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Cryptos extended their rally Friday as stocks traded sideways. Analysts say the bull run for bitcoin is beginning.

Bitcoin was back in the green Friday after a slight dip Thursday. The largest crypto was trading around $43,700 at time of publication after briefly surpassing $44,000 yet again.

Ether was trading mostly flat Friday, but maintained its monthly gains of nearly 25% over the past 30 days. As 2023 comes to a close, ether is up around 95% year-to-date.

Equities posted mild gains, with the S&P 500 and Nasdaq Composite indexes gaining around 0.2% each midway through the trading session Friday.

With bitcoins next halving slated for April 2024, coinciding with a potential policy shift from the Federal Reserve, investors may be in for the perfect storm Thomas Perfumo, head of strategy at Kraken, said.

Read more: Bitcoin flirts with breakout, price mirrors lead-up to 2012 halving

This is going to be the fourth halving and pretty much every single one has kicked off a bull cycle where the top has come in about 18 months or so after the halving event, Perfumo said.

This halving is special in the sense that youre going to have inflation in bitcoins circulating supply drop below 1% for the first time in history, he added. Thats basically crossing that threshold that gold has historically served as this kind of bellwether-sound currency where the supply growth of gold is something thats been north of 1%, but very steady and very low single-digits.

The catalyst for the rally, which has seen both bitcoin gain more than 56% since the start of October 2023, was optimism about a bitcoin exchange-traded fund finally hitting the market in the US, Luke Nolan, research associate at CoinShares, said.

People [are] frontrunning what they believe will be significant flows stemming from the potential launches of the ETFs, Nolan said. If the SEC approves a spot bitcoin ETF, there is a stamp of approval for the asset class from the largest capital market regulator in the world.

As traders wait anxiously for the first ETFs to hit the market, Perfumo said the rally for spot bitcoin prices shouldnt stop there.

Read more: Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day

Thats positive for prices, generally speaking, Perfumo said. What I mean by that is one of the biggest barriers for the US specifically when it comes to investment has been the accessibility of crypto in retirement accounts. Having crypto in a securitized format via an ETF, which is a very commonly understood product nowadays, even by consumer investors, I think thats a really powerful statement.

JTO, the governance token for Solana-based staking project Jito, made its debut via an airdrop Thursday. Close to $110 million was up for grabs when the airdrop hit Thursday morning, and by Friday, JTO was trading more than 180% higher than its initial price of $1.20.

Solana (SOL) apparently riding the JTO wave, posted gains Friday as well, up more than 11% over the past 24 hours at time of publication.

If history repeats itself, what you tend to see is the smart contract platforms pick up and then the dapps and whatnot that are subject to higher levels of volatility because theyre smaller assets in general tend to follow, Perfumo said. I can definitely see a situation where Bitcoin leads into a cycle for Ethereum, Solana and some of the other alts.

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Macro conditions, ETF optimism collide at the right time ahead of bitcoin halving - Blockworks

Top 10 Bitcoin Mining Countries & Their Renewable Electricity Mix

Bitcoin miners use an estimated 348 terawatt hours of electricity per year, and with the world increasingly moving to renewables, some are asking the question: just where does Bitcoin get its electricity?

To answer that question, we partnered with HIVE Digital to visualize data from the Cambridge Centre for Alternative Finance and Ember, a climate-oriented energy think tank, to look at the Bitcoin networks electricity mix.

This is part one in our How Green is Bitcoin? series, which examines the cryptocurrencys sustainability.

The top 10 countries for Bitcoin mining represent 93.8% of the entire network by hashratea measure of computational powerwith the U.S., China, and Kazakhstan rounding out the top three. Together these three countries hosted nearly three-quarters of the network at the end of 2021.

China used to be the top spot for Bitcoin mining, up to 75% of global capacity, but a crackdown in the summer of 2021 saw their share drop to nil in just a couple months. Many miners relocated to nearby Kazakhstan, attracted by cheap electricity, loose regulations, and a stable political climate, while others opted for the United States. A sizable covert mining scene has also emerged in China, now that the dust has settled.

At the bottom of the top 10 are Ireland, Singapore, and Thailand, which together host 4.9% of the network. Irelands reported shareand this applies to sixth-place Germany, as wellis thought to be a significant overstatement caused by miners in other countries masking their true locations.

On a national basis, the U.S., China, and Kazakhstan each had renewable shares of 22.5%, 30.2%, and 11.3% respectively. For context, renewables made up 30% of the worlds electricity generation in 2022 (not including nuclear).

Kazakhstans dismal renewable share is due to their heavy reliance on coal (60%), which is also a major export of the central Asian country. At the same time, coal contributes a similar amount of the electricity in China (61%), but their overall renewable share is higher because of their breakneck expansion of wind and solar power.

Just where a Bitcoin miner sets up their rig is important, because unlike many other industries with factories or big head offices, they are mobile (Google Bitcoin mining shipping containers if you need convincing).

Where they choose to put out their shingle is based on things like the regulatory regime, price of electricity, and because Bitcoin rigs generate a lot of heat, the average outdoor temperature. On this last point, here is how the top 10 breaks down by mean annual temperature:

Increasingly, though, with climate change driving the push to renewables, many Bitcoin miners are looking more closely at where their electricity is coming from. This could be why Canadawith its embarrassment of hydroelectric richeshas crept up the ranking from less than one percent of the network in 2019, to six-and-a-half percent at the end of 2021.

But considering that top renewable countries such as Iceland, Paraguay, and Norway together only hosted just over one percent of the global network, theres still a lot more room left for growth.

Learn more about how Bitcoin miner and data center operator HIVE Digital is using clean, renewable energy at its facilities in Canada, Sweden, and Iceland.

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Top 10 Bitcoin Mining Countries and Their Renewable Electricity - Visual Capitalist

As bitcoin (BTC) solidifies its dominance over its main rival ether (ETH), traders are showing a clear preference, despite the crypto market witnessing its most prolonged liquidity crisis in years.

Data from market intelligence firms Glassnode and K33 show the crisis, echoing patterns seen during the 2014-15 and 2018-19 bear markets, has persisted for over 535 days.

One significant date for market observers is on Friday when the US Securities and Exchange Commission is poised to make its decision to appeal the recent Grayscale court ruling linked to its spot BTC ETF application.

An absence of an SEC appeal could spark a market reaction, though its longevity remains in question, K33 said in a recent note.

Bitcoins continued appeal seems rooted in its role as digital gold in risk-averse scenarios and rising anticipation surrounding the potential rollout of spot bitcoin ETFs, the market intelligence firm added.

Elsewhere, derivatives markets are revealing subtle shifts.

CMEs next month premium and BTC perpetuals offshore funding rates have both seen an uptick, suggesting cautious optimism, K33 alluded.

However, with offshore funding rates still lingering below the neutral mark and continued outflows from BTC ETFs, the market, despite its optimism, seems hesitant to expect further price rises, K33 said.

Even as ether trails behind, bitcoins steadfast position as traders preferred digital asset highlights its impressive year-long trajectory, boasting a rise of over 63% this year. The worlds second-largest digital asset, meanwhile, is up just half that amount at 30% to $1,560, Blockworks data shows.

Analysis points to the Realized Cap data which underscores the dormant nature of coins transferred on-chain suggesting very few coins transferred on-chain are being used to take profit or minimize losses, Glassnode said in a blog post on Monday.

Liquidity continues to dry up across the digital assets as network settlement, Exchange interaction and capital flows reside at cycle lows, heavily underscoring the current acute apathy experienced by the market, it said.

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Follow Sam Bankman-Frieds trial with the latest news from the courtroom.

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Bitcoin favored over ether among traders in thin liquidity - Blockworks

By Frances Yue

Welcome back to Distributed Ledger. This is Frances Yue, reporter at MarketWatch.

Bitcoin (BTCUSD) has traded lower since the Hamas militant group carried out an unprecedented attack on Israel on Oct. 7. That's challenging a long-held industry view of crypto as a nonsovereign store of value, especially useful during wars and natural disasters.

The retreat of bitcoin comes in contrast with its rally after Russia invaded Ukraine in February, 2022.

I caught up with a few industry participants to find out why.

Find me on Twitter at @FrancesYue_ to share any thoughts on crypto or this newsletter.

Bitcoin's role in wars

Bitcoin's price is primarily dominated by macroeconomic conditions at the moment, with the global economy facing risks of a recession, according to Alex Tapscott, head of digital assets and portfolio manager at Ninepoint Partners.

"I think the fact that there's a war in the Middle East and a war in Europe, and heightened tensions around the world does suggest to me that there's a lot of risk in the market," Tapscott said.

It also didn't help bitcoin's reputation that a Wall Street Journal article reported three militant groups, Hamas, Palestinian Islamic Jihad and their Lebanese ally Hezbollah, received large amounts of funds through crypto, during the year leading up to the attacks on Israel, noted Nicholas Colas, co-founder at DataTrek.

All three militant groups have been designated foreign terrorist organizations by the U.S. government and are subject to sanctions by the Treasury department.

"It is too early to tell how much reputational damage has been done to the [digital asset] space, or what the longer run regulatory repercussions will be," Colas wrote in a Thursday note.

"At the very least, however, news that terror organizations use virtual currencies at scale will only harden views that this industry needs a lot more regulation before investment products like ETFs can be released to the public. We would certainly not be adding to virtual currency holdings on the recent weakness. This story will take time to play out," Colas wrote.

For the Ukraine-Russia war, crypto has been used in fundraising for both parties.

SBF trial

Caroline Ellison, former chief executive at crypto exchange FTX's sister hedge fund Alameda Research, has been testifying in FTX founder Sam Bankman-Fried's fraud trial, which kicked off last week. Ellison, who has also been dating Bankman-Fried on and off for two years, is a star witness for the trial.

Ellison told the jurors that Bankman-Fried ordered her and others to commit criminally fraudulent acts, according to reports by the Wall Street Journal.

She said she and Bankman-Fried knew for months about Alameda's alarming financial conditions and worried whether they could keep it from collapsing. She said the final days of FTX was "the worst week of my life," according to the Wall Street Journal.

Crypto in a snap

Bitcoin (BTCUSD) lost 3.4% in the past seven days and was trading at around $26,720 on Thursday, according to CoinDesk data. Ether (ETHUSD) fell 5.3% during the same period at around $1,531.

Must-reads

Israel freezes crypto accounts seeking Hamas donations, police say (Reuters)Binance Founder's $1 Billion Plan to Save Crypto Quietly Fizzled Out (Bloomberg)

-Frances Yue

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-12-23 1648ET

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Cryptocurrencies are touted as resilient during wars, but bitcoin is ... - Morningstar

ProShares is continuing its focus on the cryptocurrency market with the launch of three new ETFs, one of which directly tracks the performance of ethereum, the second-largest cryptocurrency.

ProShares Ether Strategy ETF (EETH), an actively managed ETF, is the first fund of its kind to trail the native currency of the ethereum platform, according to the firm. In conjunction with the launch of EETH, the Bethesda, Md.-based firm also rolled out ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) and ProShares Bitcoin & Ether Market Cap Weight Strategy ETF (BETH).

Two years ago, the firm introduced the ProShares Bitcoin Strategy ETF (BITO), which tracks the bitcoin market and has amassed more than $850 million in assets since it launched, according to Morningstar.

Given that success, the firm elected to move forward on a fund that follows the second largest cryptocurrency, Ether, according to Simeon Hyman, global investment strategist at ProShares.

It made a lot of sense for us to bring that solution to market bringing the expertise and the learning we have from running BITO, he said. [We are] now offering folks the opportunity to access the second largest coin.

BETE rebalances monthly to a 50/50 weighting between the two cryptocurrencies. BETH rebalances monthly based on the market capitalization of bitcoin and ether, the firm said.

We believe that BETE and BETH are groundbreaking in that they offer investors the opportunity to target the performance of the two leading cryptocurrencies in their brokerage accounts through one transaction with a single ticker, said Michael Sapir, CEO of ProShares. We are offering two weightings depending on an investors desired exposure.

Including both exposures in a portfolio can enhance its efficiency so long as advisors maintain their investment into those funds to a modest level, according to Hyman.

The thing that is very clear about ethereum and bitcoin is [their] volatility, and it zigs when traditional asset classes zag, he said. When you have those two attributes that means theyre powerful diversifiers.

Over the past year, cryptocurrency has endured its share of negative publicity, including the collapse of crypto platform FTX amd the ongoing trial of FTX founder Sam Bankman-Fried. Yet cryptocurrency has been performing well this year, according to Hyman.

The resilience of these two cryptocurrencies is certainly duly noted, he said.

The three most recent ETFs all have a 95-basis point expense ratio and are available through most major brokerage firms, according to Hyman.

With the new additions, ProShares now has five crypto-linked ETFs in its lineup. The fifth one is the ProShares Short Bitcoin Strategy ETF (BITI), which launched last year and is the first U.S. short bitcoin-linked ETF. It has more than $75 million in assets, according to Morningstar.

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ProShares Launches 3 ETFs Linked To Bitcoin, Ether - FA Mag