



The SEC hit rival exchange Coinbase with a similar lawsuit shortly after, alleging it is operating as an unauthorized securities exchange, broker and clearing agency.



And on Monday the SEC sued Kraken, alleging that the exchange commingled $33 billion in customer crypto assets with its own company assets, creating the potential for a significant risk of loss to its users.



In the 13 charges brought against Binance by the SEC, the agency accused Binance of commingling billions of dollars in customer money with Binance’s own funds, similar to allegations made against the now-bankrupt crypto exchange FTX. SEC Chair Gary Gensler added, “Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”



Started by the Chinese-born entrepreneur in 2017, Binance went from being a relatively obscure name to being a major force in crypto in a matter of weeks. Binance remains the world’s largest crypto exchange globally, processing billions of dollars in trading volume every year.



While its holding company is based in the Cayman Islands, Binance doesn’t have a global headquarters and Zhao frequently resisted calls to create one, saying he wanted the platform to run on a “decentralized” operating model.



In 2021, the U.K.’s Financial Conduct Authority barred Binance’s U.K. unit from operating in the country, saying it wasn’t authorized to carry out regulated activities. More recently, Binance scrapped plans to pursue a full U.K. license after the regulator said its know-your-customer and anti-money-laundering controls didn’t meet its requirements.



In the CFTC’s complaint, the regulator alleged that Binance, Zhao, and the company’s ex-chief compliance officer, Samuel Lim, operated an “illegal” exchange, ran a “sham” compliance program, and violated the Commodity Exchange Act, including laws “designed to prevent and detect money laundering and terrorism financing.”



Binance and Zhao filed a motion in July to dismiss the CFTC’s suit. The U.S. arm of the exchange is also pushing back on the SEC’s lawsuit, filing a protective order against what they call the SEC’s “fishing expedition.”



Of particular concern for the crypto industry are the implications of the agency’s crackdown on crypto for myriad tokens and blockchains — not just the exchanges. The SEC maintains that several of the tokens Binance and Coinbase offer on their platforms — such as Solana’s sol, Cardano’s ada, and Polygon’s matic — are securities that should have been registered with the agency.



— CNBC’s Kevin Breuninger contributed to this report.

107337316-1700585872532-gettyimages-1239957235-FRANCE_BLOCKCHAIN

Binance CEO Changpeng Zhao pleads guilty to federal charges, steps down

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1-820x462.jpeg" alt="" class="wp-image-428455" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/10/107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bitcoin. Filip Radwanski | Sopa Images | Lightrocket | Getty Images</figcaption></figure>



The price of bitcoin breached the $34,000 level to hit its highest since May last year, bolstered by positive sentiment about a bitcoin exchange-traded fund.



The world’s largest cryptocurrency was trading 4.97% higher at $34,596.40 on Tuesday, according to data from Coin Metrics.



Ether, the second-biggest digital coin, surged to its highest since August, according to Coin Metrics data.



“The real catalyst that created the ‘god candle’ earlier today and pushed bitcoin above $34,000 was the $167 million in short liquidations, mainly on offshore exchanges,” said Ryan Rasmussen, analyst at Bitwise Asset Management.



“I don’t think anyone expected the level of price action we’re seeing, and those investors who were shorting bitcoin in the $33,000 plus range are certainly feeling the pain of that surprise today,” said Rasmussen.



Anticipation of a bitcoin ETF grew after the court ruled in favor of crypto-focused asset manager Grayscale over the U.S. Securities and Exchange Commission in its bid to turn its huge Grayscale Bitcoin Trust (GBTC) bitcoin fund into an ETF.



Last week, the SEC declined to appeal that ruling by a key deadline, sparking hopes a bitcoin-related ETF may be approved in the next few months.



A bitcoin ETF would give&nbsp;investors a way to gain exposure to bitcoin’s price movements without owning the cryptocurrency&nbsp;directly.



Bitcoin is considered a highly volatile asset, and its price fluctuations are unpredictable.



Major financial institutions such as BlackRock, Invesco, Fidelity and Grayscale have been pushing for bitcoin ETFs and submitted applications to sell such assets, portraying them as safer investment options compared to direct crypto investments known for their speculative nature and price volatility.



Coinbase told CNBC it is confident that a U.S. bitcoin exchange-traded fund will be approved by the U.S. SEC.



<h2 class="wp-block-heading" id="h-investors-watching-closely"><a></a>Investors watching closely</h2>



The crypto industry is closely watching such developments that could point to a comeback.



Over the past year, the sector has been embroiled in scandals and high drama such as FTX’s bankruptcy and Terraform and its CEO Do Kwon being charged in February for defrauding investors.



Bitcoin price reached an all-time high in November 2021, with values exceeding over $65,000 at that time. However, a year later, the value plummeted to around $16,000 in November last year. That was when Sam Bankman-Fried’s crypto exchange FTX collapsed and filed for bankruptcy.



The SEC has been cracking down on crypto firms, with companies such as Coinbase and Ripple embroiled in lawsuits with the SEC, which has accused them of violations in securities laws.



Both Coinbase and Ripple, as well as other crypto firms, have slammed the U.S. for a lack of clarity around crypto regulations and threatened to leave the country in response to the SEC’s crackdown.



— CNBC’s Tanaya Macheel and Ryan Browne&nbsp;contributed to this story.

107208912-1678874096868-gettyimages-1236743873-FR_20211118_011-1

Bitcoin crosses $34,000 to the highest since May 2022 on ETF hopes

The District of Columbia Court of Appeals has paved the way for bitcoin exchange-traded funds.



On Tuesday, the court sided with Grayscale in a lawsuit against the Securities and Exchange Commission which had denied the company’s application to convert the&nbsp;<a href="https://www.cnbc.com/quotes/GBTC/">Grayscale Bitcoin Trust</a>&nbsp;to an ETF. The decision could impact other companies that want to create bitcoin ETFs, like&nbsp;<a href="https://www.cnbc.com/quotes/BLK/">BlackRock</a>&nbsp;and Fidelity.



A spot bitcoin ETF would be traded through a traditional stock exchange, although the bitcoin would be held by a brokerage, and would allow investors to gain exposure to the world’s biggest cryptocurrency&nbsp;without having to own the coin themselves. Many crypto bulls believe that approval of a spot bitcoin ETF will lead to more mainstream institutional adoption.



<a href="https://www.cnbc.com/quotes/BTC.CB=/">Bitcoin</a>,&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=/">ether</a>, and other major cap crypto coins surged on the news, and&nbsp;<a href="https://www.cnbc.com/quotes/COIN/">Coinbase</a>, which is listed as the custodian partner in multiple spot bitcoin ETF applications, was up more than 14% on Tuesday.



“The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP,” the court said, referring to exchange-traded products. “In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful.”



Grayscale Investments, which manages the world’s biggest crypto fund,&nbsp;<a href="https://www.cnbc.com/2022/06/30/grayscale-sues-sec-after-rejected-bid-to-turn-bitcoin-fund-into-etf.html">initiated its lawsuit against the SEC in June</a>&nbsp;2022 after the agency rejected its application to turn its flagship bitcoin fund, better known by its ticker GBTC, into an ETF. The company decided to pursue the ETF, which would be backed by bitcoin rather than bitcoin derivatives, after the SEC&nbsp;<a href="https://www.cnbc.com/2021/10/18/first-bitcoin-futures-etf-to-make-its-debut-on-the-nyse-tuesday-proshares-says.html">approved ProShares’ futures-based bitcoin ETF in October 2021</a>.



The ruling faced multiple delays but the SEC ultimately rejected the application last summer, citing failure by Grayscale to answer questions related to concerns about market manipulation and investor protections.



“We are reviewing the court’s decision to determine next steps,” the SEC said in a statement.



A spokeswoman for Grayscale called Tuesday’s ruling “a monumental step forward for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure through the added protections of the ETF wrapper.”



U.S. court rules in favor of Grayscale over SEC, opening door for first spot Bitcoin ETF



“The Grayscale team and our legal advisors are actively reviewing the details outlined in the Court’s opinion and will be pursuing next steps with the SEC. We will share more information as soon as practicable,” continued the written statement.



GBTC, which has $16 billion in assets under management as of Tuesday, was the first crypto product investors could trade in their brokerage accounts to get exposure to bitcoin. It was launched in 2013, well before the approval of bitcoin ETFs in Canada or bitcoin futures ETFs in the U.S. Grayscale charges a 2% annual fee to investors, making it a cash cow for parent company Digital Currency Group, led by Barry Silbert.



“It virtually guarantees they will approve BlackRock and Fidelity,” said Dave Weisberger, CEO of CoinRoutes, a platform that provides algorithmic trading and consolidated market data products for digital assets across multiple exchanges and liquidity providers. “Grayscale may need to refile, but they will almost certainly be approved as well.”



Firms have been applying for spot bitcoin ETFs for more than two years, but so far, the SEC has denied more than 30 proposals since 2021 — a 100% rejection rate. But investor sentiment was buoyed in June when BlackRock, the world’s largest asset manager with some $9 trillion in assets under management, put in an application. The firm has had all but one of its previous 575 ETF applications accepted.&nbsp;



—&nbsp;CNBC’s Jordan Smith contributed to this report.

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Crypto

Bitcoin tops $100,000 as monster 2024 rally reaches new heights

Bitcoin climbs, reaching a new all-time high above $97,000

Bitcoin is closing in on $90,000 for the first time ever

Over $2.8 billion bet on bitcoin topping $90,000 as it hits all-time high

Bitcoin surges to $75,000, a new record, as traders bet Trump has election edge

Bitcoin and crypto stocks sink after last week’s rally, but still head for a positive September

Bitcoin rebounds from its worst week in more than a year, jumping above $57,000

Crypto selloff wipes out $270 billion in value as bitcoin, ether plunge

Over $170 billion wiped off cryptocurrencies as market tanks on Mt. Gox bitcoin payout fears

Bitcoin tumbles back to $60,000 to start the week

Bitcoin miners upgrade power centers and get into AI to brace for slashed revenue post halving

Bitcoin hits record above $71,000 as demand frenzy intensifies

Bitcoin hits record highs in African currencies as it nears all-time highs

Bitcoin surpasses $56,000 benchmark, uplifts crypto market in latest rally

Binance CEO Changpeng Zhao pleads guilty to federal charges, steps down

Bitcoin crosses $34,000 to the highest since May 2022 on ETF hopes

First bitcoin ETF could be coming soon as court rules in favor of Grayscale over SEC

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