The recent surge in Bitcoin prices has sparked a mix of excitement and doubt, with prices rising 40% in the past month. Despite some challenges in the crypto market, including the bankruptcy of FTX, and a bearish global stock market, Bitcoin has seen growth alongside Ether, decentralized finance markets, and the broader equity market. While some analysts believe that sentiment is not yet bullish, the recent price rise and on-chain data suggest that Bitcoin might be entering the later stages of a bear market.
However, the macro sentiment remains a cause for concern. Bitcoin is highly correlated to the US stock market and any bearish developments could impact crypto’s performance. Despite this, on-chain data from Glassnode suggests that short-term holders (STH) of Bitcoin are selling at a profit while long-term holders (LTH) continue to hold large positions. Additionally, selling pressure from Bitcoin miners, a crucial part of the ecosystem, has reached a three-year low, implying weaker selling pressure. Both trends are generally considered bullish for Bitcoin and the overall market. With that said, here is today’s most pressing crypto news.
(Source: Glassnode)
- On Tuesday, The UK Treasury announced plans to further regulate the cryptocurrency industry, bringing it under the umbrella of mainstream financial services regulation. New rules in the UK will govern admission to a trading platform, public offerings, payments, deals, platform operation, custody, mining, and blockchain node operation. Companies providing crypto services to the UK, regardless of location, must have a license, as well as meet capital and liquidity requirements. The proposals aim to move the UK's crypto regulatory regime to a more neutral position after suggestions that previous rules were too lax. 85% of crypto groups that tried to obtain FCA registration have failed, leading to criticism that the UK stifled innovation. The government is also planning a temporary exemption that will allow crypto companies registered on the anti-money-laundering list to promote their services while work on a broader cryptocurrency framework continues.
- The Federal Reserve (FED) raised interest rates by 25 basis points from 4.5% to 4.75%, falling in line with market expectations. In his press conference, FED chair Jerome Powell discussed their commitment to lowering inflation to its target of 2%. Powell's comments about the disinflationary process starting sent both Bitcoin and traditional equity markets upward but sharply corrected back to opening day prices. Other cryptocurrencies such as Ether and crypto-exposed stocks also experienced mild growth. Investors are now pricing in an 86% chance of another interest rate hike in March.
- Pow.re, a Canadian cryptocurrency mining firm, has closed a $9.2 million Series A funding round and received an $18 million strategic investment. The funding round was led by Haru Invest and valued Pow.re at $150 million. The company currently operates mining facilities in Canada, powered by hydro and wind energy. The $18 million investment will be used to finance Pow.re's expansion into Paraguay. Using hydroelectric power, the expansion will bring the company’s total mining capacity to over 500 Peta hash per second.
- North Korea-backed hackers stole $1.7 billion worth of cryptocurrency in 2022, according to blockchain analysis firm Chainalysis. The amount is four times more than the country's previous record for cryptocurrency theft, which was $429 million in 2021. It also made up 44% of the $3.8 billion stolen in crypto hacks last year, which the firm referred to as the biggest year ever for crypto hacking. In recent months, the FBI has confirmed that the Lazarus Group, a North Korean affiliate, was responsible for a $100 million crypto theft on the Horizon Bridge blockchain network. Decentralized finance protocols accounted for 82% of cryptocurrency stolen in 2022, making them attractive to hackers.
- A reported shareholder of South Korean crypto exchange Bithumb, Kang Jong-Hyun, was arrested on charges of embezzlement, breach of trust, and fraudulent transactions. The arrest took place during a turbulent period for Bithumb, as the company is currently being investigated for price manipulation and tax evasion. Bithumb denies any connection to Kang and claims he is not related to the company. This arrest is separate from the tax probe and focuses on allegations that Kang stole company money and manipulated stock prices. Bithumb is one of only five remaining Korean crypto exchanges following a crackdown in 2021.