Hong Kong-based cryptocurrency exchange BitForex has ceased withdrawals for a minimum of three days without offering an explanation.
Prior to the suspension, approximately $56 million in cryptocurrency had been withdrawn from the exchange’s wallets.
According to an X post on February 23, on-chain investigator ZachXBT stated that three BitForex hot wallets experienced outflows of approximately $56.5 million in cryptocurrencies before the exchange halted transaction processing.
The exchange’s X account has not seen any updates since May 2023
BitForex users are encountering issues with their accounts, ranging from being unable to access them to finding that the dashboard displays no assets.
Numerous users have shared a pop-up screen indicating they are blocked from accessing the company’s website.
Attempts by Cointelegraph to access the BitForex website encountered the same issue. However, certain pages of the exchange’s website remain active.
For instance, an announcement dated January 31, disclosing the departure of BitForex CEO Jason Luo, was still accessible on the website at the time of writing.
READ MORE: Bitcoin Halving Threatens US Miner Profitability and Sparks Global Migration Talks
In September 2023, BitForex was among the foremost global cryptocurrency exchanges in terms of capitalization, with a daily trading volume of approximately $2.6 billion in cryptocurrency.
Currently, CoinMarketCap does not provide real-time data on BitForex.
In April 2023, Japan’s Financial Services Agency (FSA) accused BitForex of breaching the country’s fund settlement laws, alleging that the exchange conducted business in the country without proper registration.
GHowever, BitForex has not attracted significant attention from regulators or the media since then.
Last week, another Hong Kong-based exchange, Atom Asset Exchange (AAX), transferred around $55.6 million worth of Ether (ETH) from its wallets.
AAX ceased all operations on November 13, 2022, just two days after FTX filed for bankruptcy. Following its closure, AAX’s former CEO Thor Chan and board member Haoming Liang were arrested by Hong Kong police in 2022.
Nevertheless, the founder of AAX, whose identity remains undisclosed, is purportedly still evading authorities with 230 million Hong Kong dollars ($29.41 million) worth of users’ funds and private keys granting access to exchange wallets.
Bitcoin mining firm Riot Platforms has reported a 19% increase in its Bitcoin production for 2023, mining a total of 6,626 BTC.
The surge in production contributed to a rise in annual revenue, primarily attributed to the higher average price of Bitcoin throughout 2023 compared to the bear market witnessed in 2022.
According to a report published by Riot Platforms on February 22, the average cost for the firm to mine a single Bitcoin in 2023 decreased by approximately $3,686 compared to the previous year.
“Riot’s cost to mine Bitcoin for 2023, net of power credits allocated to self-mining, averaged $7,539 per Bitcoin versus $11,225 in 2022, a decrease of 33% year-over-year,” the report highlights.
Moreover, the average value of Bitcoin in 2023 exceeded that of 2022, leading to a revenue increase for the year, totalling $280.7 million, compared to $259.2 million in the previous year.
“The increase in Bitcoin Mining revenue was driven by slightly higher values of Bitcoin mined in 2023, which averaged $28,859 per Bitcoin as compared to an average price of $28,245 per Bitcoin in 2022.”
The crypto market faced a severe downturn in 2022, marked by the collapse of several crypto firms, including major exchange FTX.
Riot’s share price witnessed a significant surge of 47.47% over the past month.
READ MORE: Bitcoin Struggles Amidst Institutional Investment Slowdown
However, it experienced a decline of approximately 10.65% over the five-day trading period last week, with its current share price standing at $14.85.
In December 2023, Cointelegraph reported Riot’s acquisition of 66,560 mining rigs from manufacturer MicroBT, marking one of the largest expansions of hash rate in the firm’s history ahead of the Bitcoin halving scheduled for April.
Other Bitcoin mining firms also reported varying production results in 2023. Core Scientific produced 19,274 Bitcoin, while CleanSpark experienced a 60% surge compared to 2022, mining over 7,300 Bitcoin during the year.
Marathon Digital mined 12,852 Bitcoin in 2023, with a notable increase of 1,853 Bitcoin in December alone, representing a 56% surge from November and a remarkable 290% increase over December 2022.
In more recent developments, Riot, alongside the Texas Blockchain Council, filed a lawsuit against the United States Department of Energy, Energy Information Administration, and the Office of Management and Budget for demanding invasive data from crypto miners.
Potential inertia in the price of Bitcoin following the Bitcoin halving could destabilise the share prices of high-cost public miners in the United States, potentially compelling some to relocate overseas.
“We might see a mining stock bloodbath as investors realise these companies are barely making money,” says Jaran Mellerud, founder and chief mining strategist of Hashlabs Mining, alluding to the potential outcome if the Bitcoin price fails to experience a significant rise after the halving.
Mellerud is currently observing the three to four-month period post-halving to gauge the impact on miner profitability due to the reduction in block rewards.
The upcoming Bitcoin halving is anticipated to take place on April 24, according to CoinMarketCap.
It will decrease Bitcoin miner rewards from 6.25 BTC (£234,750) to 3.125 BTC (£117,375), although historical trends suggest a subsequent surge in the Bitcoin price.
During the last halving event on May 11, 2020, Bitcoin was valued at $8,750 and experienced a staggering 430% increase five months later in October, soaring from $11,500 to $61,300 by mid-March 2021.
However, if Bitcoin fails to rally significantly within that three to four-month timeframe, “a significant portion of the network might need to power down their machines, particularly those paying hosting rates of $0.07 per kWh or more,” Mellerud noted, highlighting a notable concentration of these inefficient miners in the United States.
Consequently, Mellerud anticipates a shift in some of Bitcoin’s hash rate from the U.S. to countries with lower electricity rates, particularly in Africa and Latin America.
“My company, Hashlabs, is currently witnessing substantial demand from US-based miners who wish to relocate their machines to Ethiopia, where hosting rates are 30-40% lower than in the United States.”
Concerns regarding profitability surfaced in late January when Cantor Fitzgerald reported that 11 publicly listed Bitcoin miners would not be profitable post-halving if Bitcoin’s price remained around $40,000 (the price of Bitcoin at the time).
Cantor Fitzgerald’s “all in per coin” metric encompasses the total costs a Bitcoin miner would incur in producing a single Bitcoin, encompassing electricity costs, hosting fees, and other expenses.
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Nonetheless, with Bitcoin’s price currently standing at $51,000, only four of the 13 mining firms fall below the profitability threshold.
However, head analyst at Bitcoin mining firm Blockware Solutions, Mitchell Askew, informed Cointelegraph that most U.S. public miners would maintain profitability, especially those that invested in more efficient machines during the bear market.
Askew refuted Mellerud’s claim that most inefficient miners are based in the U.S., asserting that they constitute only a small fraction of Bitcoin’s total hash rate, making any hash rate loss negligible.
Nevertheless, even in the event of unprofitability, Askew outlined several reasons preventing U.S. miners from relocating overseas.
“[Many of them] are bound by fixed hosting contracts and must continue mining regardless of profitability,” while others mine primarily to accumulate non-Know Your Customer Bitcoin and are less concerned with profitability, according to Askew.
Mellerud identified Ethiopia, Nigeria, and Kenya as the most promising African countries to attract a larger share of the hash rate in the event of a mining migration.
Mellerud particularly highlighted Ethiopia’s “massive hydropower surplus” and the influx of Chinese miners as factors contributing to its appeal, projecting the African nation to capture 5–10% of Bitcoin’s total hash rate over the next few years.
Meanwhile, Mellerud identified Argentina and Paraguay as the most promising mining destinations in South America.
The United States Securities and Exchange Commission (SEC) is soliciting feedback on a proposed rule alteration enabling the listing and trading of options for Bitcoin exchange-traded funds (ETFs).
As per a notice dated February 23, the NYSE has sought a rule adjustment to authorise the listing and trading of options on the Bitwise Bitcoin ETF (BITC), the Grayscale Bitcoin Trust (GBTC), and “any trust that holds Bitcoin.”
If sanctioned, the options will be traded “in the same manner as options on other ETFs (including commodities ETFs) on the Exchange,” states the notice.
This encompasses regulations such as listing criteria, expiry dates, strike prices, minimum price changes, position and exercise limits, margin requirements, and protocols for customer accounts and trading halts.
BlackRock is similarly pursuing endorsement for a comparable policy revision.
The asset manager has applied for rule amendments to list options on its Bitcoin ETF in conjunction with the Chicago Board Options Exchange (CBOE). Bloomberg ETF analyst James Seyffart foresees the SEC’s verdict arriving by September 2024 at the latest.
Options are utilised for portfolio hedging, income, or speculative purposes.
They are financial derivatives affording buyers the right, but not the obligation, to buy or sell a specified asset at a predetermined price on a specific date.
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In the realm of Bitcoin ETFs, options would enable investors to hedge or speculate on the price movements of a BTC ETF rather than Bitcoin itself.
The SEC has previously greenlit other commodity ETFs held by trusts, including the SPDR Gold Trust, iShares COMEX Gold Trust, iShares Silver Trust, and ETFS Gold Trust.
Grayscale CEO Michael Sonnenshein has been publicly advocating for regulators to endorse the crypto derivatives products.
According to the executive, options are advantageous for investors as they bolster “price discovery and can help investors better navigate market conditions or achieve desired outcomes, such as generating income.”
Similar to other investments and financial products, options trading carries risks that may not be suitable for all investors.
The SEC authorised the trading of spot Bitcoin ETFs on Wall Street on January 10, following years of rejections.
Former United States President Donald Trump has shifted his stance on Bitcoin. Once critical of the cryptocurrency, branding it a scam during his presidency, Trump now concedes that BTC is gaining traction and acceptance.
In a recent interview on Fox News, Trump was questioned about his perspective on the ascent of the Chinese digital currency and whether countering it necessitates embracing a decentralized currency like Bitcoin.
Trump reiterated his preference for the US dollar but acknowledged Bitcoin’s increasing popularity, stating:
“I like the dollar, but many people are doing it [using Bitcoin], and frankly, it’s taken a life of its own.
You probably have to do some regulation, as you know, but many people are embracing it.
And more and more, I’m seeing people wanting to pay Bitcoin, and you’re seeing something that’s interesting. So I can live with it one way or the other.”
This marked a departure from Trump’s previous disdain for Bitcoin during his presidency, where he had labelled it a scam and reportedly directed the treasury secretary to take action against it.
Amidst his campaign for the 2024 U.S. presidential election, speculation arises within the crypto community regarding the motive behind Trump’s newfound openness to Bitcoin.
Some view it as a strategic move to court votes from the expanding crypto sector, while others perceive it as typical of Trump’s ambivalent approach to issues.
One user, Blairja, suggests that Trump strategically alternated between pro-BTC and pro-US dollar statements to gauge public opinion, likening it to a fishing expedition to ascertain the prevailing sentiment among voters.
Indeed, politicians have increasingly leveraged cryptocurrency to appeal to tech-savvy demographics.
Trump currently leads the race for the Republican Party’s presidential nomination, with fellow Republican Nikki Haley trailing behind him.
Bitcoin witnessed continued weakness on as consolidation coincided with a brief slowdown in institutional investment.
According to data from Cointelegraph Markets Pro and TradingView, BTC struggled to maintain its price around $51,000.
Bulls found themselves confined within a narrow trading range for over a week, with concerns arising over the inflows to spot Bitcoin exchange-traded funds (ETFs).
Recent days saw a significant deceleration in these inflows, with February 21st even experiencing a net outflow of approximately $36 million, as per data shared on X (formerly Twitter) by sources including BitMEX Research.
February 22nd showed heightened activity, with net inflows surpassing a quarter of a million dollars, even after factoring in outflows from the Grayscale Bitcoin Trust (GBTC).
“Normality resumed with a $251M inflow into the Bitcoin ETFs,” responded James Van Straten, research and data analyst at crypto insights firm CryptoSlate.
Addressing the pace of buying from ETF operators, Thomas Fahrer, CEO of crypto-focused reviews portal Apollo, predicted that BlackRock’s iShares Bitcoin ETF (IBIT), the largest among them, would alter BTC supply dynamics in the future.
“98% of all the #Bitcoin in existence already costs >100K if you tried to buy it,” he argued alongside a chart of IBIT holdings.
“Remember that the current price is just the marginal trade. Blackrock is going to test this theory, so we’ll find out soon enough.”
As of February 23rd, IBIT held 124,535 BTC ($6.35 billion), according to data from Apollo’s own ETF tracker.
Turning to low-timeframe BTC price analysis, popular trader Skew encapsulated the sentiment among seasoned market observers.
He concluded that the uptrend remained intact, but significant support levels were now back in focus.
These included the 88-period and 100-period exponential moving averages (EMAs) on the four-hour chart at $50,017 and $49,654 respectively, along with the 18-period EMA on the daily chart at $49,645.
“Currently, price trades around range low & 4H 55EMA which typically is a near term trend inflection point, meaning momentum picks up soon,” part of his latest X analysis read.
Michael Saylor has affirmed his steadfast commitment to holding onto Bitcoin, despite his company MicroStrategy’s holdings swelling to an unrealised profit of almost $4 billion.
“I’m going to be buying the top forever. Bitcoin is the exit strategy,” Saylor declared in an interview with Bloomberg on Feb. 20, when queried about the possibility of his firm selling its stash of 190,000 BTC — presently valued at approximately $9.88 billion.
Presenting his bullish argument for Bitcoin, Saylor asserted that the cryptocurrency is “technically superior” to gold, the S&P 500, and real estate, notwithstanding the significantly larger market capitalisations of these asset classes compared to Bitcoin’s $1 trillion.
“We believe capital is going to keep flowing from those asset classes into Bitcoin,” he remarked. “Bitcoin is technically superior to those asset classes.
And that being the case, there’s just no reason to sell the winner to buy the losers.”
MicroStrategy, a business intelligence software firm, made headlines as the first publicly traded company to begin accumulating Bitcoin in 2020.
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The 190,000 BTC it held as of the fourth quarter of 2023 were acquired at an average price of $31,224 each, resulting in a total investment cost of $5.93 billion.
Data from HODL15Capital indicates that United States-based spot Bitcoin exchange-traded funds (ETFs), excluding the Grayscale Bitcoin Trust (GBTC), collectively hold an estimated 270,000 BTC as of Friday, Feb. 16.
Saylor highlighted the demand for Bitcoin, driven by an increasing appetite for ETF products, which has exceeded the supply from miners, sometimes by “10 times as much.”
Nevertheless, he dismissed concerns that ETFs might impede MicroStrategy’s ability to acquire Bitcoin, stating that the company employs a “levered operating strategy” for investing in the digital asset.
“The spot ETFs have opened up a gateway for institutional capital to flow into the Bitcoin ecosystem,” Saylor explained.
“They’re facilitating the digital transformation of capital, and every day, hundreds of millions of dollars of capital is flowing from the traditional analog ecosystem into the digital economy.”
“This is a rising tide. It’s going to lift all boats,” he concluded.
Bitcoin is poised for a downturn around its upcoming block subsidy halving, though the exact timing remains uncertain.
Renowned trader and analyst Rekt Capital, in his latest YouTube presentation on February 20, forecasted BTC’s price trajectory mirroring the bullish trends of 2016 and 2020.
The deliberation revolves around the timing of the 2024 “pre-halving retrace” for Bitcoin, which has lingered within a narrow band for over a week, encountering resistance around $52,000.
Despite dampened sentiment and subdued performance of alternative cryptocurrencies, seasoned market observers maintain a positive outlook.
Drawing from historical patterns leading to all-time highs, Rekt Capital identified common phases in bull market formations.
He elucidated, “In the past, a macro downtrend break always precedes upside going into the halving. Then we have a pre-halving retrace and then a post-halving reaccumulation period and then parabolic price action toward new all-time highs.”
A chart accompanying the analysis depicted BTC/USD breaking its initial downward trendline, only to encounter resistance from a previously established zone.
The absence of breaking through and subsequently retesting this zone as support — the “pre-halving retrace” phase — characterises the current state of affairs in 2024.
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Rekt Capital asserted, “We’re going to have the same thing in this cycle as well.” The focal point for the anticipated pre-halving pullback resides around $45,000, as corroborated by data from Cointelegraph Markets Pro and TradingView.
The query persists, “Are we going to retest this resistance this month in the pre-halving period?” as the analyst highlighted the recurrent failure to do so in preceding pre-halving periods.
Earlier assessments by Rekt Capital indicated Bitcoin’s complete immersion in its pre-halving surge, with recent observations suggesting accelerated key price developments compared to previous cycles.
Turning to current market dynamics, others expressed reluctance to adopt a bearish stance amidst the ongoing lateral movements.
Caleb Franzen, founder of research platform Cubic Analytics, remarked on Bitcoin’s steadfast trading range, observing minimal deviation over the past week.
Similarly, analyst Matthew Hyland underscored the significance of the 0.618 Fibonacci retracement level from all-time highs, cautioning that a breach below $49,000 could alter the outlook, while consolidation within an upward trajectory favours its continuity.
Bitcoin (BTC) soared to a fresh 2024 peak of £53,019 on February 20, only to sharply decline to £50,000 on select exchanges.
Traders attribute consistent inflows of spot BTC ETFs and the forthcoming supply halving event as pivotal drivers behind this surge, with BTC currently trading above £52,100 at the time of writing.
Let’s delve into the primary factors underpinning today’s volatility in the Bitcoin price.
Bitcoin futures’ open interest (OI) has surged to a new yearly pinnacle, reminiscent of levels last witnessed in November 2021.
This surge suggests heightened trading activity surrounding the foremost cryptocurrency by market capitalisation.
Data from cryptocurrency futures trading and information platform Coinglass reveals that total OI for BTC futures reached £22.69 billion on February 20, the highest since November 11, 2021, closely approaching the peak of £23 billion recorded at that time.
Bitcoin futures OI surged by over 30% in 2023, correlating with Bitcoin’s 23% year-to-date surge to £53,000, reaching levels last observed in December 2021.
Open interest serves as a gauge of the overall value of all unsettled Bitcoin futures contracts across exchanges, with an uptick indicating increased market activity and trader sentiment surrounding the pioneering cryptocurrency.
Investor sentiment remains buoyant, buoyed by rising inflows to spot BTC ETFs despite outflows from gold ETFs on the rise.
Bitcoin has surpassed the £49,000 peak reached subsequent to the January 10 approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission.
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Data from Farside Investors reveals that £4.91 billion has flooded into Bitcoin ETFs within six weeks since trading commenced on January 11.
The total weekly inflows into the newly issued spot Bitcoin ETFs reached £2.5 billion last week, as per CoinShares Digital Asset Fund Flows Weekly Report.
CoinShares analyst James Butterfill remarked, “These inflows, alongside recent positive price movements, have propelled total assets under management (AuM) to £67 billion, marking the highest level since December 2021.”
On February 17, financial commentator Tedtalks Macro underscored the steady rise in net inflow to spot Bitcoin ETFs, averaging £182 million per day, asserting,
“Post-halving we only need ~£25M of net inflows to spot ETFs per day, to offset the miner production.”
The impending Bitcoin halving, anticipated to slash miners’ rewards by 50%, is also projected to significantly stoke investors’ interest in BTC.
Historically, the halving event has preceded Bitcoin embarking on a parabolic uptrend in the months post-event.
Bitcoin holdings on the Coinbase crypto exchange have dwindled to their lowest point in nine years as users relocate a substantial portion of their holdings away from the exchange.
According to a report from CryptoQuant, whales shifted 18,000 Bitcoin, valued at nearly $1 billion, away from Coinbase over the weekend, with transfer amounts ranging from $45 million to $171 million.
The public order book of Coinbase presently contains approximately 394,000 BTC, estimated to be valued at $20.5 billion.
The movement of BTC holdings away from centralised exchanges by whales is viewed as a positive indicator as it reduces the availability of Bitcoin for sale.
Nonetheless, opinions on social media regarding the nature of these transfers are mixed.
Some speculate that the funds are being transferred to custodial wallets in anticipation of a price surge, particularly with the forthcoming Bitcoin halving just two months away, causing a supply shock.
Conversely, some believe that the transferred funds might be utilised for liquidity in over-the-counter (OTC) trades.
Others suggest that the funds might be transferred to a different custodian and that these are not individual withdrawals, remarking that the majority of assets held on these exchanges do not actually belong to them, thus the actual withdrawal figure should be much lower.
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With each Bitcoin halving cycle, the influx of new BTC into the market is halved, leading to a supply squeeze as demand rises.
The next Bitcoin halving is scheduled for April at a block height of 740,000, reducing the block reward from 6.25 BTC to 3.125 BTC per mined block.
This halving coincides with significant institutional demand, evidenced by the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in the United States in January.
Presently, approximately 900 BTC are mined daily, while the daily net inflows of Bitcoin ETFs amount to around half a billion dollars, equivalent to about 9,650 BTC, notwithstanding Grayscale registering nearly $100 million in daily outflows.
Following the April halving, the daily production of BTC will decrease to about 450 BTC, while institutional demand is expected to persist.
This significant disparity between supply and demand historically favours a bullish trajectory for the Bitcoin price, often resulting in new all-time highs within a year of the halving.
Bitcoin is currently trading at around $52,000, marking its highest level since December 2021, albeit a 25% decrease from its peak of approximately $69,000.