Tesla's Bitcoin Buy Speculation, BlockFi's Settlement with FTX, and Hut 8's Mining Facility Closure
Summary:
Speculations about Tesla buying more Bitcoin arose after Arkham Intelligence added the automaker's BTC wallet to their tracking feature. The tracking revealed an increase in BTC holdings from the last reported amount. Meanwhile, a settlement that could significantly cover BlockFi's debt was reached with FTX. Hut 8, a Bitcoin mining firm, announced the closure of its Drumheller facility due to increased energy costs and other issues. The BTC price achieved an unprecedented high before an upcoming halving event, despite the industry's challenging conditions.
Claims that Elon Musk might be expanding Tesla's Bitcoin collection emerged following the inclusion of the company's BTC wallet on Arkham Intelligence's dashboard. An agreement that may bring BlockFi significantly closer to complete debt recovery has been reached with FTX. Hut 8, a Bitcoin mining corporation, has declared the permanent shutdown of its site in Drumheller, Canada, due to challenging conditions in the industry.
Tesla's Bitcoin stocks are once again under scrutiny in the crypto world following Arkham Intelligence's integration of a tracking feature for Tesla's Bitcoin wallet on its dashboard. Presently, Tesla's wallet boasts approximately 11,509 BTC, that is, 1,789 more than the 9,720 BTC stated in its most recent earnings report.
Tesla, directed by Elon Musk, purchased $1.5 billion in Bitcoin in February 2021, around the height of the previous bull run, and also declared intent to accept Bitcoin for vehicle purchases. However, this adoption was short-lived, with the company first offloading about 10% of its holdings in March 2021. In the second quarter of 2022, Tesla sold off nearly 75% of its Bitcoin holdings. Some suspect the firm might be purchasing more Bitcoin and plan to disclose this during their next earnings call. Others suspect an accounting mistake.
BlockFi and FTX, two bankrupt crypto companies have reached a basic agreement to settle their disputes, resulting in FTX paying around $874.5 million to BlockFi and dismissing its claims against the company, according to a court filing on March 6.
US Bankruptcy Judge John Dorsey, located in Wilmington, Delaware, will review the settlement terms.
The settlement will resolve BlockFi's billion-dollar claims against FTX. Furthermore, FTX will forfeit "millions of dollars worth of avoidance claims and counterclaims" against BlockFi.
The $874.5 million total comprises of a $185.2 million claim against FTX.com, equivalent to the value of BlockFi customer assets held on the exchange, and a $689.3 million claim against Alameda Research for loans it received from BlockFi.
Bitcoin miner Hut 8 is shutting down an operation in Alberta, Canada, as power interruptions and escalating energy costs are proving overwhelming. On March 6, the United States-based miner confirmed the immediate closure of its Drumheller, Alberta mining facility. The site was responsible for roughly 1.4% of the company's BTC. Still, the operation accounted for about 11% of its hash rate, which couldn't continue in the long run.
"Following a deep analysis, we've recognized that numerous factors, including increased energy costs and underlying voltage issues, have notably affected the Drumheller's profitability," Asher Genoot, CEO of Hut 8, announced in a statement posted on March 6, 2024.
Rising energy costs, unprecedented mining challenges, and the approaching Bitcoin halving, which will automatically reduce block rewards by 50%, pose significant challenges to the Bitcoin mining industry. For the first time in Bitcoin's existence, the BTC price reached a record high before the halving event. On March 5, the leading digital currency soared over $69,300 before experiencing a decline.
This article contains no investment advice or suggestions. All investment and trading maneuvers carry risk. We therefore suggest that readers conduct their own research before making any decisions.
Contributors: Geraint Price, Sam Bourgi, and Felix Ng.
Published At
3/7/2024 4:00:50 PM
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