Tag: Cryptocurrency

Release – Bit Digital, Inc. Announces Monthly Production Update for April 2024

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on BTBT

NEW YORK, May 6, 2024 /PRNewswire/ — Bit Digital, Inc. (Nasdaq: BTBT) (“Bit Digital” or the “Company”), a sustainable platform for digital assets and artificial intelligence (“AI”) infrastructure headquartered in New York, announced its unaudited digital asset production and corporate updates for the month of April 2024.

Corporate Highlights for April 2024

  • In April 2024, the Company produced 119.3 BTC, a 12.5% decrease compared to the prior month. The decrease relative to the prior month was predominantly due to the reduction of bitcoin block rewards post-halving.
  • The Company’s active hash rate was approximately 2.76 EH/s as of April 30, 2024.
  • Treasury holdings1 of BTC and ETH were 992.4 and 20,241.7 with a fair market value of approximately $60.2 million and $61.0 million, respectively, on April 30, 2024.
  • The BTC equivalent2 of our digital asset holdings as of April 30, 2024, was approximately 2,010.1 or approximately $121.9 million.
  • The Company had cash and cash equivalents of $43.7 million as of April 30, 2024.

Bit Digital AI Update

  • As of April 30, 2024, the Company had 251 servers actively generating revenue from its initial Bit Digital AI contract. The Company earned an estimated $4.1 million of unaudited revenue from this contract during the month of April 2024.

Proof-of-Stake Highlights

  • The Company had approximately 17,184 ETH actively staked in native staking protocols as of April 30, 2024.
  • Bit Digital earned a blended APY of approximately 1.0% on its staked ETH position for the month of April 2024. The decrease in yield was due to the lag time in redeploying its staked ETH after changing its provider for native staking solutions.
  • The Company earned aggregate staking rewards of approximately 13.9 ETH during April 2024.

About Bit Digital

Bit Digital, Inc. is a sustainable platform for digital assets and artificial intelligence (“AI”) infrastructure headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has established a business line, Bit Digital AI, that offers specialized cloud-infrastructure services for artificial intelligence applications.  For additional information, please contact ir@bit-digital.com or visit our website at www.bit-digital.com.

Investor Notice 

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2023. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital’s production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors.

Safe Harbor Statement 

This press release may contain certain “forward-looking statements” relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Footnotes:

1 “Treasury holdings” excludes approximately 2,701 ETH that were transferred to an internally managed fund.

2 “BTC equivalent” is a hypothetical illustration of the value of our digital asset portfolio in bitcoin terms. BTC equivalent is defined as if all non-BTC digital assets, comprised of ETH, and USDC, were converted into BTC as of April 30, 2024, and added to our existing BTC balance. Conversion values are found using the closing price on coinmarketcap.com.

Bitcoin’s Next Major Milestone Is A Few Days Away: The 2024 Halving

Posted on by slightbourne@noblecapitalmarkets.com

A once-every-four-years event in the Bitcoin world is rapidly approaching – the highly anticipated “halving.” Scheduled to occur around April 19th, 2024, this mechanism hard-coded into Bitcoin’s DNA is set to cut the rate of new BTC issuance in half. It’s a pivotal moment that could supercharge the crypto’s scintillating 2024 rally and reignite the bull market.

The halving is a deflationary feature designed to control Bitcoin’s supply over time by reducing the block reward paid to miners. From its inception in 2009 until 2012, miners received 50 BTC per validated block. That number was cut in half to 25 BTC at the first halving in 2012, then halved again to 12.5 BTC in 2016, and most recently to 6.25 BTC in 2020.

Now in 2024, the block reward is set to get cut again from 6.25 to around 3.125 BTC. By systematically slowing the issuance rate over time, Bitcoin’s supply is kept scarce in the face of theoretically increasing demand. This perceived scarcity is one of the factors purported to give Bitcoin its monetary value premium as a form of “digital gold.”

The halving events have historically preceded huge price surges in Bitcoin. A year after the May 2020 halving, Bitcoin rallied over 545%. Similar explosive rallies were witnessed after the 2016 and 2012 events as well. The logic is that as new supply slows after the halving, demand has to be higher to sustain price levels.

Some analysts think the halving impact has already been priced into Bitcoin’s blistering 2024 rally amid optimism around newly launched U.S. Bitcoin ETFs and rising institutional adoption. Since January 1st, BTC has surged over 60% to fresh all-time highs near $74,000.

But many Bitcoin veterans believe the halving could simply be the catalyst that reignites the next true crypto bull cycle akin to cycles past. They point to the recent rally as just the warm-up act before the main event. Adding fuel to the fire, the Federal Reserve is expected to cut interest rates later this year, thereby boosting risk assets like Bitcoin.

According to crypto exchange Bitfinex, Bitcoin could rally 160% in the 12-14 months post-halving to over $150,000 per coin if historical trends play out. While past returns are no guarantee of future performance, the scarcity effects of reduced supply could indeed supercharge demand.

Of course, doubters remain plentiful. There’s the argument that three prior data points create a small sample size from which to draw conclusions. The 2020 cycle was potentially inflated by pandemic stay-at-home narratives. And as Bitcoin matures, price movements may become more decoupled from fundamentals like the halving.

For crypto diehards though, the halving represents a once-in-a-cycle opportunity to get positioned ahead of the next major uptrend in Bitcoin prices. After spending 2022 and much of 2023 brutalized by the brutal crypto winter, many view it as the light at the end of the tunnel. Whether it marks just another bullish catalyst or something even bigger remains to be seen. But Bitcoin’s next milestone moment is fast approaching.

New Highs Across Markets Signal Bull Run For Investors

Posted on by slightbourne@noblecapitalmarkets.com

The stock market is heating up and signaling the return of the bulls, as evidenced by fresh all-time highs in the S&P 500 and a rally across risk assets like Bitcoin and gold. Fueled by booming innovation in artificial intelligence, speculative capital is flowing back into equities in a big way. For investors, it may be time to go hunting for the next big investments.

The S&P 500 broke out to new records this week, finally surpassing the previous highs set back in January 2022 before last year’s punishing bear market. The large-cap index closed at 5233 on Thursday, up over 28% year-to-date. This demonstrates that the decade-plus bull run that began after the 2008 financial crisis may have refreshed legs under it.

The strength comes as AI mania has gripped Wall Street and Main Street. The smash success of OpenAI’s ChatGPT triggered a cascade of investors plowing capital into AI startups and tech giants racing to deploy advanced language models and machine learning systems. Cathie Wood’s Ark Invest funds, which load up on disruptive innovation plays, have surged over 30% in 2023.

Even the traditionally cautious money managers are piling in. Just this week, e-commerce juggernaut Amazon announced a staggering $4 billion investment into AI research firm Anthropic. It shows the FANG giants remain at the vanguard of cutting-edge tech adoption and are more than willing to spend big to stay ahead of the curve.

The AI buzz has spurred a speculative frenzy not seen since the meme stock and SPAC manias of 2021. The heavy inflows, plus robust economic data, have pushed U.S. stock indexes to their most overbought levels since the rally out of the pandemic lows. Technical indicators suggest more volatility and pullbacks could be in store, but the trend remains firmly bullish for now.

The buying spree has spilled over into other risk assets like cryptocurrencies and gold. Bitcoin soared above $70,000 recently to its highest levels ever. The original crypto has rallied over 70% in 2023 as institutions warm back up to the space and the AI buzz rekindles visions of decentralized Web3 applications and business models.

Not to be outdone, gold has surpassed $2,200 per ounce and is trading at levels far greater than what was seen in 2020 during the pandemic turmoil. Bullion is benefiting from growing concerns over persistent inflation and fears the Federal Reserve could push the economy into recession as it keeps raising interest rates aggressively. The yellow metal is increasingly seen as a haven in times of economic and banking system stress.

Combined, the advancing prices and frothy trading action point to the return of the animal spirits last seen at the height of the Robinhood/Reddit meme stock craze from two years ago. Caution is certainly warranted, as downside risk remains with growing chances of an economic hard landing from the Fed’s inflation fight.

But the market often climbs a wall of worry, and the blowout action indicates speculators are back in full force. For investors able to navigate the volatility, this may be an ideal time to put capital to work and research the next big opportunities to ride the bull’s coattails.

As ARK’s Cathie Wood stated, “Given the breakthroughs in AI broadly, we believe we are living in the most profound period of commercial invention ever.” Profound invention tends to create extreme investment returns for those with the foresight to invest early in transformative technologies.

For investors searching for the potential 100-baggers of tomorrow across sectors like AI, quantum computing, biotech, fintech, and cybersecurity, buying dips and dollar-cost averaging into high-conviction positions could pay massive dividends down the road. The market mania may only be just beginning.

Crypto’s Fallen Star: Sam Bankman-Fried Sentenced to 25 Years in Massive FTX Fraud Case

Posted on by slightbourne@noblecapitalmarkets.com

The meteoric rise and catastrophic fall of Sam Bankman-Fried reached its climax on Thursday as the former cryptocurrency wunderkind was sentenced to 25 years in federal prison for orchestrating a massive fraud that stole billions from customers of his failed FTX exchange. The sentence handed down by U.S. District Judge Lewis Kaplan represents a stunning downfall for the 32-year-old who was once hailed as the new face of the crypto industry before becoming a pariah following FTX’s implosion last year.

Bankman-Fried, who founded and led FTX until its rapid collapse in November 2022, was convicted in October of defrauding investors and misappropriating billions in customer funds. Prosecutors alleged the former billionaire siphoned $14 billion in customer deposits from FTX to fund risky bets at his Alameda Research hedge fund, while lying to investors and customers about FTX’s financial condition.

“He betrayed the trust of his customers, investors, lenders, and prosecutors with extraordinary measures of greed and arrogance,” Kaplan said in delivering the 25-year sentence. The judge lambasted Bankman-Fried’s “exceptional flexibility with the truth” and “brazenness” in carrying out the fraud schemes.

While his defense attorneys argued for leniency and just 6.5 years behind bars, prosecutors pushed for decades in prison, saying Bankman-Fried’s crimes represented one of the most brazen frauds in American history. In the end, the 25-year term landed in the middle, though Kaplan made clear his disdain for Bankman-Fried’s actions and lack of remorse, calling his conduct “reprehensible.”

The sentencing bookends a shocking downward spiral for the former crypto prodigy whose name was once synonymous with the soaring growth and potential of digital currencies and assets. At the height of his success, Bankman-Fried was celebrated for building a multi-billion dollar crypto empire while embracing ethics and effective altruism. But it all unraveled in spectacular fashion when the house of cards collapsed at FTX.

The fallout from FTX’s bankruptcy shook faith in the crypto industry to its core. Retail investors lost life savings, major companies faced financial ruin, and cries for more regulation rang out globally. In the immediate aftermath, Bitcoin and other top cryptocurrencies saw massive sell-offs amid a “crypto winter” as investors fled the sector.

However, over a year later, the crypto market has mounted a stunning resurgence that may signal the turning of the page on one of its darkest chapters. Led by Bitcoin’s meteoric rise above $30,000 for the first time since the FTX collapse, the total crypto market cap has rebounded to levels not seen since mid-2022.

The bulls have been let loose again as more institutional investors embrace crypto, with BlackRock recently launching a spot Bitcoin private trust to provide direct ownership of the leading digital currency. Crypto trading volumes and activity on leading exchanges like Coinbase and Binance have also surged.

While Bankman-Fried begins serving his decades-long sentence that will take him into his 50s, the cryptoworld he once towered over has re-emerged in full force. The scandals spurred greater regulatory scrutiny and industry reform, but it did not freeze out crypto’s underlying blockchain technology and innovative potential.

For the disgraced founder, his 25-year prison term essentially equates to a life sentence in the prime years of his career. The judge made clear that Bankman-Fried’s actions were “reprehensible” and deserved severe consequences as a deterrent to corporate bad actors. Crypto’s future, however, shines brightly again – a stark contrast to the deep craters left in the wake of FTX’s seismic implosion just over a year ago.

Bitcoin Soars to New Heights: Opportunities in the Crypto Market and Beyond

Posted on by slightbourne@noblecapitalmarkets.com

Bitcoin, the world’s largest cryptocurrency, has once again captured the attention of investors worldwide by setting a new all-time high price of nearly $69,000. This remarkable achievement serves as a reminder that even in the ever-evolving landscape of finance, there are always opportunities to be found – often in unexpected places.

The recent surge in Bitcoin’s value can be attributed to the launch of several spot Bitcoin exchange-traded funds (ETFs) earlier this year. These ETFs have provided everyday investors with unprecedented access to the cryptocurrency market, fueling a surge in demand that has outpaced the available supply. With institutional investors and ETFs scooping up more Bitcoin than is being mined daily, a supply crunch has emerged, further driving up prices.

While the crypto market has been the center of attention, this event also highlights the potential for overlooked investment opportunities in other sectors. Just as Bitcoin was once dismissed by many as a passing fad, there are countless emerging growth companies and innovative technologies that are currently being underestimated by the broader market.

Small-cap stocks, in particular, often fly under the radar of mainstream investors, yet they can offer significant upside potential for those willing to conduct thorough research and identify promising ventures. From groundbreaking medical innovations to disruptive technologies reshaping entire industries, the small-cap universe is brimming with hidden gems waiting to be discovered.

The key to successful investing in these often-overlooked areas lies in taking a long-term perspective and maintaining a diversified portfolio. Just as the crypto market has experienced its fair share of volatility over the years, emerging growth companies can be subject to significant price fluctuations as they navigate the challenges of scaling their operations and gaining market share.

However, for those with the patience and risk tolerance to withstand these ups and downs, the potential rewards can be substantial. Many of today’s industry titans, from Amazon to Tesla, were once small-cap companies with ambitious visions and innovative products that captured the imagination of forward-thinking investors.

As the Bitcoin story continues to unfold, it serves as a powerful reminder that investment opportunities can arise in unexpected places. By keeping an open mind, conducting thorough research, and maintaining a disciplined approach, investors can position themselves to capitalize on the next big thing – whether it’s in the realm of cryptocurrencies, cutting-edge technologies, or any other sector ripe for disruption.

Take a moment to take a look at Bitcoin Depot and Bit Digital who are exploring and pioneering the cryptocurrency sector.

Bitcoin Surges Past $50,000 For First Time in Over 2 Years

Posted on by slightbourne@noblecapitalmarkets.com

The price of bitcoin has crossed over the psychologically important $50,000 level this week for the first time since December 2021. The world’s largest cryptocurrency by market capitalization rallied roughly 15% over the past week to hit $50,000 on Monday afternoon, riding a wave of bullish sentiment in crypto markets.

Several factors are contributing to bitcoin’s renewed momentum above $50,000. Firstly, the recent launch of spot bitcoin exchange-traded funds (ETFs) has provided a boost to bitcoin prices. These ETFs, which hold actual bitcoin rather than bitcoin futures, have seen strong inflows from investors. According to data from Bloomberg, spot bitcoin ETFs recorded their second largest day of inflows last Friday, totaling over $540 million.

The two largest bitcoin ETFs – BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Trust – have accumulated substantial assets after only one month of trading. The combination of easy access to bitcoin exposure through these ETFs along with optimism around the scheduled halving event in 2024 seems to be driving enthusiasm and higher prices.

The upcoming bitcoin halving, expected to occur in mid-2024, will see the bitcoin mining reward cut in half from 6.25 bitcoin per block currently to 3.125 bitcoin. This quadrennial event has historically been bullish for bitcoin prices over the long-term. According to a recent report from Grayscale Investments, while the halving poses challenges to miners in the form of reduced block rewards, innovations like Layer 2 scaling solutions could offset this by lowering transaction fees and enhancing throughput.

Beyond market structure changes like the ETFs and the halving, bitcoin also received a small boost from a geopolitical event last week. The re-election of pro-bitcoin President Nayib Bukele in El Salvador for another 5 year term was cheered by cryptocurrency advocates. El Salvador under Bukele was the first country to make bitcoin legal tender in 2021. While Bukele’s visions of a bitcoin-powered economy have stumbled, his re-election signals continued support.

After hitting the historic $50,000 mark, bitcoin pulled back modestly but has remained firmly above $48,000 over the past few days. The key question now is whether bitcoin can rise and continue trading stably above $50,000, which would signal a definitive change in market structure according to analysts.

Take a moment to take a look at Bit Digital, a large-scale bitcoin mining business and a sustainability focused generator of digital assets.

Previous rallies above $50,000 over the past two years have been short-lived, with bitcoin failing to establish support at those levels. In March 2022, bitcoin briefly topped $48,000 before slipping back down. And in early January this year, bitcoin hit $50,000 but quickly dropped below $45,000 within days.

This time, bitcoin investors are hopeful that conditions are ripe for bitcoin to finally break out above $50,000. Analysts at Bernstein recently predicted a “fear of missing out” or FOMO rally in bitcoin, as momentum builds following the breach of $50,000. However, bitcoin remains highly volatile, as evidenced by its drop from all-time highs near $69,000 in November 2021 down to below $20,000 by the end of 2022.

Market analysts will be monitoring key support and resistance levels, like the 200-day moving average near $46,500. As long as bitcoin can avoid dropping below these key technical levels, the bullish case remains intact. But buyers will need to maintain consistent support above $50,000 and catalyze follow-on demand in order for this latest move higher to be sustainable. Other factors like rising interest rates and broad macroeconomic uncertainty still pose downside risks.

Nonetheless, the combination of factors lining up in bitcoin’s favor – the surging interest and inflows into spot ETFs, optimistic narrative around the halving, and the breakout above $50,000 – has many crypto investors calling this bitcoin’s next bull run. As bitcoin solidifies its status within mainstream finance and garners attention from major institutional players like BlackRock and Fidelity, the dynamics appear to be changing in favor of greater price stability and less volatility. But bitcoin’s freewheeling ways are difficult to tame. We will soon find out in the coming weeks and months if bitcoin has finally matured enough to leave its past boom and bust cycles behind.

What Investors Need to Know if Bitcoin ETF Gets the Green Light

Posted on by slightbourne@noblecapitalmarkets.com

The long-awaited arrival of SEC-approved bitcoin exchange-traded funds (ETFs) promises to open the floodgates for mainstream investor exposure to the world’s largest cryptocurrency. After years of rejections and delays, the SEC appears ready to finally allow spot bitcoin ETFs that hold the digital asset directly.

This stamp of regulatory approval positions bitcoin to go fully mainstream in 2024. Financial advisors can now more easily allocate client assets into bitcoin through the familiar ETF wrapper. Major financial institutions and retirement accounts like 401(k)s will likely broaden access as well.

For crypto-curious investors, a spot bitcoin ETF offers a simpler way to gain exposure without dealing with digital wallets and exchanges. But navigating this new ETF landscape won’t be easy. Here’s what investors need to know:

Shop Around for Fees

Dozens of issuers have spot bitcoin ETF filings awaiting SEC approval. With so much competition, expense ratios are plunging. Several issuers like ARK Invest and Bitwise have waived fees completely for six months. Others range from 0.25% to over 1%. Pay close attention to fee structures, which will vary greatly between issuers.

Monitor Premiums and Discounts

While bitcoin itself is highly liquid, new ETFs may deviate from their net asset value or trading price. Factors like redemption policies and authorized participant rules could cause ETF shares to trade at small premiums initially. Keep an eye on premium/discount behavior, favoring ETFs that demonstrate efficient trading and tight spreads.

Consider Futures-Based ETFs Too

Spot bitcoin ETFs remove the futures curve drama, but don’t ignore futures-based funds. The ProShares Bitcoin Strategy ETF (BITO) has built a solid track record since launching in October 2021. Futures-based strategies could still make sense for tactical traders and institutional investors, despite added complexity.

Temper Short-Term Expectations

Bitcoin ETFs are unlikely to immediately trigger massive inflows from retail and institutional investors. Assets may reach $10 billion this year, but that’s tiny compared to bitcoin’s $900 billion market cap. Widespread adoption will take time as investors wait and see how these new products function.

Beware the Crypto Bubble

While bitcoin has rebounded from its 2022 lows, speculative excess still persists. Hundreds of altcoins with no utility or differentiators have billion dollar valuations. Cryptocurrency markets remain prone to volatility and hype cycles. ETFs offer exposure, but be wary of parabolic rallies.

Think Long-Term Store of Value

The bitcoin blockchain and protocol aren’t going away. Only 21 million BTC can ever be mined. Consider using ETFs as part of a diversified portfolio focused on bitcoin’s potential as a long-term store of value, similar to gold. But also be prepared for 50%+ drawdowns during times of market stress.

Look Beyond Bitcoin

Bitcoin ETFs are just the beginning. The SEC has yet to approve ETFs holding other major cryptocurrencies like ether and solana. If these are eventually permitted, diversified crypto ETFs could become an enticing one-stop shop. Institutional investors are already trading cryptocurrency index funds tracking a basket of assets.

Understand the Tax Implications

Cryptocurrency remains subject to complex U.S. tax rules that classify it as property. Investors must pay capital gains taxes whenever selling at a profit, including cashing out of ETFs at a higher bitcoin price. Long-term tax rates are more favorable. Financial advisors can help craft tax-smart crypto strategies.

See How Institutions Respond

Large asset managers and financial institutions will need time to evaluate these new products before allowing clients access. Their embrace could drive billions in inflows. But if major players bar access or remain cautious, retail adoption may lag. Pay attention to their stance.

Approval of spot bitcoin ETFs removes a huge roadblock to mainstream crypto investment. But it’s still early days. As investors navigate this rapidly evolving landscape, following prudent portfolio strategies and avoiding FOMO will be key to capitalizing on this milestone.

Bitcoin Tops $45K for the First Time Since 2022

Posted on by slightbourne@noblecapitalmarkets.com

The cryptocurrency market is off to a strong start in 2024, led by Bitcoin’s climb back above $45,000 for the first time since April 2022. Bitcoin gained over 150% in 2023, marking its best annual performance since 2020. Analysts say bitcoin’s resurgence is driven by growing optimism that the long wait for a spot bitcoin exchange-traded fund (ETF) may finally end in early 2024.

The Securities and Exchange Commission has rejected numerous proposals for a spot bitcoin ETF over the years, arguing the crypto market is too susceptible to manipulation. But the SEC appears to be warming up to the idea amid maturing crypto regulation and infrastructure. The approval of a spot bitcoin ETF would allow mainstream brokerages to offer crypto exposure to millions of investors for the first time.

Ethereum, the native cryptocurrency of the ethereum blockchain, also rallied to start the year. It gained over 90% in 2023 despite volatility that whipsawed the crypto market. Ethereum has benefited from upgrades to the ethereum network as it transitions to a more energy-efficient proof-of-stake consensus model.

Other layer-1 blockchain tokens like Solana’s SOL, Polygon’s MATIC and Polkadot’s DOT saw steep gains in 2023 as well. The growth of decentralized finance and Web3 applications continues to drive interest in Ethereum rivals.

The upbeat momentum in crypto has also lifted shares of companies with significant digital asset exposure. Crypto exchange Coinbase saw its stock jump in early trading, along with bitcoin holding firm MicroStrategy.

Mining companies like Riot Blockchain and Bit Digital were up sharply as higher bitcoin prices improve profitability for crypto miners. Even crypto-adjacent equities like Tesla, which holds bitcoin on its balance sheet, have outperformed the broader stock market recently.

Macroeconomic trends are also providing tailwinds for the crypto market after a brutal 2022 bear market. The collapse of the Terra/Luna ecosystem, bankruptcies of key industry players like Celsius Network and FTX, and meltdown of algorithmic stablecoins wiped over $2 trillion from the crypto market cap at its lowest point.

But expectations that the Federal Reserve and other central banks could start cutting interest rates in 2024 have renewed appetite for risk assets. Lower rates tend to benefit high-growth, speculative investments. The crypto market meltdown also flushed out excess leverage and speculative frenzy.

With crypto giants like FTX and Alameda Research gone, attention is returning to building and expanding the underlying utility of blockchain networks. The growth of decentralized applications and services like decentralized finance (DeFi), non-fungible tokens (NFTs), metaverse virtual worlds and Web3 remain long-term tailwinds for crypto adoption.

Some analysts predict the crypto market could get an added boost in 2024 from the U.S. presidential elections. Bitcoin’s four-year reward halving schedule has coincided with recent election year performance. If the crypto bull market resumes as 2024 dawns, analysts say the next Bitcoin halving could fuel further growth.

While risks like regulation and security breaches remain, the crypto industry has weathered previous downturns. With fundamentals still favorable for broader blockchain adoption, the crypto market appears ready to leave its 2022 woes behind as it charges into the new year.

MicroStrategy Stock Skyrockets 337% in 2023 on Bitcoin Play

Posted on by slightbourne@noblecapitalmarkets.com

Business intelligence software company MicroStrategy has seen its stock price explode in 2023, gaining a massive 337% so far this year. This meteoric rise is almost entirely fueled by the company’s big bet on bitcoin starting in 2020.

Unlike other major tech stocks like Nvidia and Meta which rely on growing revenue and market share, MicroStrategy’s appeal to investors stems from its holdings of the popular cryptocurrency bitcoin. The company has accumulated around 174,530 bitcoins worth approximately $7.65 billion as of late December 2022. MicroStrategy began buying bitcoin in July 2020 as a way to invest its excess corporate cash.

At the time, MicroStrategy was a relatively small software company with minimal profits. But its co-founder and then-CEO Michael Saylor saw an opportunity to boost returns on idle cash by purchasing bitcoin, which he viewed as “digital gold.” This allowed stock investors to gain exposure to bitcoin prices without directly buying the cryptocurrency.

Remarkably, MicroStrategy’s market valuation is now over $8 billion, meaning 90% of its value comes directly from its bitcoin holdings rather than its core software business. When bitcoin rises or falls, so does MicroStrategy stock. For example, 2022’s bitcoin plunge of 64% dragged MicroStrategy shares down 74%.

Saylor’s Bitcoin Bet Pays Off Big for MicroStrategy

Michael Saylor first announced MicroStrategy’s new bitcoin buying strategy in July 2020. At the time, the company had over $500 million in cash and short-term investments, but was earning little return due to rock-bottom interest rates.

Saylor decided that bitcoin offered a better store of value than either cash or gold. By Q4 2020, MicroStrategy held over 40,000 bitcoins and its stock had doubled for the year. Fast forward to 2023, and Saylor’s bitcoin bet has multiplied MicroStrategy’s stock price over 5-fold from its pre-bitcoin days.

Despite stepping down as CEO in 2022, Saylor remains executive chairman and a bitcoin bull. He expects mainstream adoption of bitcoin as an asset class to grow from 0.1% of global capital to 0.2% and higher. While bitcoin ETFs may provide some competition when approved, MicroStrategy retains an advantage in actively managing its bitcoin trove.

MicroStrategy Now Viewed as a Bitcoin Holding Company

MicroStrategy was founded in 1989 and operated for most of its history as an under-the-radar provider of business intelligence software. But bitcoin has thrust the company into the spotlight, to the point where it is now valued essentially as a bitcoin holding company.

This represents a novel use of corporate cash. Some other companies like Tesla and Block (Square) have also put portions of their balance sheet into bitcoin. However, MicroStrategy is unique in that bitcoin comprises 90% of its market valuation.

In 2023, investors have rewarded MicroStrategy’s first-mover status with a “scarcity premium” as one of the only publicly traded ways to gain pure-play exposure to bitcoin prices. However, this premium could erode as new spot bitcoin ETFs enter the market. But for now, MicroStrategy remains a one-of-a-kind bitcoin play for stock investors.

MicroStrategy Keeps Buying More Bitcoin

Despite its already enormous bitcoin position, MicroStrategy shows no signs of letting up in its accumulation of the cryptocurrency. In November 2022, the company purchased another 16,130 bitcoins for over $593 million.

MicroStrategy has adopted an aggressive “buy the dip” strategy, utilizing its steady software cash flows to continue building its bitcoin treasury. So far this strategy has paid off tremendously for shareholders.

However, detractors point to the huge risks inherent in MicroStrategy’s ultra-high concentration in such a volatile asset. Bitcoin prices can see massive swings, as in 2022 when it fell from nearly $69,000 to under $17,000 by year-end. But Michael Saylor firmly believes bitcoin will continue appreciating over the long term.

MicroStrategy Stock Surges as Bitcoin Short Sellers Get Burned

With such an enormous bet on bitcoin, it’s not surprising that MicroStrategy has been a prime target for short sellers betting against further bitcoin-fueled stock gains. About 23% of available MicroStrategy shares are currently shorted, the second highest percentage among crypto-related stocks.

But so far, the short sellers have been the ones getting burned. In just the first three quarters of 2022, over $2 billion worth of short positions were covered at a loss. Data shows short sellers lost approximately $1.4 billion specifically on bearish MicroStrategy bets this year.

If bitcoin rebounds strongly in 2023 as many analysts expect, it could force even more short covering and propel MicroStrategy shares even higher. This dynamic explains why MicroStrategy has so dramatically outpaced bitcoin itself in 2023, more than doubling the cryptocurrency’s own gains.

Conclusion: One-of-a-Kind Bitcoin Play

In conclusion, MicroStrategy has morphed from an obscure software maker into a one-of-a-kind publicly traded bitcoin holding company. It offers stock investors unparalleled exposure to bitcoin’s price movements, both good and bad.

Led by a crypto-bullish CEO, the company has accumulated a $7.65 billion bitcoin hoard and adopted a “buy the dip” strategy. So far, this move has massively rewarded shareholders in 2023, though not without major risks. With bitcoin poised to potentially become a growing asset class, investors are keeping a close eye on this unique bitcoin proxy play in MicroStrategy stock.

Take a moment to look at Bitcoin Depot and Bit Digital, emerging digital asset companies.

El Salvador’s Cryptocurrency Renaissance: Unveiling the Historic Bitcoin Bonds and the Rise of Bitcoin City

Posted on by slightbourne@noblecapitalmarkets.com

In a revolutionary move, El Salvador has solidified its place as a trailblazer in the world of cryptocurrency by announcing the regulatory approval and issuance of Bitcoin bonds, colloquially known as “Volcano Bonds.” Set to launch in the first quarter of 2024, these bonds represent a groundbreaking step towards financing the construction of “Bitcoin City,” a visionary project fueled by thermal energy from a volcano. As El Salvador continues to make waves in the crypto space, this article explores the intricacies of the Volcano Bonds and the broader implications for investors and the country’s economic landscape.

A Visionary Leap into Cryptocurrency

Led by President Nayib Bukele, El Salvador made history in 2021 by declaring Bitcoin as legal currency alongside the US dollar. The objective was to streamline remittances and enhance financial services accessibility for the 70 percent of Salvadorans lacking a traditional bank account. Despite this bold move, a May 2021 poll by the Central American University revealed that 71 percent of respondents believed Bitcoin had not positively impacted their family’s economic situation.

However, undeterred by public sentiment, El Salvador pressed on, guided by a vision that extended beyond mere adoption to the creation of a transformative “Bitcoin City” in the country’s eastern region. This city, powered by thermal energy harnessed from a volcano, aimed to be a beacon of innovation and sustainability.

The Volcano Bonds: Financing the Future

The Volcano Bonds, set to launch in early 2024, are instrumental in turning President Bukele’s vision into reality. Approved by the Digital Assets Commission (CNAD), these bonds represent a financial instrument designed to address sovereign debt obligations while providing the capital needed to construct Bitcoin City. With an allocation of at least $1 billion from the Volcano Bonds earmarked for the project, El Salvador is poised to create a technological marvel that showcases the synergy between cryptocurrency and sustainable development.

Building Bitcoin City: A Green Technological Marvel

Bitcoin City is more than just a construction project; it symbolizes El Salvador’s commitment to sustainable and innovative urban development. The use of thermal energy from a volcano not only underscores the country’s unique geographical advantages but also signals a departure from traditional energy sources, aligning with the global push for green initiatives.

As investors look toward the horizon, the construction of Bitcoin City becomes an intriguing prospect. The success of this project could potentially inspire similar endeavors worldwide, with governments and private entities exploring the integration of cryptocurrency in urban planning and development.

El Salvador’s Growing Bitcoin Holdings

To solidify its commitment to cryptocurrency, the Salvadoran government has steadily increased its Bitcoin holdings. Currently holding 2,381 bitcoins, the government’s latest purchase of 80 bitcoins in July 2022 reflects a strategic approach to accumulating this digital asset. President Bukele further announced a plan to acquire one bitcoin daily starting from November 17, 2022, although the government has not disclosed whether this target has been met.

This concerted effort to amass Bitcoin underscores El Salvador’s belief in the long-term value and potential of cryptocurrency. For investors, it signals a country actively diversifying its portfolio, adding a digital asset to its reserves in a strategic move that aligns with the evolving landscape of global finance.

Take a moment to take a look at Bit Digital (BTBT), a large-scale bitcoin mining business and a sustainability focused generator of digital assets.

Trading on the Bitfinex Securities Platform

The issuance of the Volcano Bonds is set to take place on the Bitfinex Securities Platform, a registered trading site for blockchain-based equities and bonds in El Salvador. This move not only streamlines the trading process but also marks a bridge between traditional financial systems and the burgeoning cryptocurrency landscape. It invites investors to participate in a novel financial instrument backed by the transformative power of blockchain technology.

Beyond Volcano Bonds: El Salvador’s Cryptocurrency Ventures

El Salvador’s foray into cryptocurrency extends beyond the Volcano Bonds. In a recent development, the country launched a $1 billion Bitcoin mining project in collaboration with Luxor Technology and Tether. Dubbed “Volcano Energy,” this initiative aims to establish a 241 MW generation park named in honor of the project, where Bitcoin mining will take center stage.

As El Salvador actively explores the potential of cryptocurrency in diverse sectors, investors keen on embracing the future of finance should keep a close eye on the country’s progressive initiatives. The Volcano Energy project, in particular, demonstrates the integration of Bitcoin mining with traditional energy infrastructure, offering a unique investment avenue for those looking to diversify within the cryptocurrency space.

Conclusion: Investing in El Salvador’s Cryptocurrency Odyssey

El Salvador’s journey into the world of Bitcoin bonds, Bitcoin City, and innovative cryptocurrency projects is not only historic but presents a unique investment landscape. As the Volcano Bonds come to fruition in the first quarter of 2024, investors have an opportunity to be part of a transformative chapter in the country’s economic history.

The success of Bitcoin City and other cryptocurrency initiatives in El Salvador could potentially pave the way for similar endeavors globally. Investors, whether seasoned cryptocurrency enthusiasts or those exploring the space for the first time, should closely monitor the developments in El Salvador. The “Bitcoin City” powered by a volcano is not just a symbol of technological advancement but a beacon for those seeking investment opportunities in the ever-evolving world of cryptocurrency. El Salvador’s cryptocurrency renaissance is unfolding, and investors have a front-row seat to witness the fusion of tradition and innovation in the heart of Central America.

Coinbase Aims for Crypto Crown as Binance Stumbles

Posted on by slightbourne@noblecapitalmarkets.com

With the U.S. government cracking down on Binance, slapping the world’s largest cryptocurrency exchange with $4.3 billion in fines and forcing its maverick founder Changpeng “CZ” Zhao to relinquish control, arch-rival Coinbase sees an opening to reclaim market share by playing the role of the “good guy” traded on Wall Street.

Coinbase shares have jumped some 18% over the past week to around $118 as CEO Brian Armstrong asserted last Tuesday’s settlement finally “closes that chapter of crypto’s history” in which Binance flouted global regulations while handling over $15 trillion in trades since 2017. By contrast, Armstrong now aims to position Nasdaq-listed Coinbase as the compliant, institutional exchange best positioned to capitalize on the crypto industry’s shift toward greater oversight.

“Building a company offshore, skirting regulation, it’s just not going to work,” Armstrong told CNBC, taking a shot across the bow of both Binance as well as consumers who transacted on the exchange drawn by its swift listings of new – often risky – digital assets. With federal agencies now policing crypto’s “Wild West” era, Armstrong wants to reassure investors that Coinbase will work hand-in-hand with authorities, supporting his belief that crypto can operate by the same rules as traditional finance.

Whether such harmony emerges remains clouded by legal issues confronting Coinbase itself, including an ongoing SEC lawsuit filed last June. While Armstrong feels “very good” about Coinbase’s defense and his aim is full regulatory clarity, such certainty seems distant given bitcoin’s recent plunge marking another crypto winter. Nonetheless, the humbling of the industry’s one-time dominant exchange gives his company a momentary edge.

Binance’s astronomical rise represented a meteoric challenge to Coinbase’s early market supremacy following its 2012 launch and 2017 debut on public markets weeks before bitcoin hit a historic peak near $20,000. Former Bloomberg programmer and Tokyo Stock Exchange developer Changpeng Zhao founded Binance in Shanghai in 2017, developing technical capabilities allowing it to scale at warp speed by listing new cryptocurrencies faster than cautious Coinbase.

With an opaque corporate structure based initially in Asia and subsequently the Cayman Islands, Binance also dodged oversight as global regulators sounded alarms. But its explosive growth quickly afforded Zhao celebrity status as one of crypto’s biggest whales and most vocal proselytizers. Meanwhile, to keep pace with its insurgent rival now commanding the majority of trading volumes, Coinbase rushed to expand its offerings but continued adhering to compliance standards in order to maintain institutional investor confidence.

Yet as U.S. authorities targeted Binance last year with a series of harsh punitive actions, momentum swung back toward its compliant competitor. Both the CFTC and SEC ultimately launched suits against Zhao’s exchange for allegedly violating investor protection statutes, culminating in extensive settlement terms compromising Binance’s autonomy going forward. With its renegade era under CZ seemingly finished, Armstrong aims to leverage Coinbase’s head start collaborating openly with financial watchdogs.

Despite his bravado about closing an ignominious chapter for crypto, Armstrong must still confront lingering suspicions from regulators like the SEC about whether any exchanges can provide adequate investor protections around highly speculative digital assets. Coinbase itself has fought SEC assertions that it facilitated unregistered securities trades.

While the two suits differ, both target core business models questioning whether current legislation written before crypto’s advent can properly govern such technologies. Beyond exacting large fines, authorities want to slow crypto trading – putting platforms like Coinbase and Binance in an existential vice grip complicated by token assets’ fluctuation between currency and security classifications.

How Congress and agencies like the SEC ultimately delineate acceptable crypto activity under existing statutes or new legislation could determine which exchanges remain standing. Ironically victories could stem as much from legal ingenuity as technology innovation. But with Binance at least temporarily defanged, Coinbase remains well positioned to shape crypto’s second act blending Wall Street’s institutional trust with Silicon Valley’s disruptive daring.

Clearly the crypto landscape entering 2024 stands on shifting sands, clouded by bitcoin’s swoon, regulatory turbulence and possible global recession. Yet should pioneer blockchain currencies and exchanges somehow emerge resilient, Coinbase sits ready to seize the market share boon a humbled Binance left on the table. After years sparring in crypto’s octagon, this match’s decision appears nearer – though mainstream adoption stays stubbornly out of reach.

Binance CEO Pleads Guilty to Money Laundering

Posted on by slightbourne@noblecapitalmarkets.com

In a watershed moment for cryptocurrency oversight, Changpeng Zhao, billionaire founder of crypto exchange Binance, pleaded guilty on Tuesday to charges related to money laundering and sanctions violations. Binance itself also pleaded guilty to similar criminal charges for failing to prevent illegal activity on its platform.

The guilty pleas are part of a sweeping, coordinated crackdown on Binance by U.S. law enforcement and regulators. As part of the settlement, Binance agreed to pay over $4 billion in fines and penalties to various government agencies. Zhao himself will personally pay $200 million in fines and has stepped down as CEO.

The implications of this development on the broader crypto sector could be profound. As the world’s largest crypto trading platform, Binance has played an outsized role in the growth of the industry. Its legal troubles and the record penalties imposed call into question the viability of exchanges that flout compliance rules in the name of rapid expansion.

Prosecutors allege that Binance repeatedly ignored anti-money laundering obligations and allowed drug traffickers, hackers, and even terrorist groups like ISIS to freely use its platform. According to the Department of Justice, Binance processed transactions for mixing services used to launder money and facilitated over 1.5 million trades in violation of U.S. sanctions.

U.S. authorities were unequivocal in their criticism of Binance’s focus on profits over meeting regulatory requirements. This suggests that other exchanges that aggressively pursued growth while turning a “blind eye” to compliance may face similar crackdowns in the future. The $3.4 billion civil penalty imposed on Binance also sets a benchmark for potential fines other non-compliant entities may confront.

The charges against the world’s largest crypto exchange and its high-profile leader represent federal authorities’ most aggressive action yet to rein in lawlessness in the cryptocurrency industry. Officials made clear they will continue targeting crypto companies that break laws around money laundering, sanctions evasion, and other illicit finance.

More broadly, CZ’s guilty plea underscores the pressing need for sensible guardrails if crypto is to shed its reputation as primarily facilitating illegal activity. Though blockchain technology offers many potential benefits, its pseudonymous nature makes it vulnerable to abuse by criminals and terrorists financing unless exchanges rigorously verify customer identities and the source of funds.

For the wider crypto sector, the Binance takedown may spur valuable change. Many experts argue overly lax regulation allowed crypto exchanges to ignore Anti-Money Laundering rules other financial institutions must follow. The billion-dollar penalties against Binance could convince the industry it’s cheaper to self-regulate.

The Binance case may accelerate calls for a regulatory framework tailored to the unique risks posed by cryptocurrencies. Rather than stifle innovation in this nascent industry, thoughtful policies around KYC, anti-money laundering, investor protections and other issues could instill greater confidence in cryptocurrencies among mainstream investors and financial institutions.

Of course, because cryptocurrency transactions are pseudonymous, crypto will likely remain appealing for certain unlawful activities like narcotics sales and ransomware. But with Binance’s guilty plea, regulators sent the message that flagrant non-compliance will not fly. Exchanges allowing outright criminal abuse may face existential legal threats.

For exchanges determined to operate legally, the Binance debacle highlights the existential risks of non-compliance. No matter how large or influential, exchanges that refuse to meet their regulatory responsibilities risk jeopardizing their futures. Expect most exchanges to immediately review their KYC and AML policies in the wake of the Binance penalties.

At minimum, the charges will likely damage Binance’s reputation. Although the company remains operational, it could lose market share to competitors perceived as more law-abiding. For crypto investors, the uncertainty and loss of trust surrounding such a dominant player create fresh volatility in already turbulent markets.

Perhaps most profoundly, seeing handcuffs slapped on crypto’s one-time “king” punctures the industry’s former aura of impunity. After the Binance takedown, ongoing federal probes into FTX and other exchanges, and Sam Bankman-Fried’s criminal conviction, crypto fraudsters might finally fear the consequences many avoided for so long. For better or worse, crypto is evolving.

Sam Bankman-Fried Found Guilty on All Counts in FTX Fraud Trial

Posted on by slightbourne@noblecapitalmarkets.com

Sam Bankman-Fried, the disgraced founder and former CEO of the failed cryptocurrency exchange FTX, has been found guilty on all charges related to fraud and money laundering. The verdict was handed down on Thursday by a jury in a Manhattan federal court following over a month of dramatic testimony in one of the most high-profile white collar criminal trials in recent history.

Bankman-Fried faced seven criminal counts tied to allegations he defrauded FTX customers and investors out of billions of dollars. The jury deliberated for approximately four hours before returning guilty verdicts on all counts, affirming the prosecution’s allegations that the 30-year-old knowingly misled investors and misappropriated customer deposits to cover losses at his hedge fund, Alameda Research.

Each fraud count carries a maximum sentence of 20 years in prison, while the money laundering conviction includes up to another 20 years. This brings the total maximum sentence to 115 years behind bars for Bankman-Fried. His sentencing hearing is scheduled for March 2024, where the exact prison term will be determined by Judge Lewis Kaplan.

Rapid Downfall of a Crypto Pioneer

The verdict represents a dramatic demise for Bankman-Fried, who was once hailed as a pioneer within the crypto industry. The MIT graduate founded FTX in 2019, and it grew rapidly to become one of the largest global cryptocurrency exchanges with a valuation of over $30 billion at its peak.

But FTX collapsed almost overnight last November after a report revealed a leaked balance sheet showing Alameda Research owed billions of dollars in loans to FTX. The news triggered a liquidity crisis and customer withdrawals that quickly bankrupted both companies.

Prosecutors presented evidence over the course of the trial that Bankman-Fried had secretly transferred customer funds from FTX to cover losses at Alameda as the hedge fund made a series of failed investments. In total, an estimated $8 billion in customer money vanished.

When asked on the witness stand whether he stole funds, Bankman-Fried testified “I never intended to commit fraud.” But the 12-person jury ultimately sided with the prosecution in deeming his actions fraudulent.

Watershed Moment for Crypto Accountability

The guilty verdict represents a major victory for authorities seeking greater accountability within the largely unregulated crypto industry. Bankman-Fried’s conviction on all criminal charges related to the FTX collapse will likely spur further calls for regulation to protect investors participating in digital asset markets.

Many Industry observers believe the prosecution and ultimate guilty verdict for Bankman-Fried will serve as a warning for other crypto executives. His undoing may deter similar misconduct, as leaders now know they can face severe criminal repercussions for defrauding customers.

While the FTX saga damaged trust in cryptocurrencies broadly, the decisive guilty verdict helps restore some faith that justice can be served. Investors who lost their savings when FTX failed may find some solace knowing its founder and chief architect will now likely serve substantial prison time.

For Bankman-Fried himself, the future now looks increasingly bleak. His sentencing in March 2024 will determine exactly how many years he’ll spend incarcerated for the crimes that led to FTX’s epic collapse and wiped out billions in customer funds. But the outcome is already clear – his fraud conviction ensures Bankman-Fried will go down in history as a disgraced figure instead of the visionary entrepreneur he once portrayed himself to be.