The biggest crypto news and ideas of the day |
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Do Kwon Pleads Not Guilty After Extradition |
Do Kwon, founder of the failed Terra Luna crypto ecosystem, pleaded not guilty to charges of fraud following his Dec. 31 extradition to the U.S., Reuters reported on Thursday.
Kwon's Terraform Labs developed the luna cryptocurrency and algorithmic stablecoin terraUSD, which collapsed in 2022 with the loss of an estimated $40 billion. Kwon faces charges that include securities fraud, wire fraud, commodities fraud and money laundering conspiracy. Federal prosecutors allege that Kwon misled investors in 2021 about the algorithm that was designed to maintain stablecoin terraUSD's value of $1, according to Thursday's indictment.
Magistrate Judge Robert W. Lehrburger for the Southern District of New York ordered Kwon to be detained ahead of returning to court on Jan. 8.
Kwon was arrested in Montenegro in March 2023 on passport forgery charges, and has been fighting extradition to the U.S. for over a year. |
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Cango Becomes Big Mining Player |
The bitcoin (BTC) mining industry was shaken up in the last months of 2024 by the sudden entrance of a new player: Cango (CANG), a Chinese firm that specializes in providing loans to automobile buyers.
Based in Shanghai and valued at $363 million on the stock market, Cango is in the process of acquiring 50 exahashes per second (EH/s) worth of mining power, meaning that the auto lending platform will become one of the largest bitcoin miners in the world once its entire fleet goes online.
“I guess it’s surprising for people in the [bitcoin mining] industry because nobody has ever heard of Cango before,” Juliet Ye, the company’s senior director of communications, told CoinDesk in an interview. “But the history of Cango is a history of adaptation. We’ve diversified into different areas at least two or three times [since the firm was established in 2010].”
Getting such a large bitcoin mining fleet isn’t cheap. Cango paid $256 million in cash for the first 32 EH/s worth of computing power, which it purchased from bitcoin mining machine manufacturer Bitmain. It will be issuing $144 million worth of shares for the remaining 18 EH/s, which it is acquiring from Golden TechGen — a firm owned by former Bitmain Chief Financial Officer Max Hua — as well as other undisclosed mining machine sellers. Once the transaction is settled, Golden TechGen and these other sellers will end up owning approximately 37.8% of Cango. The diversification into bitcoin mining is already bearing fruit. Cango’s stock finished 2024 at $4.56, up more than 362% from the start of that year. Even better, Ye said, this new bitcoin mining strategy has catapulted Cango into the spotlight.
“It’s been really hard for us to gain traction around the company, as a small- to mid-cap listed Chinese firm in the U.S.,” Ye said. “All of a sudden, a lot of people are very much interested in Cango. The buzz around the company — we’ve never seen this before in the past.” |
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Bitcoin Hashrate Keeps Grows |
Bitcoin's (BTC) hashrate, the computational energy needed to mine a block in a proof-of-work blockchain, is on track to reach 1 zettahash per second before the next halving event in about 3.5 years, putting miners under pressure to secure cheap power deals and more efficient equipment.
The average hashrate could reach that level, equivalent to 1,000 exahash per second (EH/s), by 2027 even if it rises at the rather sedate pace of 20% a year. It's grown an average of 65% a year since 2020 and is currently around 787 EH/s on a seven-day moving average basis, according to Glassnode data.
The hashrate is an important component of bitcoin miners' profitability. The higher the hashrate, the higher the energy costs, which is why it's so important for miners to optimize their business operations. It also plays into network security, which has appreciated 56% in the past year.
The pace of growth accelerated in the second half of 2024 after April's halving, when the block rewards dropped 50% to 450 BTC per day, reducing the revenue miners receive. The squeeze became so intense that some miners couldn't survive by mining bitcoin alone. They had to pivot some of their operations to artificial intelligence (AI) computing and some even opted out to buy bitcoin in the open market. |
Cardano's ADA on the Rise Too |
Programmable blockchain Cardano’s ADA token jumped 12% in the past 24 hours to lead gains among crypto majors, with rangebound trading in bitcoin (BTC) influencing the broader market.
ADA crossed $1, a three-week high, as BTC, ether (ETH), Solana’s SOL and dogecoin (DOGE) added under 2%. The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market cap, rose 1.57%. Traders expect bitcoin price-action to remain rangebound until late January, with gains expected from February onward as President-elect Donald Trump takes office, as a CoinDesk analysis previously noted.
ADA’s bump came on no immediate catalyst, but the protocol is set to see several fundamental developments in the coming months. These include a bitcoin-centric decentralized financial ecosystem and ongoing efforts to improve Cardano’s scalability, network performance and interoperability with other networks.
Price-chart analysis suggests further gains of as much as 30% for the token ahead.
“ADA's three-day rise has lifted prices above a trendline characterizing the four-week pullback from early December highs,” CoinDesk analyst Omkar Godbole said. “The breakout and a renewed bullish crossover on the momentum indicator MACD suggest the potential for a re-test of the Dec. 3 high of $1.32.” “The widely-tracked 14-day RSI is looking to cut through a descending trendline, validating the bullish price action,” Godbole added. In technical analysis, MACD (Moving Average Convergence Divergence) indicates momentum using average prices over a period, with a bullish crossover meaning a potential price increase. RSI (Relative Strength Index) measures the speed and change of price movements; and cutting through a trendline suggests continued upward movement. |
The Takeaway: Why a Bitcoin Reserve? |
Finance is increasingly a weapon of war. United States policymakers and our allies focus too narrowly on macroeconomic tools like sanctions and promoting the dollar as a reserve currency when the modern front is evolving. Today, the real battles are being waged on smartphones and in the global currency markets.
China is waging a multi-decade plan to displace the United States' greatest asset: the dollar. The dollar is critical to the United States' economic and geopolitical power as the global reserve currency. Without it, our influence would weaken, and our debt would become a bigger problem. This is precisely what the Chinese Communist Party and the Kremlin want. China and Russia have shed billions of dollars worth of U.S. Treasury holdings while growing their stockpiles of gold. Our sanctions, designed to separate countries from the "Western" economic system, are no longer enough of a deterrent for those who can control financial activity within their borders and project their power outward.
Authoritarian adversaries — including China, Iran and Russia — are actively building parallel cross-border economic systems that will pull into their orbits not only neighboring countries but also our allies who trade heavily with them. For example, over half of businesses in Japan accept Alipay, while more than one-third accept WeChat Pay. This distribution gives two Chinese firms unprecedented visibility into the individual market transactions of Japanese consumers and businesses. It could allow China to disrupt Japan’s economy should tensions escalate, such as in a potential conflict over Taiwan. China sees financial technology and cryptocurrency as tools to extend its financial power and surveillance globally. The United States must respond in two ways: export our financial technology and systems worldwide and embrace bitcoin as a strategic reserve asset instead of stifling innovation.
Lawmakers and politicians on both sides of the aisle, most notably President-elect Donald Trump, recognize the power of holding bitcoin on the nation’s balance sheet as a hedge against inflation. This direction would also strengthen U.S. resilience against economic challenges posed by China’s financial strategies.
The Federal Reserve, like many central banks, holds a diverse portfolio of reserve assets. As of 2024, this includes approximately $35 billion in foreign currencies and $11 billion in gold stock. These holdings demonstrate America’s economic strength and provide liquidity during financial stress. However, in our rapidly digitizing world, the absence of a native digital asset in this portfolio is becoming increasingly conspicuous.
With its global reach and growing adoption, bitcoin is the ideal candidate to fill this gap. Often called “digital gold,” bitcoin is a scarce commodity. The U.S. is the largest nation-state holder of bitcoin, having seized 210,000 coins from illegal actors. This gives the U.S. a first-mover advantage and could secure our economic future. Critics may argue that bitcoin's volatility makes it unsuitable as a reserve asset. However, this volatility will likely decrease as adoption grows and the market matures. In 2021, El Salvador recognized bitcoin as legal tender and began purchasing it as a treasury reserve asset. They have seen a 100% increase in value and have no intention of selling.
Read the full op-ed here. |
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