Indonesian authorities have recently taken action against ten Bitcoin mining operations, accusing them of electricity theft amounting to nearly $1 million USD.
The North Sumatra Police Force initiated the crackdown, targeting a multi-site Bitcoin mining operation across various locations in Indonesia.
During the operation, they confiscated 1,134 Bitcoin mining machines, 11 meters of electrical cable, and assorted computer equipment.
The Chief of North Sumatra Police, Irjen Agung Setya Imam Effendi, asserted that the organizers of these mining operations had manipulated electrical circuits to power the extensive number of Bitcoin mining machines.
Effendi demonstrated the tampering, explaining that the electricity was being diverted from the upper part of the PLN box, bypassing the meter, which was improper and illegal.
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The total loss resulting from these ten cases of electricity theft was estimated to be 14.4 billion Indonesian Rupiahs (IDR), equivalent to approximately $935,666 USD.
This incident follows a high-profile case in China where a government official received a life sentence for facilitating access to electricity for Bitcoin miners.
Yi Xiao, a former vice chairman of the Jiangxi Provincial Political Consultative Conference Party Group, was convicted of abusing power in a Bitcoin mining enterprise.
Xiao had reportedly operated a massive $329 million Bitcoin mining venture under the corporate name Jiumu Group Genesis Technology from 2017 to 2021.
During this period, Xiao, along with other corporate executives, amassed a staggering 160,000 Bitcoin mining machines, which at one point accounted for 10% of the entire electricity consumption of the city of Fuzhou.
His sentence underscores the seriousness with which authorities are addressing illegal Bitcoin mining activities, particularly those involving electricity theft, as these operations can impose significant financial burdens on both governments and utility providers.
On December 29, the contenders in the race for a Bitcoin exchange-traded fund (ETF) spot waited until the eleventh hour to submit their final S-1 form applications.
Throughout the day, these applications trickled into the United States Securities and Exchange Commission (SEC), following earlier submissions by BlackRock, Van Eck, and Valkyrie.
Notable names in the crypto industry, including Invesco Galaxy, Bitwise, WisdomTree, and Fidelity, joined the fray.
In the latest filings, Fidelity, WisdomTree, and Invesco Galaxy revealed their authorized participants. Invesco Galaxy chose Virtu and JPMorgan, while WisdomTree and Fidelity opted for Jane Street Capital.
Interestingly, WisdomTree decided to stick with in-kind share creation and redemption, despite the SEC’s encouragement to switch to cash-based mechanisms.
Furthermore, it seems a price war has ignited among competitors. Invesco Galaxy, for instance, announced a waiver of fees for the first six months and the first $5 billion in assets.
Fidelity, on the other hand, set its fee at 0.39%.
Bitwise, though yet to disclose its authorized participants, mentioned in its S-1 filing that an undisclosed entity expressed interest in purchasing up to $200 million worth of the ETF shares.
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It’s worth noting that several major players in the industry have thrown their hats into the ring.
BlackRock, Van Eck, Grayscale, Bitwise, WisdomTree, Invesco Galaxy, Fidelity, ARK Invest, Valkyrie, Franklin, Hashdex, Global X ETFs, and Pando Asset have all submitted S-1 applications for spot Bitcoin ETFs.
The SEC had set December 29 as the deadline for amendments to spot BTC ETF S-1 filings.
Grayscale made a last-minute submission on December 27 with a new S-3 filing, following the resignation of Barry Silbert from the board of directors.
In this filing, Grayscale announced its intention to convert its Grayscale Bitcoin Trust into a cash-only spot ETF, mirroring similar moves by Van Eck and BlackRock in earlier revisions.
Barry Silbert and his company, the Digital Currency Group, are currently under investigation by the SEC, adding another layer of complexity to the evolving landscape of Bitcoin ETF applications.
JPMorgan CEO Jamie Dimon has found himself under scrutiny from the crypto community following his appointment as an authorized participant (AP) by BlackRock, a move revealed in BlackRock’s updated Form S-1 filing released on December 29.
In the world of exchange-traded funds (ETFs), an authorized participant is an organization granted the privilege to create and redeem shares of the ETF.
BlackRock, in its filing, formally designated Jane Street and JPMorgan Securities as “authorized participants” in its proposed spot Bitcoin ETF application.
Interestingly, this development comes despite Dimon’s public stance against Bitcoin.
Dimon had made his stance clear during a December 6 hearing of the United States Senate Banking Committee.
At that time, he asserted that if he held governmental authority, he would make efforts to shut down cryptocurrencies.
Dimon argued that Bitcoin and other cryptocurrencies primarily serve as tools to facilitate criminal activities. This statement drew sharp criticism from the crypto community.
Critics were quick to point out the apparent hypocrisy of JPMorgan’s involvement as an authorized participant in BlackRock’s Bitcoin ETF.
Silver Zimmermann, a crypto enthusiast, sarcastically suggested, “Perhaps money laundering, tax evasion, criminal participation, and drug trafficking are their business as well.”
Others, like user Sunny Po, questioned JPMorgan’s contradictory positions, asking, “How can JP Morgan do all that after telling Congress and Elizabeth Warren that this is what it’s used for?”
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Notably, John Deaton, a pro-XRP lawyer, expressed skepticism regarding Senator Elizabeth Warren’s stance on Bitcoin and raised concerns about JPMorgan’s willingness to associate with Bitcoin despite its negative characterization as a tool for criminals.
Deaton questioned whether this was an attempt to mislead the public or engage in gaslighting.
Despite Dimon’s publicly stated opposition to the digital asset sector, JPMorgan made surprising moves in the crypto space.
The bank recently introduced JPM Coin, its own cryptocurrency token, operating on a private version of the Ethereum blockchain, catering to its institutional clients.
Furthermore, JPMorgan launched a blockchain-based tokenization platform in October, with BlackRock counted among its clients.
The bank also participated in a $65 million funding round for Ethereum infrastructure firm Consensys in April 2021.
In summary, JPMorgan’s involvement as an authorized participant in BlackRock’s Bitcoin ETF has ignited controversy within the crypto community, given Jamie Dimon’s previous negative statements about cryptocurrency.
This development has raised questions about the bank’s stance on Bitcoin and its motivations for engaging in the crypto space.
ARK Invest has taken the lead by filing its final Form S-1 amendment for its proposed Bitcoin exchange-traded fund (ETF), putting itself in contention for early approval.
The United States Securities and Exchange Commission (SEC) recently set a crucial deadline for ETF applicants to submit their final S-1 amendments by December 29, 2023, with the expectation of making initial decisions in January 2024.
During a meeting held on December 21, SEC officials met with representatives from seven firms, emphasizing the significance of meeting the deadline.
It was made clear that failure to do so would exclude applicants from the initial round of potential spot Bitcoin ETF approvals early next year.
On December 28, ARK Invest made a pivotal move by filing an amendment to the S-1 registration statement for its Ark 21Shares Bitcoin ETF.
Bloomberg ETF analyst Eric Balchunas highlighted that the amendment focused on authorized participants.
This came after ARK had already revised its application on December 19 to adjust cash creations and redemptions for shares in its fund, aligning with industry trends.
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Interestingly, other ETF issuers have been relatively quiet in terms of amended Bitcoin ETF filings, which has raised speculation.
Balchunas suggested that some firms might be waiting until the last minute to avoid revealing their amendments to competitors.
With more than a dozen companies vying for approval of a spot Bitcoin ETF, it is anticipated that additional amended S-1 filings will be submitted within the next 24 hours.
Nate Geraci, president of ETF Store, commented on the growing activity in anticipation of spot Bitcoin ETFs launching in January.
He noted the positive aspect of this saga, which is that it is compelling traditional finance (TradFi) investors to delve into the world of cryptocurrency and prompting crypto investors to familiarize themselves with ETFs.
This convergence, he dubbed “The Bridge,” underlines that crypto is here to stay, with the potential to reshape the financial landscape.
ARK Invest, led by Cathie Wood, a prominent institutional asset management firm, has made a significant move in its investment portfolio by liquidating its entire remaining holdings of the Grayscale Bitcoin Trust (GBTC), valued at $200 million.
Bloomberg ETF analyst Eric Balchunas brought this development to light.
From the proceeds of the GBTC sale, ARK Invest allocated approximately $100 million towards an investment in the Bitcoin Futures ETF called Bito.
Nonetheless, industry experts view this move as a temporary measure, with ARK Invest likely seeking a more liquid and diversified investment portfolio.
Consequently, ARK Invest has now become the second-largest holder of Bito, according to Eric Balchunas.
The process of divesting from GBTC began in October, coinciding with Bitcoin’s price reaching $34,000.
At that time, ARK Invest initiated the sale of 100,739 GBTC shares, valued at $2.5 million, from its ARK Next Generation Internet ETF (ARKW). Later, on December 19, the firm sold an additional 809,441 GBTC shares worth $27.9 million.
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In addition to shedding GBTC, ARK Invest also offloaded 148,885 shares of Coinbase, a popular cryptocurrency exchange, amounting to $27.5 million, from its ARK Next Generation Internet ETF.
These actions by ARK Invest are significant, given the ongoing anticipation surrounding the approval of a spot Bitcoin ETF.
Notably, ETF analysts, including Eric Balchunas, have expressed a 99% probability of a spot Bitcoin ETF receiving approval before the deadline of January 10, 2024.
Cathie Wood, the CEO of ARK Invest and a notable advocate for Bitcoin, has been vocal about the likelihood of a spot Bitcoin ETF gaining approval.
During a recent interview, Wood acknowledged that the heightened expectations regarding the approval of spot Bitcoin ETFs could have a short-term impact on Bitcoin’s price.
However, she emphasized the promising long-term outlook for the cryptocurrency market.
Wood’s comments reflect the dynamic nature of the crypto industry and the significant role institutional players like ARK Invest play in shaping its future.
In the lead-up to the anticipated approval of a spot Bitcoin exchange-traded fund (ETF) in early January, the trading volumes of Bitcoin mining company Marathon Digital have surged, propelling it to the top of the charts among U.S. mid and large-cap stocks.
Over the past 24 hours, the publicly traded firm has witnessed an astonishing trading volume of over 105 million shares, surpassing giants like Tesla, Apple, and Amazon, as reported by Yahoo Finance market data.
Additionally, fellow Bitcoin miner Riot Platforms has emerged as the sixth most-traded stock on the charts, with more than 40 million shares exchanged in the last day.
This increase in trading activity on Bitcoin mining stocks coincides with a renewed push by mining companies to expand their operations, with an eye on the expected approval of the spot Bitcoin ETF in January and the Bitcoin halving scheduled for April.
Marathon Digital made headlines on December 19th when it unveiled plans to acquire two mining centers for a staggering $179 million.
This strategic move will augment its current mining capacity by 390 megawatts, supplementing its existing output of 584 megawatts.
Meanwhile, Riot Platforms had made an equally significant investment two weeks prior, acquiring an additional $291 million worth of Bitcoin mining rigs, resulting in its largest-ever increase in hash rate.
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Despite Bitcoin’s impressive growth of more than 163% since the beginning of the year, the shares of Bitcoin mining companies have significantly outperformed the leading cryptocurrency.
Marathon Digital and Riot Platforms have witnessed astounding year-to-date gains of 767% and 452%, respectively, according to data from TradingView.
Notably, the largest publicly traded cryptocurrency exchange, Coinbase, has also experienced substantial gains, soaring by over 450% since the year began.
The year started with crypto-related stocks being popular targets for short trading, likely influenced by the memories of the FTX collapse and other high-profile meltdowns in 2022.
However, those who bet against the crypto sector may have underestimated its resilience, as more than $6 billion worth of crypto-related shorts have been liquidated so far this year.
The surging interest in Bitcoin mining stocks and the broader crypto market indicates a shifting sentiment, with investors increasingly bullish on the future of digital assets and the potential approval of a Bitcoin ETF in the near future.
Longtime market participant Matthew Hyland is confident that Bitcoin is poised for a bullish rally, and he outlined his predictions in a recent post on X (formerly Twitter).
Despite Bitcoin’s dip to $41,650 over the Christmas period, Hyland believes that the cryptocurrency is gearing up for significant price gains.
Hyland points to two key indicators, the Bollinger Bands and the Relative Strength Index (RSI), as signals for a short-term reversal in Bitcoin’s price.
He notes that the Daily Bollinger Bands are tightening, similar to the conditions that triggered previous price surges above $30,000 and $40,000.
Additionally, the Daily RSI is currently at a two-month low, and the 3-Day Moving Average Convergence Divergence (MACD) is on the verge of a crossover.
Bollinger Bands are a widely used volatility indicator that track Bitcoin’s price action and signal potential breakouts in volatility.
The narrowing of the daily-timeframe bands indicates that a new round of volatility may be on the horizon. This pattern has previously been observed in the lead-up to Bitcoin’s recovery above $30,000.
READ MORE: Grayscale’s Strategic Shift and CEO Resignation Spark Speculation Over Bitcoin ETF Approval
The RSI, a momentum oscillator, provides insight into whether BTC/USD is overbought or oversold at a given price.
With an RSI reading of 53, Bitcoin is well below the overbought threshold of 70 and even further from its recent peak of 76 in December. This suggests room for further upside potential.
Longer timeframes also support the bullish outlook, as veteran trader Peter Brandt noted last week.
Hyland adds that the Daily RSI is currently at its lowest levels in over two months, a period when Bitcoin was trading below $27,000.
However, one potential obstacle to Bitcoin’s bullish trend is the Moving Average Convergence Divergence (MACD) on three-day timeframes, which is showing signs of a bearish trend flip.
Hyland acknowledges this, but he highlights that there are several days left for the MACD signal to potentially negate itself based on price action.
He also points out that the MACD has been accurate in predicting both lower and higher prices throughout the year.
In conclusion, Matthew Hyland’s analysis suggests that Bitcoin is on the verge of a significant bullish move, with multiple indicators aligning in favor of a price surge.
While the MACD presents a potential bearish concern, it remains to be seen how Bitcoin’s price action will unfold in the coming days.
Blockchain security experts predict that in 2024, crypto projects and investors will face a range of significant threats, including AI-powered phishing scams, BRC-20 exploits, and new vulnerabilities in smart contracts.
Despite a decrease in scam and hack-related losses from $4 billion in 2022 to $1.7 billion in 2023, Jesse Leclere, a blockchain analyst at CertiK, warns that scams are becoming more sophisticated.
Users are urged to stay vigilant against well-executed exploits.
Leclere emphasizes that phishing attacks, evolving in sophistication, will target not only individual users but also corporate systems, using tailored social engineering tactics for the crypto context.
The December 14 Ledger Connect exploit serves as a prime example of an advanced attack.
Generative AI is expected to play a crucial role in making phishing scams more nefarious, allowing hackers to automate operations and create convincing fake calls, videos, and messages to deceive potential victims.
Jenny Peng, a research analyst from 0xScope, also warns that AI could contribute to generating realistic “deep fakes” to trick crypto users.
Peng predicts that hackers will pay extra attention to the burgeoning BRC-20 ecosystem in 2024 due to a relative lack of security developments.
She points out the double-spend exploit that hit the BRC-20 UniSat wallet in early 2023 as evidence that the ecosystem needs to quickly improve its security infrastructure.
READ MORE: Spot Bitcoin ETF Approval Expected to Transform Crypto ETF Market
Cross-chain bridges, a persistent concern for the industry, will continue to be problematic in 2024.
As the industry adopts cross-chain solutions for greater interoperability, these protocols become attractive targets for attackers.
Complex interactions between different protocols and chains can lead to vulnerabilities.
Notably, some of the largest crypto hacks have resulted from bridge exploits, including the infamous $650 million Ronin bridge hack.
Phil Larratt, director of investigations at Chainalysis, warns that bad actors will become more adept at avoiding detection in 2024. Illicit actors are expected to adopt more sophisticated tactics and techniques, especially as traditional organized criminals and financial crime actors increasingly embrace crypto.
To combat this trend, Larratt suggests the need for more intensive law enforcement investigations, increased training and knowledge sharing among law enforcement organizations, advanced fraud protection programs, and continued public-private sector partnerships.
As crypto evolves, so too must the strategies to counter emerging threats.
On December 26th, Bitcoin experienced a fresh decline in its price, with analysts attributing this weakness to seasonal trends.
Data from Cointelegraph Markets Pro and TradingView revealed that BTC/USD dropped to $42,200, marking a 2% decrease for the day and its lowest point in nearly a week.
Despite the holiday season, Bitcoin bulls did not witness a “Santa rally” or any positive surprises.
Trading resource Material Indicators commented on the recent Bitcoin price movements, stating that the final days of 2023 were expected to pose challenges for the cryptocurrency.
They noted that year-end profit-taking and tax loss harvesting would create headwinds for BTC bulls.
Material Indicators also highlighted the importance of Bitcoin’s 21-day simple moving average (MA), which stood at $43,115 at the time, slightly higher than the spot price. Co-founder Keith Alan emphasized the 21-day MA as a crucial support level in recent months.
Looking at the BTC/USDT order book liquidity on Binance, the largest global exchange, the mood remained pessimistic.
The order book showed bids as low as $37,000, and these lower bids had been increasing throughout the second half of December.
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Popular trader Skew suggested that market participants were gearing up for further downside, with short positions positioning themselves for a potential break lower.
These short positions would be eager to see continued spot selling, or they might be forced to cover around the $43,000 mark.
While Bitcoin and Ethereum struggled, other major cryptocurrencies fared better as the year drew to a close.
Binance’s BNB and Solana’s SOL continued to demonstrate impressive weekly performances, with gains of 19.5% and 56.8%, respectively, over the past seven days. In contrast, ETH/USD only showed a 1.6% increase.
Solana, in particular, benefited from increased gas fees and airdrops, reaching nearly $126 on Christmas Day, its highest level since April 2022.
Some traders had been anticipating a shift in momentum from Bitcoin to altcoins, and Michaël van de Poppe, founder and CEO of trading firm MN Trading, noted a significant trend change in the overall altcoin market cap.
He suggested that the altcoin market capitalization was breaking out of a range that had persisted for over 500 days and predicted a potential 2x increase in Q1.
Grayscale, a prominent crypto asset manager, recently made an important regulatory move by submitting an amended S-3 filing to the United States Securities and Exchange Commission (SEC).
This development coincided with the announcement of Barry Silbert’s resignation as the CEO of its parent company, Digital Currency Group (DCG), from Grayscale’s board of directors.
The timing of Silbert’s departure has raised speculation within the crypto market regarding its potential impact on Grayscale’s efforts to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin Exchange-Traded Fund (ETF), a decision currently pending with the SEC.
Ramah Luwalia, CEO of Lumida Wealth, suggests that Silbert’s resignation may have been a strategic move to enhance the likelihood of the ETF’s approval.
This theory is partly rooted in the SEC’s ongoing investigation into Silbert and DCG.
Additionally, Adam Cochran, a partner at crypto venture capital firm Cinneamhain Ventures, posits that Silbert’s departure was likely a prearranged agreement between Grayscale and the SEC in anticipation of the conversion request gaining approval.
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The official announcement of Silbert’s resignation was made in an 8-K filing to the SEC on December 26. Grayscale also revealed that Mark Shifke, DCG’s chief financial officer, would succeed Silbert as chairman of the board at Grayscale.
Aside from Silbert’s departure, the most noteworthy aspect of the amended S-3 filing was Grayscale’s shift toward a cash creation model, marking a departure from its previous in-kind model.
This change is significant as it addresses an ongoing point of contention between asset managers seeking to launch a spot Bitcoin ETF and the SEC.
In an in-kind model, fund market participants can directly handle the assets within the fund, while a cash-creation model allows new shares in a spot Bitcoin ETF to be created or redeemed exclusively through cash transactions.
The SEC’s move to restrict broker-dealers from directly dealing with Bitcoin aims to enhance monitoring and reduce potential risks related to anti-money laundering and Know Your Customer compliance.
Scott Johnsson, general partner at VB Capital, expressed concern that the cash creation model could introduce greater risks for investors seeking exposure to Bitcoin through a spot ETF.
This novel approach contrasts with other spot commodity ETFs that operate on an in-kind basis, raising questions about its viability in the regulatory landscape.
While Grayscale’s strategic moves are generating intrigue, the crypto community will closely monitor the SEC’s response and the potential implications for the broader market.