Bitcoin's 2023 rally gathers steam as cryptocurrency briefly tops ,000

Technology

Bitcoin’s 2023 rally gathers steam as cryptocurrency briefly tops $23,000

Published

2 years ago

January 23, 2023

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Bitcoin had a tough 2022. Now investors are looking toward 2023 with caution when it comes to cryptocurrencies.

Thomas Trutschel | Photothek | Getty Images

Bitcoin rose further over the weekend, as traders took news of another crypto bankruptcy in their stride and placed bets on a Federal Reserve “pivot” to cutting interest rates.

The price of the No. 1 token briefly topped $23,000 for the first time since Aug. 19, 2022, according to data from CoinGecko. It has since ebbed slightly to $22,859.20. The jump brings bitcoin up almost 39% since the start of January.

Ether, the second-biggest digital coin, rallied as high as $1,664.78 on Saturday — the first time it has surpassed $1,600 since Nov. 7, 2022. As of 6:40 a.m. ET, ether was worth $1,639.30 apiece.

Bitcoin has kicked off 2023 on a positive note, with investors hoping for a reversal in the monetary tightening that spooked market players last year.

The Fed and other central banks began cutting interest rates in 2022, shocking holders of risky asset classes, like stocks and digital tokens. Publicly-listed tech stocks and private venture capital-backed start-ups particularly took a beating, as investors sought protection in assets perceived as safer, such as cash and bonds.

With inflation now showing signs of cooling in the U.S., some market players are hopeful that central banks will start easing the pace of rate rises, or even slash rates. Economists previously told CNBC they predict a Fed rate cut could happen as soon as this year.

“Fed tightening seems to be lighter and inflation less of a risk,” Charles Hayter, CEO of crypto data site CryptoCompare, said in emailed comments to CNBC. “There is hope there will be more caution to rate rises globally.”

The Fed is likely to keep interest rates high for the time being. However, some officials at the bank have recently called for a reduction in the size of quarterly rate hikes, wary of a slowdown in economic activity.

The world’s top digital currency, bitcoin, is “increasingly looking like it has put in its bottom,” according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.

Bitcoin short sellers have been squeezed by sudden upward moves in prices, according to Ayyar. Short selling is an investment strategy whereby traders borrow an asset and then sell it in the hope that it will depreciate in value.

A wipe-out of those short positions sparked by the rising price of bitcoin has added “fuel to the fire,” Ayyar said, as short sellers are forced to cover their bets by buying back the borrowed bitcoin to close them out.

What crypto collapse?

Investors don’t seem to have been greatly perturbed by the collapses of top crypto companies, stemming from the fallout of digital currency exchange FTX’s insolvency in November.

Last week, the lending arm of New York-based crypto investment firm Genesis became the latest casualty of the crypto crisis, seeking bankruptcy protection in a “mega” filing listing aggregate liabilities ranging from $1.2 billion to $11 billion.

“The Genesis debacle has been playing out for a while and is likely priced in already. FTX, on the other hand, has already had a significant impact on many investors, on market psychology and on the prices of several toxic assets,” Mati Greenspan, founder and CEO of crypto investment advisory firm Quantum Economics, told CNBC.

“It should be noted however that the price on bitcoin itself is quite limited since FTX didn’t have any on their balance sheets.”

Bitcoin is still about 67% off its all-time high, despite its recent surge.

The latest crypto plunge is different from past cycles, in large part due to the role played by leverage. Major crypto players became entangled in risky lending practices, offering lofty yields that many investors now say were unsustainable.

This began in May with the collapse of terraUSD — or UST — an algorithmic stablecoin that was supposed to be pegged one-to-one with the U.S. dollar. The failure of UST brought down terraUSD’s sister token luna and hit companies with exposure to both tokens.

Three Arrows Capital, a hedge fund with bullish views on crypto, plunged into liquidation because of its exposure to terraUSD.

Then came the November collapse of FTX, one of the world’s largest cryptocurrency exchanges. It was run by Sam Bankman-Fried, an executive who was often in the spotlight.

The fallout from FTX continues to ripple across the cryptocurrency industry. Roughly $2 trillion of value has been erased from the overall crypto market since the peak of the crypto boom in November 2021, in a deep downturn known as “crypto winter.”

One analyst cautioned that technical indicators suggest there could be some pullback from the token’s recent rally.

Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, said that while bitcoin’s trend indicators are “generally signaling a strong upward trend,” its relative strength indicator, or RSI, “is diverging from the price’s upward movement and starting to slide down, which is not a good sign for the current price trend.”

“Bitcoin could test its August high and be supported at the $20k~$21k level, but with its RSI’s divergence and a couple of big tech earnings ahead this week, it could get quite unstable,” Hagesawa said in a Monday note.

The recent bitcoin price boost has nevertheless offered some investors hope that the ice may be starting to thaw.

Greenspan said upward moment in bitcoin is typical of the cryptocurrency, as investors anticipate the next so-called “halving” event — a change to the bitcoin network that reduces rewards to miners by half. It is viewed by some investors as positive for the price of the token, as it squeezes supply.

The next halving is slated to take place sometime between March and May of 2024.

Technology

Tesla launches refreshed Model Y in China to fend off domestic rivals

Published

4 hours ago

January 10, 2025

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Tesla launched a revamped version of its Model Y in China.

Tesla

Tesla on Friday announced a revamped version of its popular Model Y in China, as the U.S. electric car giant looks to fend off challenges from domestic rivals.

The Model Y will start at 263,500 Chinese yuan ($35,935), with deliveries set to begin in March. That is 5.4% more expensive than the starting price of the previous Model Y.

A spokesperson for Tesla China said that the new Model Y is only open for pre-sale in the Chinese market, rather than being launched globally.

Tesla’s Model Y refresh comes after the auto giant this month reported its first ever annual decline in overall deliveries for 2024.

Elon Musk’s electric vehicle firm is facing heightened competition around the world, from startups and traditional carmakers in Europe. In China, the company continues to face an onslaught of rivals from BYD to newer players like Xpeng and Nio.

Jason Low, principal analyst at Canalys, notes that the Tesla Model Y was the best-selling EV in China in 2024 and that the popularity of the car “remains high.” However, he noted that the competition in the sports utility vehicle (SUV) segment with vehicles priced between 250,000 yuan and 350,000 yuan “has been fierce.”

“Tesla must showcase compelling smart features, particularly a unique but well localized cockpit and services ecosystem,” as well as “effective” semi-autonomous driver assistance features “to ensure its competitiveness in the market,” Low added.

Tesla is offering a number of incentives for customers to buy the Model Y including a five-year 0% interest financing plan.

The new Model Y can accelerate from 0 kilometers per hour to 100 kilometers per hour in 4.3 seconds, Tesla said, exceeding the speed capabilities of the previous vehicle. The Model Y Long Range has a further driving range on a single charge versus its predecessor.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000.

Investors have been yearning for a new mass-market model to reinvigorate sales. Tesla has previously hinted that that a new affordable model could be launched in the first half of 2025.

Despite Tesla’s headwinds, the company’s stock is up nearly 70% over the last 12 months, partly due to CEO Musk’s close relationship with U.S. President-elect Donald Trump.

Technology

World’s biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

Published

7 hours ago

January 10, 2025

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World's biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023.

Brendan Mcdermid | Reuters

Taiwan Semiconductor Manufacturing Co. posted December quarter revenue that topped analyst estimates, as the company continues to get a boost from the AI boom.

The world’s largest chip manufacturer reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year.

That beat Refinitiv consensus estimates of 850.1 billion New Taiwan dollars.

For 2024, TSMC’s revenue totaled 2.9 trillion New Taiwan Dollars, its highest annual sales since going public in 1994.

TSMC manufacturers semiconductors for some of the world’s biggest companies, including Apple and Nvidia.

TSMC is seen as the most advanced chipmaker in the world, given its ability to manufacture leading-edge semiconductors. The company has been helped along by the strong demand for AI chips, particularly from Nvidia, as well as ever-improving smartphone semiconductors.

“TSMC has benefited significantly from the strong demand for AI,” Brady Wang, associate director at Counterpoint Research told CNBC.

Wang said “capacity utilization” for TSMC’s 3 nanometer and 5 nanometer processes — the most advanced chips — “has consistently exceeded 100%.”

AI graphics processing units (GPUs), such as those designed by Nvidia, and other artificial intelligence chips are driving this demand, Wang said.

Taiwan-listed shares of TSMC have risen 88% over the last 12 months.

TSMC’s latest sales figures may also give hope to investors that the the demand for artificial intelligence chips and services may continue into 2025.

Foxconn, which assembles Apple’s iPhones, reported its highest-ever fourth quarter revenue this week, as it notched strong demand for AI servers.

Meanwhile, Microsoft this month said that it plans to spend $80 billion in its fiscal year to June on the construction of data centers that can handle artificial intelligence workloads.

CNBC’s Jordan Novet contributed to this report.

Technology

Supreme Court set to hear oral arguments on challenge to TikTok ban

Published

14 hours ago

January 10, 2025

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Supreme Court set to hear oral arguments on challenge to TikTok ban

Tik Tok creators gather before a press conference to voice their opposition to the “Protecting Americans from Foreign Adversary Controlled Applications Act,” pending crackdown legislation on TikTok in the House of Representatives, on Capitol Hill in Washington, U.S., March 12, 2024.

Craig Hudson | Reuters

The Supreme Court on Friday will hear oral arguments in the case involving the future of TikTok in the U.S., which could ban the popular app as soon as next week.

The justices will consider whether the Protecting Americans from Foreign Adversary Controlled Applications Act, the law that targets TikTok’s ban and imposes harsh civil penalties for app “entities” that continue to carry the service after Jan.19, violates the U.S. Constitution’s free speech protections.

It’s unclear when the court will hand down a decision, and if China’s ByteDance continues to refuse to divest TikTok to an American company, it faces a complete ban nationwide.

What will change about the user experience?

The roughly 115 million U.S. TikTok monthly active users could face a range of scenarios depending on when the Supreme Court hands down a decision.

If no word comes before the law takes effect on Jan. 19 and the ban goes through, it’s possible that users would still be able to post or engage with the app if they already have it downloaded. However, those users would likely be unable to update or redownload the app after that date, multiple legal experts said.

Thousands of short-form video creators who generate income from TikTok through ad revenue, paid partnerships, merchandise and more will likely need to transition their businesses to other platforms, like YouTube or Instagram.

“Shutting down TikTok, even for a single day, would be a big deal, not just for people who create content on TikTok, but everyone who shares or views content,” said George Wang, a staff attorney at the Knight First Amendment Institute who helped write the institute’s amicus briefs on the case.

“It sets a really dangerous precedent for how we regulate speech online,” Wang said.

Who supports and opposes the ban?

Dozens of high-profile amicus briefs from organizations, members of Congress and President-elect Donald Trump were filed supporting both the government and ByteDance.

The government, led by Attorney General Merrick Garland, alleges that until ByteDance divests TikTok, the app remains a “powerful tool for espionage” and a “potent weapon for covert influence operations.”

Trump’s brief did not voice support for either side, but it did ask the court to oppose banning the platform and allow him to find a political resolution that allows the service to continue while addressing national security concerns.

The short-form video app played a notable role in both Trump and Democratic nominee Kamala Harris’ presidential campaigns in 2024, and it’s one of the most common news sources for younger voters.

In a September Truth Social post, Trump wrote in all caps Americans who want to save TikTok should vote for him. The post was quoted in his amicus brief.

What comes next?

It’s unclear when the Supreme Court will issue its ruling, but the case’s expedited hearing has some predicting that the court could issue a quick ruling.

The case will have “enormous implications” since TikTok’s user base in the U.S. is so large, said Erwin Chemerinsky, dean of Berkeley Law.

“It’s unprecedented for the government to prohibit platforms for speech, especially one so many people use,” Chemerinsky said. “Ultimately, this is a tension between free speech issues on the one hand and claims of national security on the other.”