In a recent motion to dismiss a case brought by the Securities and Exchange Commission (SEC), cryptocurrency exchange Kraken argued that the SEC’s legal theory misinterprets crucial aspects of the case. The court document, dated May 9, 2024, claims the SEC fails to identify legitimate investment contracts involved in the transactions on Kraken’s platform. Kraken […]
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Bitcoin Halving: Anticipating Price Impact, Miner Challenges, And Long-Term Outlook
The highly anticipated Bitcoin Halving event is close, bringing with it heightened expectations regarding the long-term impact on the Bitcoin price.
There are concerns, however, that this quadrennial event may already be priced in, as Bitcoin recently reached an unprecedented all-time high of ,700 on March 14.
This surge broke the pattern of previous Halvings, where Bitcoin had never surpassed its previous ATH before the event. However, historical data reveals significant price increases in the year following previous Halvings.
Experts Predict Delayed Bitcoin Halving Price Impact
Analysts argue that the compounding impact of reduced issuance takes several months to materialize, suggesting that the Halving itself may not prompt a significant rally before or immediately after the event.
Deutsche Bank analysts share this sentiment, highlighting that substantial price increases have typically occurred in the run-up to previous Halvings rather than immediately after them.
Another factor to consider is the increased production costs for Bitcoin miners resulting from the Halving. As the mining reward decreases, participating in the mining process becomes less profitable.
This has historically led to a decline in the hashrate, the total computational power used for Bitcoin mining. JPMorgan analysts predict that production costs could rise to an average of ,000 after the Halving.
One JPMorgan analyst wrote, “This estimate is also the level we envisage Bitcoin prices drifting towards once Bitcoin-Halving-induced euphoria subsides after April.”
While these factors may influence short-term price movement, historical data reveals that the price of Bitcoin has experienced significant increases in the year following previous Halvings.
The respective price gains for the three previous halvings were 8,760%, 2,570%, and 594%. However, it’s important to note that each successive halving has a diminishing impact on the new supply of Bitcoin.
Mining Industry Shake-Up
In the mining sector, Halving could lead to significant revenue losses, estimated to be around billion annually.
According to Fortune, publicly traded miners have taken measures to increase their resilience, diversify their offerings, and optimize their operations. However, mining stocks have faced challenges, with some experiencing significant declines.
While larger miners may undergo a period of adjustment, smaller miners and pools may be pushed offline. This could result in a wider market share for the surviving miners.
Experts at private asset management firm Bernstein expect the mining industry to consolidate, with “smaller and less efficient players” potentially selling assets to raise capital and shore up their balance sheets.
The increased market dominance of the surviving miners is expected to be profitable over the long term, especially with the continued structural demand for Bitcoin from ETFs.
Timing The Bitcoin Bull Market Peak
Cryptocurrency analyst Rekt Capital has provided insights into the potential timing of Bitcoin’s bull market peak based on historical Halving cycles and the current acceleration seen in the market.
According to Rekt Capital, Bitcoin has traditionally reached its peak in the bull market approximately 518-546 days after the Halving event.
However, the current cycle has shown signs of unprecedented acceleration, with Bitcoin surpassing previous all-time highs roughly 260 days ahead of historical norms. Nonetheless, the recent “pre-Halving retrace” has slowed down the cycle by around 30 days and counting.
Taking into account this accelerated perspective, if Bitcoin’s bull market peak is measured from the moment it breaks its old all-time high, it may occur 266-315 days later. As Bitcoin achieved new all-time highs in March, this suggests a potential bull market peak in December 2024 or February 2025, according to Rekt’s analysis.
Both perspectives carry significance throughout the cycle, especially if the acceleration trend persists. However, prolonged retracements or consolidation periods can slow down the cycle, potentially pushing the anticipated bull market peak further into the future.
At the time of writing, BTC was trading at ,300, up from the ,000 mark reached in the early hours of Friday.
Featured image from Shutterstock, chart from TradingView.com
ETF Analyst Offers Sober Outlook on Newly Approved Hong Kong Bitcoin ETFs; Challenges $25B Inflow Estimate
Following Hong Kong’s authorization of the region’s first spot bitcoin and ethereum exchange-traded funds (ETFs), Bloomberg’s senior ETF analyst Eric Balchunas shared his insights on social media about the new additions. Although there were anticipations of notable capital inflows into the Hong Kong ETFs, Balchunas mentioned that while it’s a positive step forward, he emphasized […]
Bitcoin News
Coinbase Challenges SEC’s Definition of ‘Investment Contracts’ in Crypto Transactions
In a recent legal challenge, Coinbase has filed a brief with the Southern District of New York, seeking permission for an interlocutory appeal against the U.S. Securities and Exchange Commission’s expansive interpretation of what constitutes an “investment contract” in digital asset transactions. This pivotal case could set significant precedents for the cryptocurrency industry in the […]
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Sam Bankman-Fried Files Notice of Appeal, Challenges Conviction and Sentence
Former FTX CEO Sam Bankman-Fried formally lodged an appeal against both his conviction and sentence with the District Court for the Southern District of New York (SDNY) on Thursday. Bankman-Fried’s legal representatives had anticipated this move, having previously requested that he remain at New York’s Metropolitan Detention Center (MDC) to facilitate the appeals process. From […]
Bitcoin News
Sam Bankman-Fried’s Defense Challenges ‘Super-Villain’ Narrative in Sentencing Debate
In a detailed letter to Judge Lewis Kaplan, the legal representatives for Sam Bankman-Fried, the embattled founder of cryptocurrency exchange FTX, have vehemently argued against the government’s recommendation for a 50-year prison sentence, labeling it as a “medieval view of punishment.” Legal Team Contests Proposed 50-Year Sentence for Sam Bankman-Fried as Unjust and Excessive In […]
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Gauntlet Withdraws From Aave Partnership, Citing Governance Challenges
Gauntlet has decided to withdraw from its role as Risk Steward for Aave, pointing to governance and operational challenges as the main reasons. This announcement marks the end of a four-year collaboration that has helped in growing Aave. Gauntlet Ends Partnership With Aave Due to DAO Disputes Gauntlet, a blockchain risk management firm, has officially […]
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Topps Navigates Web3 Hurdles: Shifts to Fortress Amid Regulatory Challenges in NFT Expansion
This week the collectibles and candy company Topps communicated with its customers regarding its non-fungible token (NFT) initiatives. The company acknowledged encountering challenges with a payment service provider in January 2023, leading to a transition to a new provider, Fortress, in September. Nevertheless, regulatory constraints have resulted in the unavailability of custodial wallets for collectors in New York and Texas.
Topps Partners With Fortress, Faces State Regulatory Hurdles in NFT Journey
Topps has acknowledged that the past year presented numerous obstacles for the Web3 community, stating that its own NFT program was “not excluded” from these difficulties. Back in January 2023, Bitcoin.com News covered the story of Wyre altering its withdrawal procedure, a development that occurred several months before the payment company announced shutting down operations in June. As partners, Wyre’s complications had a direct impact on Topps, compelling the firm to temporarily halt its NFT shop and marketplace operations.
In a recent communication to its clients, Topps revealed that it has transitioned to a new service provider, Fortress, and has successfully relaunched both its platform and marketplace. However, this changeover has led to certain delays in progress, particularly in two specific states. “Due to regulatory and state laws, we cannot setup Fortress custodial wallets for collectors based in NY or TX,” Topps detailed. “Our vendors are working with the states to enable functionality in these locations.”
Topps also mentioned its collaboration with its developer and the Avalanche (AVAX) blockchain network. The company emphasized, “We are also continuing our efforts to unlock alternative marketplace solutions for collectors and will provide a timeline update when available,” as it explained its ongoing endeavors. To prioritize these objectives, Topps has chosen to suspend any further NFT drops. This decision comes in the wake of Gamestop concluding operations of its NFT marketplace.
What do you think about the issues Topps faced with Wyre and its transition to Fortress? Share your thoughts and opinions about this subject in the comments section below.
JPMorgan Sees Challenges Ahead for Crypto Market — Downgrades Coinbase Stock
Warning of a difficult time ahead for the crypto market, global investment bank JPMorgan has downgraded Coinbase stock. Emphasizing that crypto prices are already under pressure, JPMorgan warned of “greater potential for cryptocurrency ETF enthusiasm to further deflate,” driving with it lower crypto prices and trading volume.
JPMorgan’s Crypto Market Outlook, Coinbase’s Downgrade
Global investment bank JPMorgan downgraded Coinbase Global (Nasdaq: COIN) from Neutral to Underweight on Monday with a price target of . At the time of writing, Coinbase is trading at 3.43, down 28% over the past month. JPMorgan analyst Kenneth Worthington explained in a note Monday:
While we continue to see Coinbase as the dominant U.S. exchange in the crypto ecosystem and a leader in cryptocurrency trading and investing globally, we think the catalyst in bitcoin ETFs that has pushed the ecosystem out of its winter will disappoint market participants.
“We value the stock on a normalized earnings power at /share, suggesting [a] downside of 35% in its shares,” Worthington noted. While he acknowledged continued progress in initiatives like Coinbase’s derivatives platform and L2 network, Base, he sees the threat posed by a declining crypto market cap since the U.S. Securities and Exchange Commission (SEC) approved spot bitcoin exchange-traded funds (ETFs) on Jan. 10.
The analyst continued to explain that while it has been roughly one week since the launch of spot bitcoin ETFs, the initial net inflow into these funds “seems to be far less than the cryptocurrency community was touting in the financial media, and less than what we witnessed in the first week of flows into the Gold ETF when it launched in 2004.” He added: “We think much of the crypto-industry set a high bar for the ETF launches, and, while meaningful, we think expectations are simply too high and unrealistic.”
The JPMorgan analyst further detailed:
Cryptocurrency prices are already under pressure … We see greater potential for cryptocurrency ETF enthusiasm to further deflate, driving with it lower token prices, lower trading volume, and lower ancillary revenue opportunities for firms like Coinbase.
Last week, another JPMorgan analyst warned of an incoming bitcoin selloff with an anticipated billion Grayscale outflow. Grayscale converted its bitcoin trust (GBTC) into a spot ETF when the SEC approved spot bitcoin ETFs on Jan. 10. However, the conversion has been followed by massive outflows for Grayscale. Meanwhile, several newly launched spot bitcoin ETFs, particularly Blackrock’s Ishares Bitcoin Trust (IBIT), have seen strong inflows.
What do you think about JPMorgan’s view on the crypto market, spot bitcoin ETFs, and Coinbase? Let us know in the comments section below.
World Economic Forum Confronts AI Challenges and Public Cynicism Ahead of Davos Summit
In three days, the World Economic Forum (WEF) Annual Meeting will convene on Jan. 15-19, and much of the world’s elite will be in Davos for the event. Before the meeting, the WEF published the 19th annual edition of the Global Risks Report, which highlights the risks of disinformation, and the impact of advancements in artificial intelligence (AI) and quantum computing. The latest WEF risks report notes the potential risks involved with these technologies could disrupt the economy and create societal divisions.
WEF Report Highlights Concern About Misinformation, AI, and Quantum Computing
The 54th iteration of the World Economic Forum (WEF) is on the brink of unfolding, with an attendance of 2,800 dignitaries hailing from 120 nations. This gathering of the elite will feature key figures such as Li Qiang, the Premier of the People’s Republic of China, alongside French President Emmanuel Macron, and Argentina’s President Javier Milei.
As the forum, named “Rebuilding Trust,” takes center stage, a report by Reuters highlights a pivotal, closed-door meeting concerning the challenging economy. This private meeting, scheduled to be convened by senior executives from Canada’s Manulife Financial and the finance titan Barclays, is set to explore the intricacies of the global economic landscape and rate policies being formulated by central banks.
Meanwhile, considerable attention is being focused on the WEF’s most recent risk report. This report discusses the alleged hazards associated with AI technologies, machine learning, and quantum computing. The authors at WEF have meticulously detailed how malevolent attackers have devised a strategy known as “harvest attacks,” a looming threat poised for activation with the advent of a supercomputer.
The report alarmingly notes that AI technologies, unregulated and accessible, may enable the creation of sophisticated biological weapons, posing a global security threat. WEF researchers warn of the devastating consequences, such as pathogens designed to disable military members or simulate global pandemics. Alongside the WEF’s risk report, people have been discussing “Disease X,” a disease that could result in 20 times more fatalities than the coronavirus pandemic.
At the national and global levels, the 19th WEF risks report calls for strict yet flexible regulations to align technological advancements with societal needs. It emphasizes evolving existing legislation around intellectual property, data protection, privacy, and human rights. Moreover, it underscores the importance of global treaties and agreements in managing adverse outcomes of AI technologies and controlling technological power concentration.
WEF Deals With Social Media Backlash Ahead of Elite Davos Gathering
In the wake of the report and preceding the imminent WEF assembly, public discourse about the elite summit in Davos has been vibrant. The prevailing sentiment towards the WEF on social media platform X reveals a deep-seated distrust towards the organization.
Posts on X predominantly highlight the expenditures on prostitution occurring in Davos, coupled with a strong aversion to receiving climate change lectures from billionaires who travel in convoys of fuel-intensive private jets. As the WEF’s report highlights potential societal splits and disruptions in critical services stemming from technologies such as AI and quantum computing, public skepticism towards the WEF organization itself intensifies.
What do you think about the latest WEF report and the upcoming meeting in Davos? Share your thoughts and opinions about this subject in the comments section below.