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Australia Bitcoin Crypto News Ransomware

Australian Retail Companies Hit by Bitcoin Ransomware Attack

The massive supply-chain ransomware attack on software provider Kaseya last week also affected retail companies in Australia. The Australian federal government’s Cyber Security Centre (ACSC) made this known in a report on 6 July, saying it’s working with the affected companies to ascertain the extent of the impact and possible mitigation measures. 

REvil Ransomware Attack on Kaseya

On 5 July, the notorious Russian ransomware gang Sodinokibi, also known as REvil“, pulled a large-scale supply-chain attack on Kaseya VSC. More than 1,000 businesses that use Kaseya’s IT solutions in countries including Australia, the US and South Africa were affected by the incident. 

The cybercrime gang reportedly took advantage of a zero-day vulnerability on Kaseya’s VSC software to infect the chain of businesses on the network. Prior to the attack, the Dutch Institute for Vulnerability Disclosure (DIVD) alerted Kaseya but the IT solutions provider wasn’t quick enough to patch the flaw. 

The REvil gang launched the attack while DIVD was still in the process of fixing the problem. Consequently, several companies linked to the Kaseya VSC network were locked out of their data via encryption.

The REvil group demanded about AS$92 million (US$70 million) to release the global decrypter for the data. 

Potential Impact on Aussie Retailers 

Several Australian retail businesses linked to the compromised network were also hit by the attack. 

There is a lot of chatter among incident responders in Australia that there are impacted businesses here.

Josh Lemon, Managing Director of Digital Forensics and Incident Response, Ankura

Although the ACSC and the FBI are jointly investigating the extent of the attack and viable mitigation advice, Aussie retailers are advised to shut down Kaseya servers until further notice. ACSC also recommended activating Multi-Factor Authentication (MFA) as an extra layer of security.

REvil’s latest attack comes weeks after receiving a Bitcoin ransom demand worth about US$11 million from the world’s largest meat producer, JBS SA. Last year, Australian non-profit organisation Anglicare Sydney also suffered a ransomware attack in which 17 gigabytes of data were stolen. 

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Bitcoin Crypto News Trading

Bitcoin Trading Volume Dries Out as US Celebrates Independence Day

There have been fewer trading activities for Bitcoin (BTC) over the past few days. On-chain data shows that spot trading volume had been dropping towards the US Independence holiday. At the same time, Bitcoin inflows and outflows have declined, which suggests low transactions from whales.

Low Bitcoin Activity During US Holiday

Over the weekend, Bitcoin trading volume dropped significantly as there was also low exchange inflow and outflow activity. Recent data from Glassnode shows that only US$5.8 billion worth of BTC flowed into exchanges over the weekend, while US$6.4 billion was moved out within the same period, which accounted for a net flow of -US$593.1 million.

BTC spot volume has been trending downwards since 29 June; however, it took a more noticeable drop on 2 July. Many people believed the US Independence holiday was one factor that caused the low trading activity, as most traders in the US may have taken time off the market.

However, according to a crypto on-chain analytics platform CryptoQuant, it seems like the whales are staying low without much actions” .

Bitcoin is at Key Level

At this current state, Bitcoin will likely be in consolidation, however buying pressure could mount well enough to keep price trending upward. 

A push to either side of the market would have a high possibility of triggering a relatively big reaction to the price.

CryptoQuant

Bitcoin was down by 3.89 percent over the last 24 hours to US$34,050 at the time of writing. Some indicators, including the Puell Multiple, show it will recover from the bear market soon. 

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Bitcoin Crypto News Investing Market Analysis

Experts Predict Bitcoin Will Fall to $25,000 When Grayscale BTC Trust Unlocks In Two Weeks

In a newsletter sent out to clients, US bank JPMorgan has predicted that Bitcoin could fall to US$25,000. The situation could be brought on by the expiry of 16,000 GBTC held in a six-month lock-up period by the world’s largest cryptocurrency fund.

How Can the Grayscale Fund Impact the Price of Bitcoin?

On 18 July, the lock-up period for a total of 16,000 Bitcoin (BTC) is set to expire. This could encourage investors who entered six months ago at a lower Bitcoin price and are now sitting on some potential profits to sell their BTC instead of continuing to hold it.

Some analysts, including strategists at JPMorgan, believe that accredited investors will sell at least a portion of their GBTC holdings after the unlocking period, thus weighing further on the ongoing Bitcoin market downtrend. A selloff of 16,000 BTC, worth roughly US$540 million, could create even more pressure on the downside.

While weak flows and price momentum resulting from last month’s selloff have fuelled Bitcoin’s recent declines, potential sales of shares in the Grayscale Bitcoin Trust following the expiration of a six-month lock-up period could be an additional headwind.

Nikolaos Panigirtzoglou, a Managing Director at JP Morgan

According to JPMorgan, the trust saw record inflows of US$2 billion in December 2020, followed by $1.7 billion in January. Globally, trust funds have billions locked up in Bitcoin.

How Does It Work?

In arbitrage trade, institutional investors (like hedge funds) borrow Bitcoin to purchase GBTC shares. Then, after the lock-up expires, these investors sell GBTC shares to secondary markets (retail investors), typically for a premium. Then they return the borrowed Bitcoin to their lenders and pocket the difference.

Each share represents 0.00094716 BTC, with the share tracking Bitcoin’s market price. It has a minimum holding period of six months and a minimum investment requirement of $50,000.

Rising GBTC premium shows a higher inflow of Bitcoin into the trust, while a decreasing premium indicates a declining BTC inflow and a transition into discounted premiums. If premiums are discounted, the seller would take a financial loss because the above-mentioned difference is gone.

GBTC shares traded at a premium of 40 percent or more to the spot Bitcoin price (current price in the market). So for the big investors it looked like a sure-fire way to profit, especially with such bullish market sentiment. There was little fear of the premium falling sharply.

Money flowing into Grayscale Bitcoin Trust as its premium flips negative.
Source: Skew

However, in the second quarter the Bitcoin market has been in a backslide, and in February the GBTC premium flipped to a discount, leaving little motivation for new investors to attempt the once-popular trade. As of early July, GBTC shares traded at a discount of 10.5 percent, according to data provided by Skew. 

Others Have a More Positive Narrative

Some think it is premature to consider the potential consequences of this event. Nevertheless, other analysts believe it will flush sellers from the market in July, possibly creating bullish potential.

In contrast with what JPMorgan is saying, some digital-asset analysts and investors claim it’s possible some of these investors might need to enter the market to buy Bitcoin again to repay cryptocurrency loans they used to finance their original purchases of the GBTC shares. The negative impact of the GBTC selloff may be balanced by the repurchases of Bitcoin in the spot market.

Additionally, those who deposit their Bitcoin holdings need to buy back coins to return to their base portfolio. 

Since the beginning of the year, analysts have been forecasting a Bitcoin price of $146,000 in the long run. This may also cause some investors to hold.

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Bitcoin Crypto News Market Analysis Markets

Whales Bought 60,000 BTC Over the Weekend Worth $2.7 Billion

After recent record losses, Bitcoin (BTC) HODLers enjoyed gains over the weekend for the first time in weeks as the digital asset surged over 5 percent overnight. This was largely attributed to the influx of Bitcoin whales holding 100 to 10,000 Bitcoin accumulating over 60,000 coins in a single day, worth US$2.7 billion.

Bullish Signs as Bitcoin Whales Steadily Accumulate

On-chain analyst and trader Willy Woo had a humorous take on the aggressive whale accumulation, tweeting:

According to on-chain analysts Santiment, these addresses now hold 9.12 million coins combined, up over 100,000 from only six weeks ago.

The total number of coins held by whale entities – addresses controlled by a single network participant holding 1,000 to 10,000 Bitcoin – rose by over 80,000 to 4.216 million Bitcoin on 2 July, hitting the highest level since May. For context, this remains some way below the record high of 4.542 million reached in February.

Source: Glassnode

The number of whale entities has now jumped to a three-week high of 1,922, which read together with signs that Bitcoin may have bottomed out, offers bullish support.

Whale Accumulation Coincided with Largest Downward Bitcoin Mining Difficulty Adjustment in History

Source: Glassnode

Interestingly, this recent whale accumulation coincided perfectly with the largest negative difficulty adjustment (-28 percent) in the history of the Bitcoin network.

In short, the difficulty adjustment refers to the difficulty of mining Bitcoin and is linked to the hashpower. As hashpower is removed, the difficulty decreases and where hashpower increases, difficulty is increased. The record 28 percent reduction in the difficulty adjustment was a direct consequence of China banning Bitcoin mining.

Most, however, view the mining ban in a positive light. As hashrate migrates out of China, the network becomes more decentralised and given the network’s response to the recent negative difficulty adjustment, it appears as resilient as ever.

At the moment, whales appear bullish. Historically, this tends to provide evidence of a broader shift in sentiment. It remains to be seen whether this trend will continue in the coming months.

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Australia Bitcoin Crime Scams

Australian Bitcoin Romance Scam Victim Melanie Kilgour Sentenced to Six Months in Jail plus Community Service

Australian schoolteacher Melanie Kilgour, who became the victim of an online Bitcoin romance scam after misappropriating funds from her former employer in 2019, has been sentenced to six months’ imprisonment after pleading guilty to fraud charges.

She is also subject to a two-year community corrections order, which includes 150 hours of unpaid community service, and was ordered to repay A$148,908.85 in restitution to her former employer, the Alexandra Community Hub in north-eastern Victoria.

Ms Kilgour pleaded guilty in March this year to charges of defrauding the ACH via multiple transactions. It was alleged that $50,000 was lent to a friend who failed to pay her back, and that an undisclosed sum was spent on repairs to Ms Kilgour’s house.

The court was told that the remainder of the funds had been sent in Bitcoin to an “overseas lover” in an apparent romance scam. The scammer cashed out the amount and later disappeared.

The fraud was detected when it was found Ms Kilgour had forged the signature of ACH director John Cannon.

Kilgour Gives Her Side of the Story

“I am gutted and extraordinarily remorseful for my actions in 2019,” Ms Kilgour wrote in a letter emailed to Crypto News Australia ahead of her sentencing on 1 July in the Victorian County Court. “I seem to have successfully smashed 30 years of achievements in a [relatively] short period of time. This has affected my mental health and put added pressure on my beloved parents, siblings, friends and colleagues, so I find it hard to forgive myself and [I] can never forget.”

Ms Kilgour was dealing with both her parents’ cancer illnesses, an abusive ex-husband, and an unscrupulous builder who was renovating her house when she found herself in a “lonely and vulnerable” position.

I have worked very hard all my life. I understand that one in four women fall victim to romance scams by people who prey on the lonely. Along with losing all of my own savings, I then took money from my employer, to my shame and horror, with no real understanding of the total amounts. My mental health at the time made me feel suicidal.

Melanie Kilgour

Forced To Step Down From New Job

Ms Kilgour found new employment in 2020 at Greater Shepparton Secondary College, also in rural Victoria, but fallout from her court appearance and subsequent negative publicity forced her to step down from the position.

I had never committed a crime before this time or re-offended since, and never will because I have to keep going to support my children and do what’s best for my family. I have suffered greatly and sacrificed a lot to do the right thing since I took the money. I just want the opportunity to be able to keep working hard to pay back my debt to society … with hope of a better future.

Melanie Kilgour

Australians lost over $850 million to scams in 2020, according to a report last month from the Australian Competition and Consumer Commission (ACCC). The Securities and Investment Commission (ASIC) also reported that in just three months last year (March-May), the rate of online romance scams involving cryptocurrency increased by 20 percent.

Please spend some time to learn about the Bitcoin scams going around and how to avoid becoming a victim.

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Banking Bitcoin Crypto News Institutions

NYDIG is Expanding Crypto Adoption to 650 Banks and Credit Unions in the US

New York Digital Investment Group (NYDIG) has partnered with payment giant NCR to expand Bitcoin adoption in the US.

The partnership will enable up to 650 banks to offer Bitcoin services to 24 million customers. While the NCR will provide the infrastructure for mobile apps, the NYDIG will be delivering custodial services to financial institutions that want to offer crypto services to their clients.

Banks to Compete with Crypto Exchanges

The move will put NCR’s institutional clients in direct competition with crypto exchanges, as banks and credit unions reported massive outflows of customer’s savings to make crypto purchases.

According to Douglas Brown, NCR’s president of digital banking, banks could soon follow PayPal’s success with crypto adoption and offer crypto payments for its clients worldwide. Besides, the NCR is exploring the possibility of paying its 200,000 retail clients with BTC.

We’re firm believers in the benefits of crypto and the strategic application. And that’s true for our banking relationships, as evidenced by NYDIG, and across retailers as well as restaurants and the like.

NCR president of digital banking, Douglas Brown

Despite the bearish market, NYDIG has seen massive interest from institutional clients to individual and wealthy investors who want to join the crypto space.

Just days ago, NYDIG partnered with Texas fintech firm Q2 to provide BTC exposure to Q2’s 18.3 million users, following massive client demand.

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Bitcoin Crypto News Institutions Regulation

Up to $435 Billion Could Flow into Crypto as New Legislation is Approved in Germany

Updated regulations around crypto investments in Germany could lead to a US$435 billion inflow to the crypto economy from German institutional funds.

The new Fund Location Act (Fondsstandortgesetz) comes into play from July 1, pending a final decision by the German Bundesrat (Federal Council).

Big Investment Managers Can Now Invest 20% in Crypto

The new act allows existing German special funds (Spezialfonds) to invest up to 20 percent of their portfolios in Bitcoin (BTC) and Ethereum (ETH). Before this new regulation was passed, these funds were prohibited to invest in crypto.

Spezialfonds are considered the German institutional fund vehicle of choice for most liquid asset classes, and for property within distinct structures.

Jacqueline Winter, Blockchain Capital
blocksize-capital

Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC), said there could be a theoretical inflow potential for crypto assets in the order of US$435 billion.

This won’t happen overnight, but we are talking about the largest investment vehicle that we have in Germany – literally all the money is in there.

Sven Hildebrandt, Distributed Ledger Consulting

This amounts to around 20 percent of the estimated assets under management of these wealth and institutional investment fund managers. Their 4,000 open-end domestic special funds currently have an estimated €1.87 trillion tied up, some of which could flow into crypto. This legislation being passed by one of the economic powerhouses of the world could spell good news for wider institutional acceptance.

Coinbase Crypto Services Approved in Germany

According to a report, Coinbase has recently secured a Federal Financial Supervisory Authority (BaFin) licence to conduct business in Germany.

The Nasdaq-listed company holds the first licence issued by BaFin for crypto custody and trading, which is now legally seen as a financial service in Germany.

In an attempt to combat money laundering and fraud, the German government has issued new regulations that require a licence to deal with digital assets. Coinbase can now legally conduct business in Germany and Japan and could open the doors for new investors.

Coinbase Germany will launch in coming weeks to serve both new and existing German customers more effectively, including by localising our service and increasing our product offering.

Coinbase Germany press release

Will we see the German giants put up a fight against the various other institutional powerhouses across the globe? Watch this space …

Categories
Bitcoin Bitcoin Mining Crypto News Mining

25+ Bitcoin Mining Companies Join Forces To Make Bitcoin Greener

More than 25 Bitcoin mining companies have joined forces to make Bitcoin greener thanks to the Bitcoin Mining Council (BMC), founded by MicroStrategy CEO Michael Saylor and backed by high-profile members including Galaxy Digital and Hive Blockchain.

In its first voluntary survey, the BMC has revealed information about Bitcoin’s sustainable energy use from over 32 percent of the current global Bitcoin network. The results show that the global mining sector uses electricity with a 67 percent sustainable power mix, representing a 56 percent growth spurt during Q2 2021.

The results of this survey show that the members of the BMC and participants in the survey are currently utilising electricity with a 67 percent sustainable power mix. Based on this data, it is estimated that the global mining industry’s sustainable electricity mix had grown to approximately 56 percent during Q2 2021, making it one of the most sustainable industries globally.

BMC report

An Attempt to Demystify the Bitcoin Mining Industry

Bitcoin’s energy usage has been the primary topic for its detractors, highlighting environmental concerns in the long term. A new wave of criticism came with Elon Musk’s decision to reverse bitcoin payments for Tesla vehicles, causing the price of Bitcoin to drop even further. 

However, recent investigations have shown that banks and gold consume more energy than Bitcoin, and most miners are moving to clean power using hydrothermal and geothermal wasted energy in countries such as Iceland and Norway. 

A recent example of clean, renewable energy is El Salvador’s plan to build a huge mining operation using its geothermal excess.

Some Pundits Are Not Convinced

It seems this report is backed by the BMC’s own analysis, assumptions and methodologies, and the validity of the data appears unclear as most responses were from a subset of the network.

During a live virtual briefing, Nic Carter, a general partner of Castle Island Ventures, asked Saylor how the Council came to these figures. Saylor said the report was based on an estimate of off-grid and unsustainable power.

Then we allocated another portion that we applied to our BMC sample in order to get a blend. The blend ended up being slightly more than the electricity grid.

I think if you back into it and take the 56 percent and then look at the 67 or 68 percent that we don’t have, that’s the out-of-sample and then you know that number is … 50 percent sustainable … so … generally it works out that the out-of-sample mix is … assumed to be about 50 percent sustainable power and we tested that with a variety of analysts.

Michael Saylor on Bitcoin’s Sustainable Energy Mix

But some people were not convinced, knowing that the responses were from mostly mining companies that worked together to “provide critical information to the general public”.

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Bitcoin Crypto News Market Analysis Markets

Amid Unprecedented FUD, Strong Signals Emerge that Bitcoin May Have Bottomed

Despite Bitcoin’s breakout performance in 2020, much of the gains have been erased over the past three months as Bitcoin slid 43 percent amid a barrage of relentless FUD relating to China and environmental concerns.

While the grounds for such concerns can be challenged, there is mounting evidence that Bitcoin may be turning the corner.

A Difficult Bull Market for HODLers

Based on Bitcoin’s halving cycle and subsequent price movements, we ought to be somewhere near the middle of a bull market. Given that Q2 2021’s performance was the worst in eight years, even the most bullish of HODLers have had their conviction tested in the face of persistent, and seemingly coordinated, FUD.

Four Reasons for HODLers to be Optimistic

Throughout this latest round of FUD, Bitcoin has been enormously volatile, with ongoing support seemingly around the US$30,000 mark. However, a number of indicators suggest this may indeed be the bottom and that there is cause for optimism in the near term.

#1 Puell Multiple Signals Only 5th Buying Opportunity in Bitcoin’s History

This metric explores market cycles from a mining revenue perspective by looking at the supply side of Bitcoin’s economy – Bitcoin miners and their revenue. Miners are considered sellers by necessity since their operating costs tend to be fixed in fiat terms. When the value of Bitcoin mined and entering the ecosystem is too large or too small by historical standards, it can provide an opportunity for investors.

Notice below how the indicator has slipped into the green, last seen in March 2020. For long-term HODLers, now seems to be the time to accumulate.

The Puell Multiple, Source: lookintobitcoin.com

#2 Long-Term HODLers Continue to Accumulate

As Crypto News Australia reported earlier this year, long-term HODLers tend to be sellers when a market top is near and buyers when there are material price dips. Over long periods, this has proven to be a solid investment strategy.

As short-term HODLers capitulated in droves during May and June, long-term HODLers continued to accumulate, as highlighted in the chart below.

Source: Glassnode

#3 Funding Rates Shifting Away from Negative Territory

Funding rates are payments between traders to make the perpetual futures contract price close to the index price, representing the sentiment of traders on the positions they take in the perpetual swaps market. In the simplest of terms, positive funding rates are indicative of bullish sentiment whereas negative funding rates imply many traders are bearish.

Based on the chart below, funding is gradually moving into positive territory, a historically optimistic indicator for short- to medium-term price movements.

Source: CryptoQuant

#4 Bitcoin NVT Ratio Shows Bitcoin is Undervalued

The Bitcoin NVT ratio is equivalent to a traditional price-to-earnings ratio used to assess whether a stock is under- or overvalued.

Based on the chart below by respected Bitcoin analyst Willy Woo, the current price of Bitcoin is operating along the lower bounds of undervalued (marked by the green dotted line). The upper bounds (i.e a strong sell indicator) is the red dotted line, indicating Bitcoin would be overvalued at around US$121,000.


Source: woobull.com

When in Doubt, Zoom Out

If you entered the Bitcoin market for the first time in the past six months, this most recent correction would undoubtedly have been difficult to stomach. That said, it is worth remembering that anyone who has invested in Bitcoin for a period of greater than 3.25 years has made money.

The strategy employed by successful accumulators has been remarkably simple – don’t use leverage, dollar-cost average, and have a long-term horizon of four or more years.

Bitcoin’s logarithmic price chart clearly demonstrates that long-term holders tend to be rewarded. Short-term price volatility, however, is the price they have to pay to enjoy exceptional long-term returns.

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Bitcoin Crypto News Markets

Panic Selling Caused Record Bitcoin Weekly Losses of US$3.4 Billion

Up to US$3.4 billion in realised losses in Bitcoin were recorded last week, according to on-chain data by Glassnode. This is the highest capitulation ever recorded in the history of Bitcoin. 

Realised Losses Spike as Investor Uncertainty Rages

Losses in Bitcoin are realised when bitcoin bought at a higher price is spent or sold at a lower price. Last week’s panic selling indicates a high level of uncertainty in the market, especially among short-term holders. 

About 23.5% of Bitcoin in circulation is held by short-term holders and according to Glassnode, the majority is underwater (unrealised loss). This shows why the selling pressure is higher among short-term holders than long-term holders, most of whom are still in profit.  

Source: Glassnode

Despite that, some long-term holders sold during the week, their spending offset about US$383 million from the total realised loss of $3.833 billion in Bitcoin to US$3.45 billion. This is because most of them sold for a profit. Only 2.44% of Bitcoin’s circulating supply held by long-term holders is underwater.

Bullish Factors For Bitcoin

Bitcoin was trading at US$34,905 on 1 July and was down only about 4.18% over the previous 24 hours. Judging by Bitcoin’s market performance, this past month and the whole of Q2 were not exactly favourable for Bitcoin in terms of value. However, there have been a lot of indicators to suggest Bitcoin has not yet reached the top of the bull cycle.

On 29 June, the Puell Multiple signalled only the fifth buying opportunity in Bitcoin’s history. Crypto News Australia has also reported on the growing stablecoin reserves across all exchanges and the increasing rate of Bitcoin accumulation by long-term holders.