StealthEX & CryptoDaily: Key Elections, Investments, and Crypto Market Movements

November 24, 2023

Crypto World

Maciej Zerelik

Welcome to StealthEX weekly crypto digest, in collaboration with CryptoDaily! We’re here to bring you a concise summary of this week’s key events and trends in the crypto world. Our aim is clear: we want to keep you informed about the latest developments shaping the industry. Let’s dive into the highlights from the past week. Let’s get started!

Javier Milei’s Landmark Victory: Steering Argentina Towards a Bitcoin-Friendly Future

In a groundbreaking election, Javier Milei has clinched the presidency of Argentina, capturing over 55% of the votes in a decisive victory against Sergio Massa, the country’s Minister of Economy. Known for his fervent support of Bitcoin, Milei’s win signals a potential shift in Argentina’s economic policies. His tenure, set to begin on December 10, comes at a time when Argentina faces severe economic challenges, with a 140% surge in annual inflation and nearly 40% of its population living in poverty.

The election, which hinged on critical issues like the nation’s crippling inflation crisis, showcased Milei’s sharp criticism of Argentina’s central bank. He often described it as a tool for political deceit through inflationary taxes. These economic struggles have raised alarm bells about a possible return to hyperinflation, a scenario Argentina hasn’t experienced in almost three decades.

In stark contrast to Massa’s approach, which included proposals for a central bank digital currency (CBDC) to combat inflation, Milei’s victory underscored his belief in Bitcoin’s potential to restore monetary power to the private sector. This belief was echoed in the cryptocurrency market, as Bitcoin saw a notable increase of nearly 3% within 24 hours after the election results were announced, reflecting Milei’s significant influence on the crypto landscape and his vision for Argentina’s economic recovery.

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Tether’s Bold $500 Million Foray into Bitcoin Mining

Tether, the entity behind the world’s largest stablecoin, is venturing into the Bitcoin mining industry with a massive $500 million investment. Under the leadership of the soon-to-be CEO Paolo Ardoino, Tether is expanding its horizons beyond stablecoin issuance. This strategic move involves the construction of new mining facilities in Paraguay, Uruguay, and El Salvador, aiming to contribute up to 1% of the total Bitcoin mining network’s computing power. These facilities are expected to range between 40 and 70 megawatts in capacity.

This ambitious plan also encompasses a $610 million debt financing facility extended to Northern Data Group, a German mining company. This decision aligns with Tether’s pattern of increasing loans, reflecting its deepening engagement in the broader crypto and technology sectors. Tether’s investment strategy includes backing initiatives in artificial intelligence, as evidenced by its recent investments.

By the end of 2023, Tether aims to boost its direct mining operations to 120 megawatts, with a goal to reach 450 megawatts by the end of 2025. This expansion is part of a larger trend of institutional interest in Bitcoin, as major players like BlackRock and Fidelity also explore opportunities in the cryptocurrency space. As Tether embarks on this new journey, Ardoino is also set to retain his role as the Chief Technical Officer at Bitfinex, Tether’s parent company​.

BlackRock’s Ethereum ETF Filing: A Catalyst for Cryptocurrency Growth

BlackRock, the world’s largest asset manager, has taken a groundbreaking step by filing for a spot Ethereum ETF with the U.S. Securities and Exchange Commission (SEC). This move, following their earlier application for a Bitcoin ETF, positions BlackRock at the forefront of mainstream cryptocurrency integration. The proposed Ethereum ETF, named iShares Ethereum Trust, aims to track the performance of Ether’s price, reflecting its market value before expenses and liabilities.

The filing comes shortly after the registration of the iShares Ethereum Trust entity, highlighting BlackRock’s strategic commitment to cryptocurrency. The Ethereum ETF will be under the custody of Coinbase Custody Trust Company, with the CME CF Bitcoin Reference Rate from CF Benchmarks as its benchmark, mirroring the approach for the proposed Bitcoin ETF.

While BlackRock’s Bitcoin ETF application is still under SEC review, the company is actively engaging with trading firms to ensure liquidity for the ETF upon approval. This development has sparked significant interest in the crypto market, with both Bitcoin and Ethereum prices witnessing a positive surge following the news. The potential approval of both Bitcoin and Ethereum ETFs is poised to catalyze a bullish trend in the crypto market, reminiscent of the impact of BlackRock’s Spot Gold ETF approval in 2004, which led to a substantial rise in gold prices​.

Bittrex Global’s Closure: A Cautionary Tale in Regulatory Compliance

Liechtenstein-based cryptocurrency exchange Bittrex Global has announced a complete suspension of its operations by December 4, following a prolonged struggle with regulatory compliance issues. This decision mirrors the earlier shutdown of its U.S. counterpart, Bittrex, which ceased operations citing an unfavorable regulatory environment.

Bittrex Global’s announcement comes after a series of regulatory challenges, including a closure in the U.S. and a $29 million settlement with the Securities and Exchange Commission (SEC) over alleged securities law violations. The issues culminated in a Chapter 11 bankruptcy filing earlier this year, further complicated by allegations from the SEC of shared order books with its U.S. entity. The exchange, once a significant player with a daily trading volume nearing $6 million, has now ceased all trading activities, promotions, and referral programs.

In light of these developments, Bittrex Global has cautioned its users against making any deposits and has urged them to withdraw their assets as soon as possible, acknowledging the potential risks and losses involved in this process. The exchange has pledged continued support for its customers throughout the winding-down process, emphasizing the importance of clear communication and customer support during such transitions.

Gulf Binance: Binance’s Strategic Move into Thailand’s Crypto Market

Binance, a leading global cryptocurrency exchange, is gearing up to launch ‘Gulf Binance,’ a Thai-based crypto exchange, in early 2024. This venture is a collaboration with Gulf Energy Development, a major local energy company. Gulf Binance, which has already received approval from the Thai Securities and Exchange Commission, is set to provide digital asset exchange and broker services, adhering strictly to SEC regulations.

The launch of Gulf Binance is a significant step in Binance’s expansion strategy, combining its extensive digital asset expertise with Gulf Energy’s strong local presence. This joint venture, agreed upon in 2022, has been working in close coordination with Thai regulators to ensure full compliance. Gulf Binance aims to enhance Thailand’s blockchain ecosystem by offering services in digital asset infrastructure and blockchain technology. Initially, the platform will operate on an invitation-only basis, with plans to open to the broader public in 2024.

In addition to its exchange operations, Binance has also assisted the Royal Thai Police in combating cryptocurrency scams, helping to seize $277 million from fraudsters. This action reflects Binance’s commitment to security and regulatory compliance, reinforcing its position as a responsible player in the global cryptocurrency market.

Mastercard and Feedzai’s Partnership: Elevating Crypto Risk Management

Mastercard, a global leader in payment solutions, has announced a partnership with Feedzai, a financial crime and risk management firm, to enhance its cryptocurrency risk management capabilities. This collaboration aims to integrate Mastercard’s crypto intelligence technology with Feedzai’s RiskOps platform. The goal is to preemptively identify and prevent fraudulent transactions in the crypto space.

According to Feedzai’s research, up to 40% of scam transactions transition from bank accounts to crypto exchanges. Integrating Mastercard’s Cypher Armada with Feedzai’s platform will enable banks to immediately identify potentially fraudulent transactions, thus bolstering the security of digital transactions. This new solution is expected to safeguard around 900 million consumers globally.

Both companies emphasize the growing sophistication of financial crimes involving cryptocurrencies. This partnership is set to empower financial institutions with the necessary tools and insights to detect and prevent transactions linked to fraudulent crypto exchanges. Mastercard and Feedzai’s joint efforts aim to bolster customer security and trust in the digital ecosystem, addressing the increasing challenges faced by anti-money laundering (AML) professionals in a rapidly evolving digital financial landscape.

Crypto Market Rallies Amid DOJ and Treasury Crackdown on Binance and CEO Changpeng Zhao

In a significant development in the cryptocurrency world, the U.S. Justice Department, the Treasury, and the Commodity Futures Trading Commission (CFTC) announced an enforcement action against Binance, the world’s largest crypto exchange by trading volume, and its CEO Changpeng Zhao. This action, described as the most substantial to date against a cryptocurrency company, resulted in a fine exceeding $4 billion and forced CEO Changpeng Zhao to step down, facing criminal proceedings.

Contrary to expectations, the crypto market responded positively to this news. After an initial decline where Bitcoin dropped by 4.5% and other major cryptocurrencies also fell, the market quickly recovered. By the following morning, Bitcoin’s value rose above $36,700, recovering from a low of $35,600. Ethereum, another leading cryptocurrency, not only recovered but exceeded its pre-announcement price, crossing the significant $2,000 threshold.

However, there remains a concern regarding the broader market. The Total3 market cap of all cryptocurrencies (excluding Bitcoin and Ethereum) shows a head and shoulders pattern. If this pattern materializes, altcoins might see a retraction to a total market cap of $368 billion, an 8% decline from the current level. This situation warrants caution among traders, as a break to the upside could be highly bullish, whereas a decline could mean significant losses

This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.