UAE emerges as bitcoin mining destination, and more

1. United Arab Emirates Emerges as a Growing Bitcoin Mining Destination in the Middle East

The United Arab Emirates (UAE) is steadily establishing itself as a prominent Bitcoin mining destination in the Middle East, garnering attention from crypto-focused companies. With more than 30 free trade zones and a growing contribution to the Bitcoin mining hash rate, the UAE is positioning itself as a pro-Web3 hub for such enterprises.

The UAE’s mining endeavors took off when Bitcoin miner Marathon Digital partnered with Zero Two, the digital asset arm of Abu Dhabi’s sovereign wealth fund, in May. This joint venture led to the establishment of two mining sites in Abu Dhabi, boasting a combined capacity of 250 megawatts (MW).

Abu Dhabi has emerged as a thriving center for various types of crypto mining activities within the UAE, thanks to its energy efficiency and status as the country’s trade hub.

According to data from Hashrate Index, the UAE currently possesses a combined Bitcoin mining capacity of around 400 MW, accounting for approximately 4% of Bitcoin’s global hash rate. While countries like the United States, China, Russia, and Kazakhstan currently hold the top positions in terms of the largest share of Bitcoin’s global hash rate, the UAE has the potential to climb up the ladder gradually due to its available resources.

2. HIVE Blockchain Crypto Production Falls in June to 259 BTC

HIVE Blockchain Technologies Ltd., a publicly-listed company in the cryptocurrency mining industry, has unveiled its unaudited Bitcoin (BTC) production statistics for June 2023. The firm has mined 259 Bitcoin, leaving its current crypto balance at approximately 1,957 as of 1 July.

HIVE’s Bitcoin mining capacity averaged over 3.3 Exahash (EH/s) in June, including ASIC and GPU hash rate. In June, HIVE produced 259 Bitcoin from both ASIC and GPU mining operations, averaging 76.6 Bitcoin per Exahash with an average hash rate of 3.38 EH/s. The company produced an average of 8.6 BTC per day, ending the month with a 3.48 EH/s mining capacity.

Aydin Kilic, the President & CEO of HIVE, acknowledged that the company’s ASIC hash rate reached 3.4 EH/s in the first week of July, which is projected to grow as the majority of the previously announced 1.26 EH/s of ASICs have been dispatched and are currently being installed in data centers.

“We expect to provide updates on our growing hash rate capacity as we work towards our interim goal of 4 EH/s, and moreover, we are actively evaluating opportunities in the market for our year-end goal of 6 EH/s,” Kilic added.

The result is better than 2023’s average, but clearly lower than this year’s record of 304,6 BTC mined last month or 280 BTC mined in March.

3. Circle and Tether Freeze $65 Million in Assets Amid Multichain Exploit Suspicions

Circle and Tether, the issuers of stablecoins, have taken action to freeze assets worth over $65 million linked to a suspected exploit of the cross-chain router protocol Multichain. This action was prompted by significant unexplained outflows from the Multichain MPC bridge on July 6.

0xScope, a knowledge graph protocol, has identified three addresses that received at least $63.2 million in USD Coin from Multichain, and these addresses have now been frozen. Additionally, the Fantom Foundation reported that two addresses flagged as “Multichain Suspicious Addresses” by Etherscan had over $2.5 million in Tether USDT frozen.

On July 6, a total of more than $125 million worth of cryptocurrencies were withdrawn from various wallets, impacting the Fantom bridge of Multichain, as well as the ecosystems of Dogechain, Moonriver, Kava, and Conflux. The reason behind these abnormal asset transfers remains unknown.

4. Bitcoin Halving 2024 Brings Dire Consequences for Crypto Miners

The Halving Event May Affect Over 50% of Miners?

Giving it a point, according to Jaran Mellerud, a crypto-mining analyst at Hashrate Index, raised costs associated with mining operations will likely pose difficulties for many miners. Approximately half of the miners are expected to suffer due to their less efficient mining processes and higher expenses.

Mellerud explains that after the halving, the break-even electricity price for the primary mining machine is predicted to decrease from 12 cents/kWh to six cents/kWh. This means that around 40% of miners have operating costs that exceed this threshold, making it challenging for them to remain profitable.

Whereas, Wolfie Zhao, head of research at TheMinerMag, echoes these concerns, stating that the total cost for certain miners is already surpassing Bitcoin’s current price, making their net profits turn negative.

Mining Industry Debt is Hitting Hard

Complicating matters further is the fact that the Bitcoin mining industry is currently operating under significant debt. This debt, ranging from $4.5 billion to $6 billion, is a consequence of last year’s extended bear market and increased electricity costs. The migration of miners from China to North America following the domestic mining ban in 2021 has also contributed to increased borrowing. Limited access to the capital market for miners has made debt financing more readily available in the US, according to Zhao.

What are the Preparations?

In anticipation of the halving, Bitcoin miners are taking proactive measures to protect their operations. These include locking in power prices, strengthening their financial reserves, and reducing investment activities. However, Tiffany Wang, CEO of Texas-based Bitcoin miner Lotta Yotta, believes that despite these preparations, numerous operators will still face significant challenges. Wang advises miners to save funds to sustain their companies during the high-risk halving year, as many are likely to be driven out of the market.

Profitability and Future Outlook

Having said that, to maintain profit margins after the halving, Bitcoin’s price would need to reach $50,000-$60,000 next year, considering the record-high mining difficulty observed in June. As the industry faces growing competition and potential profitability challenges, the road ahead for miners remains uncertain.

While the 2024 Bitcoin halving event brings excitement to many, it is a grave concern for miners. Higher costs and reduced profit margins, coupled with existing debt, make it difficult for many miners to stay afloat.

As the highly anticipated 2024 Bitcoin halving event approaches, experts are cautioning that it could have detrimental effects on certain crypto miners. While previous halvings have contributed to Bitcoin’s price rallies, the upcoming event is expected to sound the “death knell” for some miners, according to Bloomberg.

5. Twitter Payments Gains Money Transmitter Licenses, Aims for Nationwide Rollout Amid Crypto-Tech Community Collaboration and Challenges

This week marked a significant milestone for Twitter as its subsidiary, Twitter Payments, secured its first money transmitter licenses in Michigan, New Hampshire, and Missouri, signaling a major advancement in the company’s plans to introduce a payment platform. With a focus on cryptocurrency, Twitter aims to offer transfer services across all 50 U.S. states. Although further approvals are still pending and no specific timeline has been disclosed.

Like any business, Twitter is exploring new revenue streams leveraging its extensive user base. During a Twitter Space event in 2022, Elon Musk expressed his vision of connecting bank accounts to social media profiles, incorporating features like debit cards and money transfers. This objective bears resemblance to the now-defunct Diem, a global payments project by Meta, Facebook’s parent company.

To achieve better results than Meta’s project, Twitter heavily relies on its crypto-tech community. However, there are challenges, including disagreements between Musk and Crypto Twitter. Recently, Twitter limited the reach of its content due to “extreme levels of data scraping and system manipulation,” which dealt a blow to the crypto ecosystem. Twitter serves as a vital platform for sharing information and reaching new audiences within the crypto community.

Musk addressed the situation on the platform, stating, “The reason I set a ‘View Limit’ is because we are all Twitter addicts and need to go outside.” This move presents a potential double-edged sword for Twitter’s payment plans, as it navigates collaboration and challenges within the crypto space.

6. Former FTX CEO Sam Bankman-Fried Reportedly Behind Cancellation of Taylor Swift Sponsorship Deal

Contrary to earlier reports, it has been revealed that the decision to call off the sponsorship deal between defunct cryptocurrency exchange FTX and Taylor Swift was made by former CEO Sam Bankman-Fried (SBF), rather than the singer-songwriter herself.

According to a report from The New York Times on July 6, three individuals familiar with the sponsorship deal disclosed that Bankman-Fried was the one responsible for terminating the agreement, which was worth approximately $100 million, prior to FTX filing for bankruptcy. Swift’s team had reportedly signed the agreement after more than six months of negotiations but was left frustrated and disappointed when SBF decided to pull the plug.

This report contradicts the narrative presented by several media outlets, which had suggested that Swift’s team had conducted thorough due diligence before withdrawing from the FTX deal. As a result of the exchange’s collapse, celebrities such as football star Tom Brady, NBA point guard Stephen Curry, and other high-profile individuals have faced legal scrutiny, with some being named in class-action lawsuits filed by disgruntled FTX investors.