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Kyrgyzstan, known for its potential in cryptocurrency mining due to its renewable energy resources, experienced a significant drop in tax revenue from crypto mining in 2024. Despite the global surge in cryptocurrency valuations, the country collected only 46.6 million Kyrgystani soms ($535,000) in mining taxes, a stark contrast to the 93.7 million soms ($1 million) collected in 2023. This decline comes even as Kyrgyzstan's energy infrastructure, particularly its hydroelectric power, remains largely untapped, with only 10% of its potential hydropower developed. The tax rate for crypto miners in Kyrgyzstan is set at 10% of the electricity fee, encompassing both value-added and sales taxes. The situation highlights the challenges in harnessing renewable energy for economic benefits and the fluctuating nature of cryptocurrency markets. Meanwhile, discussions around Bitcoin mining's potential to stabilize renewable energy grids are gaining traction, with examples like Deutsche Telekom's initiative in Germany showing how surplus energy can be utilized effectively.
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The IRS has introduced new regulations that classify certain DeFi front-ends as brokers, mandating them to report gross proceeds from digital asset transactions. Effective from 2027, these rules aim to enhance tax compliance by making income from digital asset transactions more transparent. The regulations specifically target front-end platforms like decentralized exchanges that facilitate transactions, but do not extend to all DeFi applications. The IRS clarifies that these rules treat DeFi similarly to other industries, with no bias against the technology. The implementation will require brokers to start collecting necessary data in 2026, affecting an estimated 650 to 875 DeFi brokers and potentially 2.6 million taxpayers. This move is part of a broader effort to integrate digital assets into the existing tax reporting framework, ensuring that income from these transactions is accurately reported.
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The market capitalization of AI cryptocurrencies has significantly decreased by nearly 30% from its peak of $70.4 billion in December to $50.5 billion, according to CoinMarketCap data. This drop occurred amidst a general downturn in the crypto market, with Bitcoin also experiencing a correction. Despite this decline, there is optimism among analysts who anticipate a recovery during the 2025 altcoin season, potentially driven by more crypto-friendly regulations. The trading volume for AI tokens has also seen an 11% reduction over the past month, indicating waning trader interest. However, the expected altcoin season could see profits from Bitcoin being redirected into smaller cryptocurrencies, including AI tokens, possibly leading to a resurgence in their value. Additionally, technical traders are using fractal patterns to predict market trends, suggesting that the altcoin season might begin in the first quarter of 2025.
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This week's Crypto Biz highlights Bitcoin's monumental year, marking its 16th anniversary with significant mainstream adoption. The launch of 11 Bitcoin ETFs in January led to an influx of institutional investments, pushing Bitcoin's price to record highs. Institutional interest also surged in over-the-counter (OTC) markets, with Kraken reporting a 220% increase in OTC transactions. Beyond ETFs, companies like MicroStrategy have embraced Bitcoin as a treasury asset, with plans to expand their holdings significantly. Meanwhile, Crypto.com introduced a new custody service in the US, aiming to cater to institutional investors. Russia, on the other hand, has imposed a partial ban on crypto mining in several regions to manage energy consumption, while the IRS has clarified that staking rewards are taxable upon receipt, impacting how crypto earnings are treated in the US. These developments illustrate the evolving landscape of cryptocurrency, balancing between mainstream financial integration and regulatory adjustments.
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Galaxy Research has forecasted that while the US government will not purchase Bitcoin in 2025, it will continue to explore the idea of an expanded Bitcoin reserve policy. Currently, the US holds about 183,850 BTC, worth around $17.36 billion, across various known addresses. Wyoming Senator Cynthia Lummis has introduced the Bitcoin Act 2024, which, if passed, would allow the US to buy 200,000 BTC annually for five years, totaling 1 million BTC to be held for at least 20 years. This legislative move could set a precedent for other nations, potentially sparking a global competition to acquire Bitcoin. Galaxy analysts suggest that up to five Nasdaq 100 companies and several nation-states might also add Bitcoin to their reserves. However, countries like Japan are cautious, with Prime Minister Shigeru Ishiba indicating a lack of understanding regarding Bitcoin movements by other nations. Meanwhile, former Binance CEO Changpeng Zhao predicts that smaller countries might be the first to adopt Bitcoin reserves, although the process could be gradual.
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The article discusses the potential impact of a Donald Trump presidency on Ethereum's performance in the cryptocurrency market. Over the past 18 months, Ethereum has underperformed compared to Bitcoin and other layer-1 coins like Solana and Sui. However, experts believe that a Trump administration, known for its pro-crypto stance, could revitalize Ethereum. Key factors include the expected overhaul of the SEC, which could lead to more favorable regulations for Ethereum and DeFi projects. The Trump family's launch of World Liberty Financial on Ethereum further signals strong support for the blockchain. Additionally, there's anticipation around the possibility of adding Ethereum staking yields to ETFs, which could make ETH more attractive in a declining interest rate environment. The article also touches on the broader regulatory landscape, including the potential redefinition of crypto assets as commodities under CFTC oversight, which could benefit the crypto industry as a whole.
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The year 2024 has marked a significant shift in the cryptocurrency landscape, with institutional adoption becoming the dominant narrative. The U.S. approval of spot bitcoin ETFs has played a pivotal role, attracting $36 billion in net inflows and amassing over 1 million BTC. Bitcoin's value has surged by nearly 130%, nearing the psychological threshold of $100,000. Companies like MicroStrategy and KULR Technology have led the trend of adding Bitcoin to corporate treasuries, with KULR recently investing $21 million in BTC. Bitwise Asset Management has responded to this trend by applying for an ETF that tracks companies with significant Bitcoin holdings, while Strive Asset Management, co-founded by Vivek Ramaswamy, has filed for a Bitcoin Bond ETF. This ETF aims to provide exposure to Bitcoin through derivatives like MicroStrategy's convertible securities, highlighting the growing interest in Bitcoin as a hedge against inflation and geopolitical risks.
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The Floki decentralized autonomous organization (DAO) has recently passed a proposal with an overwhelming 99.9% approval to allocate liquidity for the creation of a Floki exchange-traded product (ETP). This initiative, which received 332.7 billion votes in support and zero opposition, aims to list the Floki ETP on the SIX Swiss Exchange in the first quarter of 2025. This move will make Floki the second memecoin, following Dogecoin, to offer an ETP on a regulated stock exchange, enhancing its legitimacy in the financial world. The proposal involves utilizing part of the 16.3 billion FLOKI tokens from the community buyback wallet, valued at approximately $2.8 million, to provide liquidity for the ETP. The remaining tokens will be burned to decrease the overall supply. This development comes at a time when Floki has seen a 400% gain since the beginning of 2024, despite recent market downturns. Additionally, Floki's recognition by the U.S. CFTC as a utility token, alongside its upcoming NFT-based metaverse game Valhalla, underscores its growing significance in the digital asset space.
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Do Kwon, the co-founder of Terraform Labs, is set to be extradited to the United States for prosecution, following a decision by Montenegro's Justice Ministry. This decision comes after a legal tug-of-war between the US and South Korea, both of which have sought Kwon's extradition due to his involvement in the $40 billion collapse of the TerraUSD stablecoin in 2022. Kwon was arrested in Montenegro for using a foreign passport. Although Montenegrin courts had previously favored extradition to South Korea, the latest ruling supports the US's request. The US has charged Kwon with fraud, and despite his preference for extradition to South Korea, his lawyer has not commented on the recent decision. Terraform Labs and Kwon have already been found liable for fraud in a civil case by the SEC, agreeing to a hefty $4.5 billion settlement. The exact timing of Kwon's handover to the US remains unspecified.
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Elisa Rossi has filed a lawsuit against Stephen Akridge, her former husband and a co-founder of the Solana blockchain platform, alleging that he misappropriated "millions of dollars" in income from her Solana token holdings. According to the complaint filed in San Francisco Superior Court, Akridge took advantage of Rossi's lesser understanding of cryptocurrencies to secretly claim her staking rewards, which are earnings from pledging crypto assets to validate blockchain transactions. The dispute emerged following their divorce filing in February 2023 after a decade of marriage. Rossi claims that from early March to mid-May, Akridge controlled the accounts and received all commissions on the SOL tokens allocated to her. The value of the tokens in question remains undisclosed in the lawsuit, with Rossi requesting confidentiality for certain details. Solana, once linked with the now-disgraced Sam Bankman-Fried, has seen a resurgence in value, making this legal battle over its tokens particularly noteworthy.
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The cryptocurrency market has been experiencing significant fluctuations, with Bitcoin dipping to $92K before rebounding to $96K, reflecting the inherent volatility of the sector. KULR Technology Group, known for its energy management solutions, has made a substantial investment in Bitcoin, purchasing 217.18 BTC for $21 million, signaling a strategic move towards cryptocurrency as part of its financial reserves. Meanwhile, BlackRock's iShares Bitcoin Trust ETF faced its largest single-day outflow, contrasting with the rising interest in Ethereum ETFs. In a political move, Donald Trump appointed Bo Hines to head a new council aimed at fostering the growth of digital assets in the U.S., indicating a potential shift in policy towards cryptocurrencies. Additionally, Vivek Ramaswamy's Strive Asset Management introduced a Bitcoin Bond ETF, betting on a more crypto-friendly regulatory environment under the Trump administration. These developments highlight the dynamic interplay between market trends, corporate strategies, and political influences in the cryptocurrency space.
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The article discusses the renewed interest in blockchain technology, particularly through the process of tokenization, which involves creating digital representations of real-world assets on a blockchain. Despite the excitement, the adoption rate remains low, with only 0.003% of global assets tokenized. The slow progress is attributed to an unfavorable regulatory environment in the U.S., which discouraged banks from engaging with crypto-related technologies. However, with a potential shift in regulatory stance under President-elect Donald Trump and initiatives from major financial institutions like BlackRock, there's a noticeable push towards embracing tokenization. Companies like Visa, Mastercard, and Tether are actively developing platforms to support this trend, aiming to enhance liquidity, reduce costs, and improve transaction times. However, there are concerns about the potential risks and the suitability of tokenizing certain assets, with critics arguing that it might lead to the distribution of low-quality assets to less sophisticated investors. Despite these challenges, the trend towards tokenization is seen as a significant evolution in financial markets, promising to unlock new business models and efficiencies.
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The year 2024 has seen a significant shift in the cryptocurrency landscape, primarily driven by institutional adoption. The U.S. approval of spot bitcoin ETFs has marked a pivotal moment, with these funds attracting $36 billion in net inflows and holding over 1 million BTC. Bitcoin's value has soared, nearly doubling and approaching the $100,000 mark. This trend of institutional interest is further evidenced by companies like KULR Technology, which has allocated a substantial portion of its cash reserves to Bitcoin. Additionally, Bitwise Asset Management is seeking to launch an ETF that would track companies with significant Bitcoin holdings, while Strive Asset Management, co-founded by Vivek Ramaswamy, has introduced a Bitcoin Bond ETF. These moves reflect a broader recognition of Bitcoin as a hedge against inflation and geopolitical risks, with Strive's CEO emphasizing the long-term investment benefits of Bitcoin exposure.
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Vitalik Buterin, co-founder of Ethereum, has embraced the role of "adoptive father" to Moo Deng, a five-month-old pygmy hippo at Khao Kheow Open Zoo in Thailand. His donation of 10 million Thai baht ($300,000) aims to enhance the zoo's facilities and establish a specialized habitat for pygmy hippos. This act of generosity was inspired by the warm reception Buterin received during the Ethereum developer conference in Thailand, reflecting his appreciation for the country. Moo Deng, known for her viral internet fame, has not only captured hearts but also inspired the creation of the MOODENG memecoin on the Solana blockchain, which saw a significant market cap before declining. Despite the memecoin's reduced value, Moo Deng's influence remains strong within Thailand, showcasing the unique intersection of cryptocurrency, internet culture, and wildlife conservation.
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The cryptocurrency market is bracing for potential volatility following the expiry of Bitcoin options contracts worth nearly $14.38 billion, which occurred at 3:00 a.m. ET. This event, representing 70% of the total Open Interest for BTC options, is one of the largest in history. The high Open Interest typically signals significant market participation and new capital inflow. The market sentiment appears bullish, with a put/call ratio of 0.61, indicating more traders are betting on price increases. Following this event, market observers like Sean McNulty from Arbelos Markets anticipate choppy market conditions. The next significant expiry date for traders to watch is January 31, with options worth $5.48 billion set to expire. This series of events underscores the growing influence of derivatives in the crypto market, potentially affecting Bitcoin's price movements in the near term.
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Montenegro's Justice Ministry has approved the extradition of Do Kwon, the founder of Terraform Labs, to the United States, following a complex legal battle involving both South Korea and the U.S. Do Kwon, known as "the cryptocurrency king," was arrested in Montenegro last year while attempting to flee to Dubai with a fake passport. The decision to extradite him to the U.S. was influenced by the latest ruling from Montenegro's Supreme Court, which found that legal conditions favored extradition to the U.S. over South Korea. Kwon's legal team in Montenegro expressed surprise at the decision, claiming they were not officially notified and arguing that previous court decisions had favored extradition to South Korea. Kwon faces allegations of fraud in the U.S. linked to the dramatic collapse of Terraform Labs' digital currencies, TerraUSD and Luna, which led to a loss of approximately $40 billion in market value, severely impacting retail investors globally.
