BTC Halving Brings Market Optimism and Record Mining Rewards, Crypto Lobbyists Sue SEC

Takeaways

• Bitcoin miners see rewards cut, Dorsey jumps in: BTC miners collected more than $100 million in revenue for the halving on April 20, the highest total ever recorded in a single day. But now miners face a drop in block rewards that could reshape the industry. And one familiar name is jumping in.
• Speculators hopeful upcoming Fed meeting will leave rates unchanged: US inflation rates have eased slightly in April in conjunction with weakening demand in both manufacturing and service sectors. Meanwhile, crypto bulls hope the Fed holds interest rates steady.
• Bitcoin halving brings fresh interest to spot ETFs: After a period of net outflows prior to BTC’s halving event, spot BTC ETFs in the US have started to rebound.
• Ripple calls for SEC to reduce fine: Ripple has strongly opposed the SEC's proposed $2B fine for selling its XRP token, and a contingent of crypto lobbyists have moved to sue the regulator for expanding the definition of a dealer.
• Tether claims it will freeze addresses linked to OFAC-sanctioned entities: Venezuela's state oil company, PDVSA, used the USDT stablecoin to bypass US sanctions and continue its oil exports, according to a Reuters report. Now, Tether will be freezing accounts linked to the sanctioned entities.

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BTC Miners Pull in Record Revenue, Dorsey To Step In

BTC miners collected $107.7 million in revenue during the halving last Friday via mining rewards and transaction fees, shattering a previous single-day record of $78.7 million set March 11-two days before BTC hit an all-time high.

While analysts predict the price of BTC will continue to rally, the future remains cloudy for the mining industry, which saw rewards cut by 50% to 3.125 bitcoin.

Block CEO and ex-Twitter/X CEO Jack Dorsey figures it’s a good time to jump in. In a blog post published Tuesday, Dorsey announced that Block, a fintech payments giant, had completed its three-nanometer BTC mining chip and is developing a full BTC mining system.

The goal? Decentralize the BTC mining market, lessening the barrier to entry for miners dependent on hardware.

“Building on these insights and pursuant to our goal of supporting mining decentralization, we plan to offer both a standalone mining chip as well as a full mining system of our own design,” Dorsey wrote.

US Inflation Shows Hopeful Signs of Cooling Ahead of Fed Meeting

US business activity hit a four-month low in April, reflecting weakened demand across manufacturing and service sectors. The S&P Global's flash U.S. Composite PMI Output Index dropped to 50.9 in April from 52.1 in March.

The Federal Reserve has raised interest rates by 525 basis points since March 2022, putting downward pressure on BTC prices as investors’ risk-appetite waned. But the Fed has opted to hold rates steady between 5.25% and 5.5% since July 2023, and the price of BTC has more than doubled over the ensuing months.

While inflation pressures persist, speculators are hopeful that Fed officials during their meeting next week will hold rates steady and sound a bullish tone on future cuts.

Inflows to BTC Spot ETFs See Rebound

After experiencing net outflows before BTC’s block-reward halving, spot BTC ETFs in the US resumed net inflows, with significant activity observed the day after the halving. On Monday, more than $62M of inflows were recorded–primarily to Fidelity Wise Origin Bitcoin.

Other spot ETF providers enjoying the post-halving surge include ARK 21 Shares Bitcoin ETF and iShares Bitcoin Trust. Net inflows for US spot BTC ETFs now sit at an impressive $12.38B and could rise further if the speculated post-halving surge in BTC price occurs.

The halving has already brought some upward movement to BTC price after it dropped by more than 6% in the week leading up to the event. The price of BTC rallied to $67K by Tuesday and, even after dipping, was up roughly 2% over the past seven days.

Ripple Hits Back Against Proposed SEC Fine

Ripple has responded to a nearly $2B fine proposed by the SEC, criticizing the regulatory agency for an attempt to “intimidate” and punish the broader cryptocurrency industry. Ripple's legal team argues that the SEC's actions are misleading and not a faithful application to the law, referencing court cases where other crypto companies prevailed against the SEC.

The SEC has claimed that Ripple made billions of dollars by selling its XRP token, which it considers a security. This legal battle, part of an ongoing saga that began in 2020, continues to shape discussions around cryptocurrency regulation and enforcement.

In related news, the Blockchain Association and Crypto Freedom Alliance of Texas filed suit against the SEC in a Texas court Tuesday, alleging the agency erred when it expanded the definition of a dealer in February.

Tether Says It Will Freeze OFAC-Sanctioned Addresses Linked to Venezuelan Oil

Tether, the issuer of the USDT stablecoin, has announced it will freeze addresses linked to entities sanctioned by the Office of Foreign Assets Control (OFAC) following a Reuters report claiming that Venezuela’s state oil company, PDVSA, used cryptocurrencies to circumvent US sanctions.

The report highlighted PDVSA's attempt to shift oil sales to USDT to avoid restrictions on its foreign bank accounts. The US Treasury Department had mandated that PDVSA and vendors wind down transactions by May 31 after Venezuela president Nicolas Maduro backtracked on proposed democratic electoral reforms.

-From the Gemini Trading Desk