Bitcoin Surges Past $45K, Aiming for New Highs Amid ETF Anticipation; Kyrgyzstan’s Cryptocurrency Mining Tax Revenue Shows Growth in 2023; Cross-Chain Orbit Bridge Faces $82 Million Exploit, Shaking Orbit Chain Protocol
BTC Hits Its Highest Level in Almost Two Years Ahead of Expected Spot ETF Approval
Bitcoin has broken through the $45,000 mark for the first time in almost two years, reaching a new yearly high as the market anticipates the potential approval of a spot Bitcoin exchange-traded fund (ETF).
Starting the year at $42,000, Bitcoin has surged over 6% in the last 24 hours and an impressive 170% over the past year, marking a substantial new yearly peak within the first two days of 2024.
This surge in Bitcoin’s price aligns with the market’s expectation for the SEC to approve one or more of the 14 pending applications for a spot Bitcoin ETF. The last time Bitcoin traded above $45,000 was in April 2022, followed by a prolonged bear market.
While opinions differ on the short-term impact of an ETF approval, some analysts believe Bitcoin won’t experience a significant rally on the approval day due to decreasing implied volatility. Others, like Scott Melkor, anticipate positive movement, suggesting that Bitcoin could reach $54,000 in the days following the potential SEC approval.
VanEck advisor Gabor Gurbacs predicts that the initial days of a spot Bitcoin ETF might not meet broader market expectations but foresees these products attracting trillions of dollars in inflows over the next few years.
Kyrgyzstan’s Cryptocurrency Mining Tax Revenue Shows Growth in 2023
In the first 11 months of 2023, the Kyrgyzstan government saw a notable surge in tax revenue from cryptocurrency miners, collecting 78.6 million soms (approximately $883,000), a substantial rise compared to the same period in 2022. The tax revenue experienced volatility throughout the year, ranging from 738,000 soms ($8,284) in February to a peak of 11.6 million soms ($130,212) in August. By November, the last reported month, receipts stabilized at 7.6 million soms ($85,767).
Government Collects Almost $883,000 in Taxes from Miners, Marking a Significant Increase
Kyrgyzstan, rich in water resources, particularly hydropower, has become a destination for cryptocurrency miners seeking sustainable energy. The tax rate is set at 10% of the cost of electricity, which includes value-added and sales taxes. Despite some challenges, including low dam fill levels and delivery limitations, the cryptocurrency mining industry in Kyrgyzstan continues to grow, with one official mining company currently in operation.
In a move to further harness the country’s hydropower potential, Kyrgyz President Sadyr Japarov approved the construction of a cryptocurrency mining facility at the Kambar-Ata-2 Hydro Power Plant in July 2023. Although crypto mining faced obstacles due to energy-related issues, including the need for power imports, the industry consumed 17 million KWh of electricity by October 2023. The government has positioned itself to benefit from this growing sector, charging crypto miners a rate five times higher than the public. While cryptocurrency exchanges are legal in Kyrgyzstan, the circulation of cryptocurrency remains unregulated.
Cross-Chain Orbit Bridge Faces $82 Million Exploit, Shaking Orbit Chain Protocol
In a major security breach, hackers have reportedly exploited Orbit Bridge, the bridging service associated with the cross-chain protocol Orbit Chain, making off with a staggering $82 million. The exploit came to light when a pseudonymous Twitter user, Kgjr, highlighted significant outflows from the Orbit Chain Bridge protocol. Blockchain security firms, including Officer CIA and Cyvers, have also reported on the incident.
Hackers Exploit Bridging Service, Draining $82 Million from Orbit Chain
According to data from blockchain analytics platform Arkham Intelligence, the hackers executed five separate transactions, resulting in a total haul of $81.68 million. The stolen funds include $30 million in Tether (USDT), $10 million in USD Coin (USDC), $21.7 million in Ether (ETH), $9.8 million in Wrapped Bitcoin (WBTC), and $10 million in Dai (DAI). The illicitly obtained funds were transferred to new wallets.
Orbit Chain, a multi-asset blockchain launched in South Korea in 2018, specializes in facilitating cross-chain transfers between different decentralized networks. It is particularly known for transferring assets between Ethereum Virtual Machine-compatible networks and Klaytn. Klaytn’s block explorer data indicates that eight of the largest assets on the Klaytn network by total market capitalization are wrapped assets on the Orbit Bridge.
The security incident raises concerns about the vulnerabilities in cross-chain bridging protocols, and the impact on Orbit Chain’s reputation remains to be seen. The Orbit Chain protocol has strong ties to the Klaytn network, a modular layer-1 blockchain.
It’s important to note that Orbit Chain is distinct from another cross-chain bridging protocol called Orbiter Finance, despite the similarity in names. The exploit highlights the ongoing challenges and risks associated with security in the decentralized finance (DeFi) space.
