Welcome to this Weekly Wednesday Roundup, your comprehensive source for the latest updates in the cryptoverse and blockchain. In this edition, we share the most impactful news from the space, covering topics like equity stakes in Core Scientific by Bitmain and Anchorage, Bitdeer’s expansion in Bhutan, Marathon Digital’s Q2 earnings, Genesis Digital Assets’ new data centers, insights on the Bitcoin ETF approval timeline, legal developments involving Sam Bankman-Fried, PayPal’s stablecoin impact, the Federal Reserve’s crypto oversight program for banks, and a record-breaking metric for long-term Bitcoin holders. Let’s get started.
Bitmain, the world’s leading bitcoin mining machine manufacturer, along with Anchorage Digital, a crypto platform, are poised to acquire equity stakes in Core Scientific (CORZ), the second-largest publicly listed bitcoin miner, as part of Core’s bankruptcy proceedings. The reorganization plan includes Core Scientific purchasing 27,000 units of Bitmain’s Antminer S19j XPs for $77.1 million, funded by $23 million in cash and $54 million in equity. This move reduces Core Scientific’s cash requirement by $30 million, as the purchase is partially funded with equity. This is anticipated to be Bitmain’s initial equity investment in a publicly listed miner. The plan awaits creditor approval and court endorsement for various settlements outlined in court documents.
Bitdeer Technologies, founded by Jihan Wu, has completed the construction of a mining facility in Bhutan and is undergoing power-on testing. Around 15,000 additional mining machines arrived at Bitdeer’s Gedu data center in Bhutan in July, with approximately 11,000 miners currently operational. About 23,000 newly-purchased mining rigs have arrived at the facility, set to provide a hash rate of approximately 2.5 EH/s once energized. Bitdeer’s proprietary hash rate rose to 7.9 EH/s by July-end, primarily due to new mining machines in Bhutan. The company aims to leverage Bhutan’s energy resources, with plans for mining projects amounting to nearly 20 EH/s hash rate, and it went public on Nasdaq in April with a valuation of $1.18 billion.
Marathon Digital, a prominent North American Bitcoin miner, fell short of earnings expectations in its second-quarter report, revealing an adjusted loss per share of $0.13 against FactSet analyst projections of a $0.06 loss. The company’s revenues were reported at $81.8 million, slightly below the anticipated $83.4 million. Despite the earnings miss, Marathon’s shares, trading around $15.73 after-hours, have surged nearly 360% this year in tandem with the rising value of bitcoin. The company recorded a $23.4 million gain from bitcoin sales in the quarter, constituting 63% of its mined bitcoin, which was used to cover operational expenses. Additionally, lower impairment charges and improved efficiency were noted, with Chairman and CEO Fred Thiel highlighting the expansion of hash rate.
Genesis Digital Assets (GDA), a major Bitcoin mining company, has unveiled three new data centers in South Carolina’s Western region as part of its strategy to enhance its presence within the United States. GDA’s current hash rate accounts for 2% of the total Bitcoin network. The Anderson data center, operational since February 2023, holds an 18 MW capacity, while the other two centers near Union and Lockhart, active since March 2023, have a combined capacity of 15 MW. The Anderson facility, using North American-built infrastructure equipment, has repurposed an abandoned textile warehouse. Emphasizing local engagement, 95% of personnel involved in constructing the other centers were hired locally, generating nearly 150 jobs. GDA’s move aligns with its commitment to clean energy, utilizing hydroelectric power and environment-friendly technology in these data centers.
Galaxy Digital CEO Mike Novogratz suggests that the first spot Bitcoin exchange-traded fund (ETF) in the United States could be approved within the next six months, based on insights from insiders at BlackRock and Invesco. While the specific timing of the ETF’s approval remains uncertain as it’s under the Securities and Exchange Commission’s review, Novogratz anticipates fierce competition for market share among approved spot Bitcoin ETF issuers, such as BlackRock and Invesco, once the approval is granted. Additionally, analysts speculate that the approval of spot Bitcoin ETFs could potentially come sooner, depending on the outcome of Grayscale’s lawsuit against the SEC.
The U.S. Department of Justice (DOJ) is still pursuing allegations of an “illegal campaign finance” scheme against FTX founder Sam Bankman-Fried, planning to integrate these charges into a wire fraud accusation for his trial in October. Despite dropping the campaign finance charge to comply with the U.S.’s extradition treaty with the Bahamas, the DOJ intends to include the campaign finance allegations within the wire fraud charges, asserting that Bankman-Fried used customer deposits for political campaigns as part of the fraudulent activities originally charged. The trial is set to commence on October 2, 2023, with subsequent trials scheduled for additional charges stemming from multiple superseding indictments.
The launch of PayPal’s stablecoin (PYUSD) is not expected to impact Tether (USDT) since the stablecoin is introduced in the U.S., where Tether does not operate, according to Tether CTO Paolo Ardoino. However, if PYUSD is introduced in international markets, Ardoino believes it would benefit the overall crypto industry and could potentially erode revenues from traditional payment networks like Mastercard and Visa. Ardoino also suggested that the launch might lead to competition decline for Tether’s rivals focused on the U.S., such as Circle’s USDC stablecoin. While the immediate impact of PYUSD on USDC is uncertain, experts speculate that the two may compete for customers preferring U.S.-based regulated stablecoins, potentially expanding into the crypto trading and DeFi markets in the future.
The U.S. Federal Reserve has introduced a new program to oversee crypto activities within banks under its authority. This program aims to provide more detailed guidance on the central bank’s expectations from banks regarding their engagement with digital assets. While this initiative doesn’t alter existing regulations, it clarifies the process of oversight, involving specialized digital asset experts alongside regular supervisors. The Fed has also elaborated on the pre-approval requirements for banks engaging with stablecoins, emphasizing the need to demonstrate the ability to manage risks effectively, including those related to money laundering and cybersecurity. The program is designed to align with the crypto guidance issued by the Fed earlier and highlights the intent to maintain a clear separation between the banking system and the crypto sector while allowing supervised experimentation for innovation.
According to data from blockchain analytics firm Glassnode, long-term Bitcoin holders now control a record 14.599 million BTC, marking the highest value this metric has reached. These long-term holders, defined as addresses holding Bitcoin for at least 155 days, are statistically unlikely to spend, indicating a HODLing strategy. This category of holders accounts for 75% of Bitcoin’s circulating supply, suggesting a growing belief in its role as a store of value. Additionally, Bitcoin’s realized volatility has dropped to historic lows, indicating a phase of reduced price fluctuations, which historically aligns with re-accumulation periods after bear markets.
That concludes this week’s roundup of noteworthy events in the crypto realm. Stay informed with our AsicZ blog as we continue to deliver the latest insights and updates shaping the dynamic world of digital currencies. AsicZ is also your trusted source for a vast selection of Bitcoin miners and everything ASIC from A-Z. Visit AsicZ.com to view our full inventory updated on a daily basis. If you’re looking for MaaS (Mining as a Service) solutions, we offer industry leading .03/kWh power rates. Check out AsicZ.com/maas to learn more. Join us again next Wednesday for another edition of the AsicZ Weekly Roundup. Until then, stay tuned and stay informed.