Tag: Cryptocurrency

Bhutan to upgrade Bitcoin mining in Himalayas as ‘halving’ looms

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bhutan’s investment arm and Bitdeer Technologies Group are planning to ramp up their Bitcoin mining operation to help offset the revenue impact of an upcoming event known as the halving.

The partnership between Druk Holding & Investments and Nasdaq-listed crypto mining firm Bitdeer aims to invest in boosting Bhutan’s mining capacity sixfold through the introduction of cutting-edge hardware.

The planned upgrades will increase the Himalayan kingdom’s mining capacity by 500 megawatts by the first half of 2025, Matt Linghui Kong, chief business officer at Bitdeer, said in an interview. That would bring Bhutan’s total capacity to 600 megawatts.

The capital will be drawn from a $500 million fund that the pair began raising in May last year, when they unveiled plans to leverage Bhutan’s abundant hydroelectric power for Bitcoin mining. Kong said he expects to close the fund by July.

Reduced Rewards

Bitcoin miners operate power-hungry computers that secure the blockchain, earning new tokens as a reward. These rewards are programmed to be cut in half every four years, part of the process of capping the total supply of the original cryptocurrency at 21 million coins.

The upcoming halving in April will see mining rewards slashed from 6.25 to 3.125 coins per block.

DHI and Bitdeer said they are confident they can maintain operational efficiency even if the price of Bitcoin declines post-halving. Bitdeer has one of the lowest costs per Bitcoin mined in the industry at $20,000 per coin, Kong said.

Some miners went bankrupt during the crypto rout of 2022, when a combination of soaring energy costs and Bitcoin’s price falling below $16,000 proved a stern test of the sector’s durability.

Bitcoin Rally
The 140% Bitcoin rally over the past 12 months brought much needed relief to firms that survived, which are once again splashing cash on hardware upgrades and capacity expansion. The digital asset was trading at $68,581 as of 7 a.m. in Sydney on Friday.

Computing costs are rising due to a surge in Bitcoin’s mining difficulty, a measure of how much computing power is needed to add a new block to the network. Network difficulty has hit record highs ahead of the halving, offsetting some of the gains from the price rally’.

Ujjwal Deep Dahal, chief executive officer at DHI, said the nation’s 500-megawatt boost “will be built on Bitdeer’s latest hardware to lower costs and improve computing power.”

Singapore-based Bitdeer, controlled by Chinese entrepreneur Jihan Wu, is one of the top crypto miners by compute power globally and runs one of the largest facilities in Texas.

Sandwiched between China and India, Bhutan has long sought to diversify its hydropower-reliant economy. DHI, which manages the government’s diverse investments, sees blockchain technology as a core part of efforts to build “an innovation ecosystem for a startup economy.” The investment outfit has been experimenting with asset tokenization and is also building out “Bhutanverse,” a metaverse project.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

ITR filing: How to report cryptocurrency income in income tax return

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Income Tax Return (ITR) filing is compulsory for individuals earning a specified amount of income in a year. However, there is confusion among taxpayers on how the earnings from investments in cryptocurrencies such as bitcoins, and Ethereum should be disclosed in the ITR.

Abhinav Soomaney, founder at Cryptotax International emphasised the importance of understanding the nuances of reporting crypto earnings.

“Crypto taxation is complex due to transactions on exchange platforms, wallets, staking protocols, and P2P trading. Obtaining data from the blockchain is crucial for on-chain activity. However, there is a lack of knowledgeable professionals in this field, making specialided guidance essential for cryptocurrency taxation,” he said.

He advised investors to first prepare a comprehensive capital gain/loss report for their crypto activities.

“After preparing your capital gain/loss report for crypto activity, log into the Income Tax Portal and begin your ITR-2,” he suggested.

He outlined the steps to report crypto earnings within the ITR: “Report capital gains on Schedule VDA, along with other income from crypto. Then investors need to complete the necessary schedules, proceed to verification, and filing.”

Soomaney clarified that capital gains tax is applicable only when crypto is sold at a profit.

Holding onto tokens without selling results in an unrealised capital gain/loss, which is not taxable.

He underscored several key points for taxpayers to consider:

• No deductions are allowed for crypto investors except for acquisition cost deductions.
• Loss from digital assets cannot be set off against other income.
• Capital gains on crypto income are taxed at a flat rate of 30%, with 1% TDS paid on each transaction (except for crypto purchased with INR and crypto transferred between exchanges/wallets owned by the same individual).

Soomaney further highlighted various calculation methods available for investors, such as FIFO (First In, First Out), LIFO (Last In, First Out), and HIFO (Highest In, First Out). He suggested that HIFO might be the most beneficial for minimising taxable gains.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin tops $71,000 for the first time as rally builds steam

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin topped $71,000 for the first time, advancing for a sixth straight day and taking this year’s rally to almost 70% on the back of massive inflows into US exchange-traded funds.

The original cryptocurrency jumped as much as 3.2% to $71,631.45 on Monday. Smaller tokens like Ether, Solana and Avalanche also advanced.

“This rally comes following a weak Asian trading session in which shorts tested the conviction of longs — it appears the longs have given a rather convincing positive answer,” said Richard Galvin, founder of Australia-based crypto-focused investment firm DACM.

Investors have poured a net almost $10 billion into a batch of new Bitcoin ETFs since they launched in the US two months ago, igniting a broad surge in crypto markets. Digital assets scored another win on Monday, as the London Stock Exchange confirmed it will accept applications for admitting Bitcoin and Ether exchange-traded notes.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin surges to all-time high, surpasses $70,000 milestone for the first time

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin soared to an unprecedented peak on Friday, surpassing the $70,000 milestone for the first time. The surge in the leading cryptocurrency was fueled by a combination of factors, including robust investor appetite for newly introduced US spot exchange-traded crypto products and anticipation of a global decline in interest rates.

Bitcoin’s value peaked at an impressive $70,105 before experiencing a swift downturn, ultimately settling at $68,317.72 at last trading.

Billions of dollars have poured into Exchange-Traded Funds (ETFs) in recent weeks, providing significant momentum to the market. Additionally, optimism is bolstered by anticipated upgrades to the Ethereum blockchain platform, which hosts the second-largest cryptocurrency, Ether.

The forthcoming bitcoin “halving” event in April, which slows the pace of bitcoin production, further contributed to market confidence.

Challenges amidst the surge

Following Tuesday’s record high, Bitcoin experienced a sharp reversal, plunging more than 10% below the $60,000 threshold. Antoni Trenchev, co-founder of crypto lending platform Nexo, cautioned about the inherent volatility of bitcoin bull markets, predicting potential sudden downturns ranging from 10% to 20%, Reuters reported.

The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a significant milestone for the industry, signalling a shift from the prolonged crypto winter characterized by bankruptcies and scandals.

The optimism surrounding Bitcoin’s surge has also spilled over to other digital assets, notably Ether, which has seen a remarkable increase of over 60% since the beginning of the year. Ether’s value currently stands at $3,939.84, reflecting the broader bullish sentiment in the cryptocurrency market.

Rising tide lifts crypto stocks

The positive market sentiment has extended to crypto-related stocks, with shares of Coinbase rising by 8.2% and crypto miners Riot Platforms and Marathon Digital experiencing gains of 5.1% and 9.6%, respectively, underscoring the growing investor interest in cryptocurrency-related equities.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin retreats after record-setting run that topped $69,000

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin surged to a record for the first time in more than two years, yet the original cryptocurrency didn’t stay at its new all-time high very long as many traders appear to have taken the opportunity to book some profit.

The token jumped as much as 2.5% to $69,191.95 shortly after 10 a.m. in New York, then almost immediately reversed course in a plunge that at one point sent it 14% below the record to $59,317.16.

“Given that nearly everyone who has ever bought Bitcoin is now in profit, there are decent odds we see some amount of profit taking,” said Zaheer Ebtikar, founder of crypto fund Split Capital.

The volatile price swings on Tuesday were the latest example of the boom-or-bust nature of Bitcoin. Its recent gains had been amplified by bullish bets made in the derivatives market, where investors in the past could get leverage of as much as 100 times the size of their positions in products such as perpetual futures. With Bitcoin reversing its early gains, more than $800 million worth of bullish positions were quickly liquidated in the perpetual futures market, according to crypto data tracker Coinglass.

Bitcoin has experienced a breathtaking rebound this year amid strong demand from new US exchange-traded funds and a looming reduction in growth of the token’s supply. At its high on Tuesday, Bitcoin was up about 63% so far in 2024, outperforming global stocks and spreading optimism across the digital-asset market. ”

In an ironic twist, Bitcoin owes much of its resurgence to a regulator long-viewed as hostile to crypto: the US Securities and Exchange Commission. The SEC approved spot-Bitcoin exchange-traded funds in early January after suffering a legal defeat last year in its attempt to reject them. The move has widened the mass-market accessibility of Bitcoin, helping the crypto sector to turn the page following a bear market in 2022 and a string of subsequent bankruptcies, including the implosion of Sam Bankman-Fried’s FTX exchange.

A steady tide of money has poured into the ETFs issued by investment heavyweights including BlackRock Inc. and Fidelity Investments. The net inflow of almost $8 billion in less than two months is colliding with a looming reduction in Bitcoin’s supply growth — known as the halving — that is also stoking bullish sentiment.

“Breaking all-time highs, with the current momentum in spot ETFs as well as the upcoming halving narrative, would likely awaken true FOMO — fear of missing out — among participants currently watching markets from the sidelines,” said Stefan von Haenisch, head of trading at OSL SG Pte.

The comeback in Bitcoin that started in early 2023 has lifted the overall market value of digital assets to about $2.6 trillion. Its revival from a low in November 2022 caps a bust-to-boom cycle that left the industry it spawned irrevocably changed.

Bitcoin hit its previous peak of $68,991.85 on Nov. 10, 2021, according to data compiled by Bloomberg, powered by the monetary and fiscal stimulus that governments around the world deployed to tackle the impact of Covid-19. The rally was driven partly by crypto purists known for their mantra of “HODL,” the result of a misspelling of “hold” that’s been adopted as an acronym for “hold on for dear life.”

Reckoning in 2022

What was hailed by some as crypto’s ultimate coming-of-age moment back then instead turned out to be the start of a brutal reckoning.

Soon after touching its high in 2021, Bitcoin — and wider crypto markets — began a precipitous descent as central banks turned hawkish to fight runaway inflation. By the end of 2021, Bitcoin’s price had tumbled by almost a third from its peak.

The bear market exposed widespread fraud and reckless risk-taking among many of crypto’s key players, embodied by the implosion of the TerraUSD stablecoin and the collapse of Bankman-Fried’s FTX exchange and related companies. Binance, the largest digital-asset exchange, and its founder Changpeng “CZ” Zhao also came under increased regulatory scrutiny.

Bankman-Fried and Zhao are now awaiting sentencing in the US on criminal charges. TerraUSD creator Do Kwon, who was imprisoned in Montenegro last year for traveling with a fake passport, is fighting extradition to the US, where he’s wanted on fraud charges.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin surpasses $60,000 as demand from ETFs triggers bull run

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

At the heart of the rally that is pushing Bitcoin toward a record high is a simple tenet of economics: Supply and demand.

The surge in demand for the cryptocurrency that’s resulting from new exchange-traded funds is vastly outstripping the amount of Bitcoin that long-time holders are willing to sell. That’s what lit the match that has set the crypto market on fire, with fuel being added from traders chasing the upward momentum, covering short positions and loading up on leveraged bets that the bull run will continue.

It all culminated in a wild session for the cryptocurrency market on Wednesday, with Bitcoin jumping as much as 13% to $63,968 — its first trip above $60,000 since November 2021 — before it pared gains as a surge in traffic triggered trading outages and displays of $0 balances for users of Coinbase, the largest US digital-asset exchange.

Bitcoin has jumped about 40% already this year, triggered mostly by the successful launch of US exchange-traded funds holding the coins which have attracted more than $6 billion since they began trading on January 11. Bitcoin last traded at $60,000 in November 2021, after reaching an all-time high of almost $69,000 earlier that same month.

“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.

At the heart of the rally that is pushing Bitcoin toward a record high is a simple tenet of economics: Supply and demand.
The surge in demand for the cryptocurrency that’s resulting from new exchange-traded funds is vastly outstripping the amount of Bitcoin that long-time holders are willing to sell. That’s what lit the match that has set the crypto market on fire, with fuel being added from traders chasing the upward momentum, covering short positions and loading up on leveraged bets that the bull run will continue.

It all culminated in a wild session for the cryptocurrency market on Wednesday, with Bitcoin jumping as much as 13% to $63,968 — its first trip above $60,000 since November 2021 — before it pared gains as a surge in traffic triggered trading outages and displays of $0 balances for users of Coinbase, the largest US digital-asset exchange.

Bitcoin has jumped about 40% already this year, triggered mostly by the successful launch of US exchange-traded funds holding the coins which have attracted more than $6 billion since they began trading Jan. 11. Bitcoin last traded at $60,000 in November 2021, after reaching an all-time high of almost $69,000 earlier that same month.

“It’s pretty nuts,” said Ryan Kim, head of derivatives at digital-asset prime brokerage FalconX.

“We are starting to see a pretty clear FOMO kind of rally,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “More and more people are just convinced to buy.”

Bitcoin’s trading volume surged to more than $79 billion, or by almost 60% in the past 24 hours, according to data from CoinMarketCap.com. As the original cryptocurrency went higher and higher, Coinbase Global Inc. began experiencing what CEO Brian Armstrong referred to on the social-media platform X as a “LARGE surge of traffic.” The exchange reported that some users were experiencing errors when attempting to buy or sell and that some may see a zero balance in their accounts. “Your assets are safe,” Coinbase said on its website, later adding that activity had begun to normalize.

The intense rally has Bitcoin on pace for its biggest monthly gain since December 2020, when the digital token jumped 50% to around $9,600.

Bitcoin has more than tripled in value since the start of last year, climbing back from a 64% plunge in 2022, in a remarkable comeback from a series of crypto-industry scandals and bankruptcies that had raised questions about the viability of digital assets.

Digital tokens are jumping even though investors have pared back expectations for looser monetary policy this year, evidenced by a rise in US Treasury yields. Bitcoin has outperformed traditional assets like stocks and gold in 2024.

“This reversal is all the more impressive in the light of central banks signaling they intend to keep rates high a while longer, eroding the theory that the next crypto bull would be driven by dropping interest rates,” said Michael Safai, co-founder at quantitative trading firm Dexterity Capital.

The massive inflows into Bitcoin ETFs have prompted some industry watchers to warn of a looming supply squeeze as new coins from miners can’t keep up with demand. Some 80% of Bitcoin’s supply hasn’t changed hands in the past six months, potentially exacerbating the squeeze and adding to the upward price pressure, analysts have said.

The nine new spot ETFs have more than 300,000 Bitcoin, or seven times the amount of new coins mined since Jan. 11. After the halving, expected in late April, the number of new coins mined daily will decline to 450 from 900 currently. If this demand stays constant, with supply of new coins cut in half, advocates are predicting that the price has room to rally.

“All of this combined makes for a supply and demand imbalance,” said Dan Slavin, founder of Chainview Capital, a crypto hedge fund. “More demand than supply means price higher, and with BTC price volatility, price higher doesn’t mean 10%, it means a whole lot more.”

The speed of the rally has some observers warning that it leaves investors susceptible to the boom and bust cycles that have become emblematic of crypto.

“This move has been very sharp, leverage is very high at the moment, as implied by derivatives basis and funding rates, so I would not be surprised by a sharp correction” or 20% or more, said Jaime Baeza, founder at crypto hedge fund AnB Investments. “Nonetheless I would not be shorting into this rally while it continues to move at this pace.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin breaks from recent range to set more than two-year high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin rose to the highest in more than two years, climbing above $54,000, amid growing optimism that persistent investor demand through exchange-traded funds will drive the price of the largest cryptocurrency back to record levels.

“Bitcoin continues its ascent, supported by strong ETF inflows,” said Spencer Hallarn, global head of over-the-counter trading at crypto investment firm GSR.

The original digital currency increased as much as 5.2% to $54,438 after trading in a narrow range for more than a week. It last traded at this level in December 2021, and reached an all-time high of almost $69,000 the prior month.

Investors have poured more than $5 billion into nine ETFs that began trading last month. That figure takes into account the $7.4 billion that has been withdrawn during the same period from the Grayscale Bitcoin Trust, which was converted from a trust.

“Bitcoin is approaching new yearly highs off the back of increased spot demand and momentum traders taking positions off the back of a breakout after a week of consolidation,” said Chris Newhouse, a DeFi analyst at Cumberland Labs. “Interestingly enough, liquidations are not too excessive for the current price action, and shorts who were liquidated were quickly replaced with leveraged longs.”

The open interest, or the number of outstanding contracts, for perpetual Bitcoin futures has seen a noticeable increase, Newhouse said. At the same time, short positions have been forced to be closed in the latest rally. That may be the result of fresh long positions in the market, he said.

Adding to the optimism around Bitcoin was another large purchase of the tokens by MicroStrategy Inc. The enterprise software firm, which has made buying Bitcoin as part of its corporate strategy, said Monday that it purchased another 3,000 or so of the cryptocurrency tokens this month for $155.4 million. It owns about $10 billion in Bitcoin.

Shares of MicroStrategy jumped around 14%, while other crypto-relate stocks also rallied. Coinbase Global rose 14% and Bitcoin miner Marathon Digital jumped almost 20%.

Other cryptocurrencies followed suit, with tokens for Solana and Poly each rising more than 5%. Ether, the second-biggest digial asset, gained about 2%.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin climbs 22%, reclaims $1 trillion crown

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin is riding high.

The world’s largest cryptocurrency has leapt 22% this year to $52,005, pushing it past a market value of $1 trillion mark for the first time since its record heyday of late 2021.

Its resurgence has electrified the broader cryptocurrency market, including ether and other digital coins, which has now exceeded $2 trillion, as per data from CoinGecko.

The sector has been bolstered by the US regulatory approval of several spot bitcoin exchange-traded funds (ETFs), from BlackRock and Fidelity among others, which allow access to the crypto coin vis regular stock exchanges.

The US spot ETFs added 60,000 bitcoin in the first month of their launch, more than twice the miner production in the same period, brokerage Bernstein said.

“The amount of flows far outstrips anyone’s expectation,” said Mark Connors, head of research at Canada’s 3iQ Corp.

Crypto trading volumes are also robust.

Total spot trading volumes on centralized exchanges rose 4.4% to $1.4 trillion in January, recording the fourth consecutive monthly increase and the highest reading since June 2022, a report by London-based researcher CCData said.

The resurgence of interest helped the largest listed crypto exchange Coinbase Global post its first quarterly profit in two years last week .

“The bitcoin appreciation is contributing to better spot bitcoin ETF flows, which is in turn driving bitcoin prices higher, and pulling other tokens higher as well,” JPMorgan analysts said.

$150,000 Bitcoin in 2025?

Many industry watchers say the outlook is looking bright at the moment, with investors buying bitcoin ahead of the blockchain’s “halving” – a preplanned process that reduces mining rewards in half every four years – due in April.

Gautam Chhugani, analyst at Bernstein, expects 2024 to be a break-out year for cryptocurrencies where bitcoin hits all-time highs followed by a peak of $150,000 by mid-2025.

“This optimistic outlook is bolstered by the expectation of an upcoming halving event and the possibility of interest-rate reductions,” CCData analysts said.

While bitcoin remain 32% away from its record high of $69,000, it notched an all-time high against the Japanese yen at 7,919,000 yen last week.

Beware Greedy correction

It’s not all crypto high-fives: There are some signs the market is being by investors driven by FOMO.

CoinGlass’ Crypto Fear & Greed Index, a scale of 0 to 100 where zero denotes “extreme fear” and 100 signals “extreme greed”, hovered at 72. Usually when investors get too greedy, it signals the market is due for a correction.

Riskier assets such as bitcoin could be threatened by persistently high interest rates; traders’ have pushed back bets of a rate cut to June from March following a string of strong US economic data.

“While we remain bullish with liquidity rushing back into risk assets, inflation being sticky over 3% remains a downside risk and would also mean increased volatility across markets,” analysts at crypto trading firm QCP Markets said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin weathers global market slump sparked by inflation jump

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin rode out a surprisingly strong US inflation print that roiled global markets by dimming hopes for rapid interest-rate reductions.

The digital asset traded at $49,500 as of 10:21 am on Wednesday in Singapore, near the highest level in over two years and little changed since Tuesday’s publication of above-forecast figures on US consumer prices in January.

In contrast, the S&P 500 Index slid 1.4% — its worst CPI—day performance since September 2022 — while gold slumped and bond yields soared as traders dialed back expectations for a Federal Reserve rate cut before July.

Bitcoin showed “impressive resilience despite the overnight deterioration in risk sentiment,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. At the same time, separate technical analysis based on chart patterns signals the possibility of a temporary dip to the high $30,000s, he said.

Sector-specific factors have been supporting Bitcoin, including the debut of US exchange-traded funds dedicated to the token. The batch of products from the likes of BlackRock Inc. and Fidelity Investments have attracted a net $3.3 billion since they began trading on Jan. 11.

Meanwhile, the so-called Bitcoin halving due in April will curb supply of the largest digital asset, a development viewed by many as a prop for prices based on historical precedent.

“We expect the market to take a short pause here after a spectacular four-month-long rally, before the upcoming Bitcoin halving takes over the narrative,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.

Bitcoin has tripled since the start of last year in a comeback from the 2022 digital-asset rout. Wagers in the options market indicate traders are targeting prices beyond the record of almost $69,000 achieved in November 2021.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bitcoin surges to $50,000 for the first time since 2021 on ETF demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bitcoin hovered around $50,000 after briefly scaling the closely watched level for the first time in over two years, a remarkable comeback from the crypto scandals and wipeouts that cast doubt on the industry’s viability.

The largest digital asset rose as high as $50,328 on Monday in the US and was trading at $49,980 as of 7:40 a.m. Tuesday in Singapore. It has tripled in value since the start of last year after a 64% plunge in 2022. Bitcoin remains below the all-time high of almost $69,000 achieved in November 2021.

The wild price fluctuations seen since the introduction of Bitcoin more than a decade ago have long been one of the main attractions to speculators. While originally promoted as an alternative to the traditional financial system, the latest rally has been driven by optimism that last month’s US approval of spot Bitcoin exchange-traded funds is leading to greater mainstream acceptance.

“There is a lot of talk about inflow of money into this asset,” said Matt Maley, chief market strategist at Miller Tabak & Co. “I’d also note that the momentum players are getting excited as well.”

Risk Appetite

The resurgence in crypto prices comes as expectations of looser monetary policy burnish the allure of riskier assets. “The appetite for risk has trickled over into digital assets as well,” said Chris Newhouse, a DeFi analyst at Cumberland Labs.

Shares of crypto-related companies also gained Monday with Bitcoin proxy MicroStrategy Inc. rising 11%, trading platform Coinbase Global Inc. increasing 3.8% and miner Marathon Digital Holdings Inc. jumping 14.2%. The positive sentiment could spread to Asian stocks related to digital assets.

Bitcoin has recovered all its losses since the May 2022 implosion of stablecoin TerraUSD, which set in motion a wave of failures that ultimately helped bring down Sam Bankman-Fried’s FTX exchange in November 2022.

By the time FTX went down, the crypto market was already months into a rout that also claimed hedge fund Three Arrows Capital and lender Celsius Network. But the fall of FTX, once one of the top crypto exchanges by trading volume, was even more damaging, with token prices stagnating as liquidity dried up.

Now with Bankman-Fried convicted of fraud, and the Binance exchange’s co-founder Changpeng Zhao awaiting sentencing for US sanctions violations and failing to implement anti-money laundering policies, crypto prices have moved higher as analysts see fewer looming risks to the industry.

ETF Inflows

Nine US spot Bitcoin exchange-traded funds debuted on Jan. 11, while the more than decade-old Grayscale Bitcoin Trust converted into an ETF the same day. The accessibility of ETFs promises to widen the investor base for the token. The new funds have attracted about $9 billion so far, while a more than $6 billion outflow from the Grayscale fund since its conversion seems to be losing steam.

“Enthusiast buyers bring in more enthusiast buyers pushing prices further up,” said Fadi Aboualfa, head of research at crypto-custodian Copper Technologies Ltd. “The cryptocurrency has momentum on the back of several green weeks and has a large chance of going up further when markets see weekly movements upwards of 10% (as we saw last week).”

Optimism about the quadrennial Bitcoin halving due in April is also filtering across crypto. Halving cuts the quantity of Bitcoin that miners receive for operating the powerful computers that verify transactions on the blockchain. The event is often viewed a support for prices based on historical precedent.

Aside from ETF inflows, sentiment toward Bitcoin is “typically positive” during the Lunar New Year holidays that are currently underway in Asia, Fundstrat Global Advisors wrote in a note.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow