Daily News | BTC May Rise to $56K If Bitcoin Spot ETFs Are Approved, Gemini and DCG Were Sued, US Reviewed Mines With Chinese Background

2023-10-20, 04:36

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## Crypto Daily Digest: Gemini and DCG were sued; US reviewed mines with Chinese background

According to Bloomberg, Gemini Trust Co. and Digital Currency Group (DCG) have been sued by New York's top law enforcement officials for allegedly defrauding customers of $1.1 billion, escalating the legal difficulties faced by the two companies, which were hit hard by the collapse of the crypto market last year.

New York Attorney General Letitia James filed a lawsuit on Thursday, accusing Gemini, which operates the cryptocurrency exchange, and the Genesis Global Capital division of DCG of failing to disclose the risks of Gemini Earn, a cryptocurrency lending program, to investors and attempting to conceal rising losses. Gemini falsely reported the loan risk of its joint venture with Genesis to the client and did not disclose that nearly 60% of its third-party loans once flowed to Alameda Research.

Gemini Earn claims to generate up to 8% interest for Gemini customers by allowing Genesis to lend its crypto assets to third parties. But the lawsuit claims that over $1 billion was invested in hedge fund Three Arrow Capital, and at about the same time, Genesis lost over $100 million from another borrower, Babel Finance.

The state of New York has expressed its desire to prohibit Gemini, Genesis, and DCG from entering the financial investment industry in New York, and seeks to recover the "unjust gains" of the two companies to compensate investors.

According to a survey by The Times, it has discovered <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> mines owned or operated by Chinese companies in at least 12 states in the United States, with a total energy consumption equivalent to 1.5 million households' energy consumption. Many mines are equipped with mining machines manufactured by BitContinent.

According to records, since China banned Bitcoin mining in May 2021 due to concerns about energy use and economic instability, the number of equipment transported by Bitcoin to the United States has been 15 times the total of the past five years. A recent report by the company stated that it has controlled 90% of the global Bitcoin mining equipment market. Although there is no clear evidence of association, the US still suspects that these mines opened in the US are related to Chinese authorities.

In a report submitted by the Microsoft team to the U.S. Foreign Investment Commission in August 2022, it was stated that the Bitcoin mine located next to the company's Wyoming data center could allow Chinese people to "conduct comprehensive intelligence gathering operations," even if there were no direct signs of malicious activity by the entity.

According to geographic information, the mine referred to by Microsoft is not only adjacent to the Microsoft Data Center that supports the Pentagon, but also only about one mile away from the air force base that controls nuclear intercontinental ballistic missiles. A disputed contract lawsuit shows that Chinese mining machine manufacturer BitContinent is a participant in a mining site near the air force base.

According to an anonymous US official told the New York Times, they have been tracking the operations of mines in Wyoming for several months and have taken measures to prevent and reduce potential intelligence gathering activities.

JPMorgan analysts say that as the US SEC has not appealed against the recent litigation ruling of Grayscale, it is expected that the SEC may approve multiple spot Bitcoin ETF applications within "a few months.”

Analysts say that spot Bitcoin ETFs are most likely to be approved before January 10, 2024, which is the final deadline for Ark Invest and 21Shares applications.

Matriexport, a Singapore crypto financial services company under Wu Jihan, stated in a report that if BlackRock's spot Bitcoin ETF is approved by the US Securities and Exchange Commission, the price of Bitcoin may rise to between $42,000 and $56,000. Matrixport's analysis of 15000 registered investment advisors in the United States predicts that funds worth approximately $12 billion to $24 billion may <a href="/price/flow-flow" target="_blank" class="blog_inner_link">Flow</a> into such ETFs.

## Today’s Main Token Trends
### BTC
![](https://gimg2.gateimg.com/image/article/1697780374BTC.png)
This week, the high point of BTC briefly touched $30,000 and continued to hold above the critical support level at $28,125. In the short term, the resistance is at $29,500. The medium-term key breakout target is $33,085. If it doesn't break this level by the end of the month, it may signal the end of this year's rally. It is advisable to keep an eye on the resistance levels.

For a conservative long position strategy, it's recommended to enter a long position above $30,000 in line with the trend, with targets at $30,888 and $33,085. Conversely, for a conservative short position strategy, you should enter a short position around $30,000 as a counter-trend trade, with a target at $29,500.

### ETH
![](https://gimg2.gateimg.com/image/article/1697780392ETH.png)
Despite a significant rebound in the overall market this week, the short-term and overall upward momentum for ETH remains weak. The target of $1,631 has been reached, but it continues to fluctuate around the $1,570 level. Downside target remains at $1,465, making a long-term bearish strategy viable.

### BAND
![](https://gimg2.gateimg.com/image/article/1697780414BAND.png)
BAND is part of the oracle and DeFi concept, having dropped from its all-time high of $23.28 to $1.399. It is currently experiencing a second uptrend in the short term. For those looking to position for the long term, there is still significant upside potential. In the next bull market cycle, apart from the previous high, the top targets are $44.77, $71.36, and $115.62.

## Macro: US bond yields skyrocketing, Powell hinted that interest rate hikes may still be possible in December

The US Treasury yield rose during the session, and the 10-year US Treasury yield briefly approached the 5% mark. After Powell's speech, it fell and still closed around 4.99%. The two-year US Treasury yield fell by 6 basis points within the day, closing near 5.16%. The 10-year US Treasury yield rose by nearly 70 basis points within a month, while the reverse range of the two-year US Treasury yield narrowed to about 26 basis points.

Spot gold continued to rise during Powell's speech, closing 1.35% higher at $1,974.07 per ounce, reaching a new high since the end of July; Spot silver rose 0.8% to close at $23.03 per ounce.

The three major stock indexes of the US stock market collectively closed lower. After Powell's attempt to preserve various flexibility for the Federal Reserve ended, the three major stock indexes continued to decline, with the Dow closing 0.75% lower, the Nasdaq closing 0.96% lower, and the S&P 500 index closing 0.86% lower.

Federal Reserve Chairman Powell delivered a speech at the New York Economic Club on Thursday afternoon. According to Hong Kong's Wande News Agency, Federal Reserve Chairman Powell stated that inflation is still too high and the path to fighting inflation may be bumpy and take some time. The Federal Reserve is committed to sustainably reducing inflation to 2%.

Powell believes that achieving this goal may require a period of below-trend economic growth and further weakening of labor market conditions. He did not rule out further interest rate hikes if the data were too good, but also emphasized that rising risks and bond market yields have tightened financial conditions. Powell also stated that considering uncertainty and risks, as well as the progress made, the Federal Reserve is acting cautiously. Additionally, Powell pointed out that an increase in bond market yields may mean that there is no need for further interest rate hikes.

Powell's speech closely echoes the speeches of his colleagues in recent days, who have expressed their readiness to keep short-term interest rates unchanged at the next meeting from October 31 to November 1. This is partly because the rise in long-term interest rates over the past month may slow down the economy, and if borrowing costs remain high, it is actually equivalent to raising interest rates.

Federal Reserve mouthpiece Nick Timiraos recently commented on Fed Chairman Powell's speech. Powell hinted that he is pleased with the drop in inflation this summer and that the Fed is unlikely to raise interest rates again unless there is clear evidence that increased economic activity will endanger inflation progress.

Presently, there have been some macroeconomic problems in the United States, or various signs indicating that if the Federal Reserve persists, it will ultimately lead to a series of problems, such as the current highest housing loan interest rate in history, where everyone buys and sells houses, but prices have risen. For example, Musk complained that the high loan interest rate resulted in poor car sales data, and so on.

Based on these factors, as the Federal Reserve, it will also consider the interest rate hikes comprehensively. If there is no interest rate hike this year, then the interest rate cut next year will also be advanced. Otherwise, the borrowing costs in society will be too high, not suitable for economic development, and even lead to a major recession in the US economy.

<div class="blog-details-info">
<div>Author:**Byron B.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>