Bitcoin's Best Week In Months | Satoshi Wannabe In Court

ETF Hangover Ends.

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Nina Bambysheva Senior Reporter, Forbes Money & Markets
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Steven Ehrlich Director, Forbes Digital Assets
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BITCOIN REVERSES SLUMP

The original cryptocurrency surged Friday to $48,000, erasing January’s nearly 20% selloff of its post-ETF hangover. The rally comes on the heels of the S&P 500 topping 5,000 for the first time Thursday and robust demand for the spot bitcoin exchange-traded funds.

Growing optimism for the approval of U.S. exchange-traded funds based on spot bitcoin prices kindled a rally that began in September with the senior crypto trading around $25,000, based on the idea that the investor-friendly funds would widen demand. Bitcoin topped out around $48,000 last month as the funds began trading, then retreated below $40,000.

Now, as the funds are gathering assets, bitcoin is clawing back those losses. Combined assets of the nine new ETFs plus Grayscale Bitcoin Trust, which reorganized from a closed-end structure, are now more than $30 billion. That reflects a net gain from the $29 billion that was held in the Grayscale fund right before the ETFs began trading on January 11.

While some holders took advantage of the format switch to sell their shares in Grayscale, reducing its assets to about $20 billion late last month, the fund is on track to have its first positive week since the change, with assets rising to more than $21 billion on Thursday.

Ether has also had a big week and is nearing an 8.5% gain after Ark Invest/21Shares, one of the firms that launched a spot bitcoin ETF, amended its spot Ethereum ETF application with the Securities and Exchange Commission to specify that the fund would feature a cash creation and redemption mechanism similar to that of spot bitcoin funds.

NY TRIPLES FRAUD ESTIMATE IN LAWSUIT AGAINST DCG

New York Attorney General Letitia James filed an amended complaint against Digital Currency Group, its bankrupt lending affiliate Genesis Global Capital and Gemini, the Winklevoss twins’ cryptocurrency exchange on Friday.

The initial lawsuit, filed in October, alleged that the three entities defrauded more than 230,000 investors of more than $1 billion. The state is now seeking more than $3 billion in restitution from these companies.

“After months of false promises, we pulled the curtain back and revealed that DCG was lying to investors and defrauding them out of billions,” said James. “The fraud and deceit were so expansive that many additional people have come forward to report similar harm.”

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$47,438

10.6%

Ether (ETH)

$2,490

8.3%

Tether (USDT)

$1.00

0%

Binance Coin (BNB)

$323

7.4%

Solana (SOL)

$105

5.8%

Sources: Forbes Digital Assets, CoinGecko. Prices as of 4:24 p.m. on February 9, 2024.

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MINERS BULKED UP FOR BITCOIN’S HALVING

Over the past year, bitcoin mining companies have been actively raising equity, firming up their balance sheets and eliminating debt in preparation for the so-called halving, which will slash bitcoin mining rewards by 50% and is expected to occur in April. The biggest publicly traded bitcoin miners raised $1.63 billion in equity through the first nine months of 2023. These miners likely sold additional equity in the final three months of the year, but we won’t know exactly how much until they report end-of-year financials later this month.

Some miners, like Marathon, used the fresh capital to pay down hefty debt loads incurred when they scaled up to ride the 2021 bull run, while others used the funds to pay for new mining machines.

IS HE SATOSHI? CRAIG WRIGHT’S CLAIM TO BE BITCOIN INVENTOR BEING TESTED IN LONDON COURT CASE

For years, Craig Wright has claimed to be the anonymous creator of bitcoin, Satoshi Nakamoto. A nonprofit group called Crypto Open Patent Alliance is trying to prove he’s not and asserts Wright used his claim to threaten developers working on the open-source technology with litigation. Nearly three years after filing the lawsuit, COPA finally has a chance to present its case against Wright at a trial that began in London court on Monday and is expected to last approximately a month. Read more.

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