Bitcoin turned 14 last month - Here's the news you need to know

Top Events

• January has been surprisingly strong in Bitcoin and cryptocurrencies more broadly. BTC has seen a massive 35% gain in AUD terms (and 37% from the November lows) and a growth in the market dominance of 2.35 percentage points as it leads the market recovery.

• Genesis Trading’s chapter 11 bankruptcy disclosed that it owes its top 50 creditors US$3.4 billion. The filing was met with a muted market reaction. Investors are still waiting to see what impact the Genesis bankruptcy will have on its sister company Grayscale, the world’s largest crypto asset manager.

• It will be a while until we can leave the FTX saga in the past. The new year kicked off with SBF pleading “not guilty” to all criminal charges, and the trial is now expected to start in October. Authorities are seizing assets to recover funds for victims. Meanwhile, SBF started a Substack and is blaming Binance for the fall of his empire.

Lightning Network Updates

• Strike, a Bitcoin-based payments app, has expanded to the Philippines to grow cross-border payments and remittance markets. Strike users can now send US Dollars directly to banks and mobile money accounts in the Philippines, one of the largest remitting markets in the world. Users convert Dollars to Pesos, and the app only uses Bitcoin under the hood due to the superiority of the network for overseas payments.

Bitcoin Mining

• New Hampshire is the latest state in the U.S. to explore the benefits of bitcoin mining to the electricity grid.

• Blockstream raised US$125 million and will use the funds to expand its bitcoin mining facilities amid strong demand for hosting from institutional investors.

• Bitcoin sales from miners have slowed to 3-year lows. There was a steep capitulation into the end of 2022 as one of the larger miners Core Scientific (NASDAQ: CORZ) filed for bankruptcy. Bitcoin cycles are generally defined by miner capitulation and this one has been particularly savage with massive losses for the investors in mining companies. The general mood appears to be that this is simply a bear market rally and normal downward service will resume shortly. However, we are now equidistant from the all-time high and the next halving (roughly 440 days from each); if previous cycles are a guide it may well be that we have turned a corner.

Best Articles and Podcasts

• Why Grayscale is suing the SEC over its denial of a bitcoin ETF. Michael Sonnenshein, CEO of Grayscale Investments, gives an overview of his firm’s case against the SEC. Big implications for the future of the Grayscale Bitcoin Trust.

Macro and Politics

• The UK Debt Office forecasts it will issue £240 billion in gilts every year for the next five years. UK GDP is about £2.2 trillion, so we are talking in excess of 10% of GDP in new bond issuance. As the Financial Times correctly asks, who is going to buy them?

• The upcoming June quarter will see elevated levels of low rate fixed mortgages rolling over to variable mortgages at much higher interest rates. Refinancing will be difficult for many borrowers due to a reduction in borrowing capacity and lower property valuations. Some pain ahead for the Aussie housing ponzi.

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