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BurnBot RX burns unwanted vegetation without emitting plumes of smoke.

Lora Kolodny for CNBC

Last year’s record heat wave worsened drought and dry conditions across the globe, a particularly calamitous situation for California, which has seen 13 of the state’s 20 most destructive wildfires in history break out since 2017.

In South San Francisco, a small startup is working on a high-tech approach to wildfire prevention.

Anukool Lakhina and Waleed “Lee” Haddad founded BurnBot in 2022 to develop robotics and remote-controlled vehicles that can munch up and burn away invasive plants or other dry vegetation that can fuel fires if left fallow.

BurnBot has just raised a $20 million funding round led by climate-focused ReGen Ventures, for expansion, hiring, and to develop new machines that can traverse steeper hills and get into tighter spaces.

Before BurnBot, firefighters and land owners had to use expensive, time-consuming and more dangerous options like grazing away the vegetation (typically with goats), burning it, applying herbicides or removing vegetation mechanically with a mix of equipment and manual labor.

“The sort of traditional way to do a prescribed burn is with drip torches, and that requires a large number of people,” said Lakhina, BurnBot’s CEO. “A drip torch is like a diesel watering can. You go around, you drop diesel, then ignite it.”

Burnbot’s current model, the RX, is a remote-operated vehicle that looks a cross between an oversized Zamboni and a steel cooking range with a set of fire extinguishers strapped to its back. Like other agricultural and construction equipment, the RX rolls forward on tank-like tracks and wheels, which enable it to maneuver through rough fields.

Within the chambers of the RX are several rows of torches that emit blue flames, and adjust the heat levels precisely to zap away unwanted vegetation or other fuels on the ground below. The chambers of the BurnBot RX also trap and torch away the smoke that comes from burning vegetation, so it doesn’t pollute the air in surrounding communities. When the torching is done, the RX sprays water repeatedly to extinguish any remaining embers.

Inside the chambers of the BurnBot RX torches are lit to do the work of a prescribed burn.

Lora Kolodny for CNBC

Lakhina said BurnBot’s systems can be put to use where traditional controlled burns won’t work. For example, drip torch burns produce a good deal of smoke, which is conductive enough it would interfere with the proper functioning of power lines or high-voltage equipment. BurnBot’s machines can be used even under power lines.

The company is aiming to make every person who works in fire prevention 10 times more effective than they were with old methods, Lakhina said.

Haddad, BurnBot’s chief technology officer, noted that land isn’t always ready to “receive fire” in a prescribed burn. So the company has programmed equipment, which it procures from another supplier, to roll ahead of the RX to crunch up the vegetation in an area of concern before it’s ready for torching.

BurnBot plans to conduct a prescribed burn this Friday in San Diego, a project for CalTrans, the state’s transportation agency. It also plans for another burn for Pacific Gas & Electric, the state’s major utility, in June.

PG&E spends upward of $1 billion on “vegetation management” each year. Kevin Johnson, who leads the company’s Wildfire Resilience Partnerships, said PG&E is always “looking for opportunities to do this work safer, faster, cheaper and to be more environmentally friendly.”  

BurnBot has already completed one demonstration of its controlled burn machine underneath PG&E transmission lines.

Brice Muenzer, a battalion chief with CalFire in Monterey, California, said massive fires in the state and throughout the U.S. over the past decade have been partly caused and certainly exacerbated by overzealous elimination of smaller fires, including ritual fires from indigenous communities.

“We removed fire from the ecosystem for the last 150 years and are living through that reality now,” the chief said.

CalFire has worked with BurnBot personnel, machines and additional drones overhead, to create what’s known as a control line in the field in at least one location. Muenzer says the group hopes to do more with the startup.

Creating a control line, or blacklining the land, involves firefighters strategically burning areas when the weather is calm and where flames can be controlled to create scars that will block other fires from jumping in and reaching areas with lots of new material to burn.

BurnBot cofounders (L-R) CTO Waleed “Lee” Haddad and CEO Anukool Lakhina

Lora Kolodny for CNBC

BurnBot aims to eventually expand its operations beyond California, with offices and fleets of its machines wherever vegetation management is needed and wildfire risk is highest.

“There are 50 million acres that the U.S. Forest Service has said need treatment every year and that’s just forest land,” said Lakhina. In the U.S. there are 237 million acres that need treatment overall. And grazing can cost $1,000 an acre.”

Childrens’ health is at stake along with property and healthy forests, Lakhina added. According to the Harvard School of Public Health, wildfire smoke can be more toxic than air pollution from other sources, leading to more emergency room visits, especially for children who are exposed.

Because BurnBot offers greater precision than grazing, herbicides and mechanical removal, its systems should prove ecologically more beneficial as well, Haddad said. The BurnBot RX is able to help prevent the spread of seeds from invasive species, for example, without causing any of those species to develop resistance to an herbicide.

ReGen was joined in BurnBot’s funding round by investors including AmFam Ventures, which is the venture arm of an insurance company, Toyota Ventures, and earlier backers including robotics fund Pathbreaker, Convective Capital and Chris Sacca’s Lowercarbon Capital.

WATCH: Revisiting Maui six months after devastating wildfires

Revisiting Maui six months after devastating wildfires

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Bitcoin miners upgrade power centers and get into AI to brace for slashed revenue post halving

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Bitcoin miners upgrade power centers and get into AI to brace for slashed revenue post halving

The Bitcoin halving is set to shake up the crypto's price and the network's miners

AUSTIN, TEXAS — Adam Sullivan left investment banking to mine bitcoin at an awkward time. It was May 2023, bitcoin was trading at around $21,000, U.S. regulators were in the thick of cracking down on the sector writ large, and Core Scientific, the company he had agreed to take over, was battling angry lenders in a Texas bankruptcy court over tens of millions of dollars in outstanding debt.

But Sullivan knew that, with a lifeline, he could get the business to a much better place. That’s because the halving was on the way, and with it would likely come a big rally in bitcoin.

Late Friday night, the bitcoin code automatically cut new issuance of the world’s largest cryptocurrency in half. It happens roughly every four years, and in addition to helping to stave off inflation, it historically precedes a major run-up in the price of bitcoin.

The technical event is relatively simple: Bitcoin miners get paid in bitcoin to validate transactions, and after 210,000 blocks of transactions are computed and added to the main chain, the reward given to the miners securing bitcoin is ‘halved.’

There are more than a dozen publicly traded miners on the network and thousands of smaller, private ones around the globe, constantly racing to process transactions and get paid in new bitcoin. Because the event leads to a cut to rewards paid to miners directly, they’ll be the first ones to feel the impact of the halving.

The price of bitcoin has touched new all-time highs after each “halving” event.

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Typically, when the halving cuts supply, it’s led to huge rallies for bitcoin.

In fact, the previous (and only) three halvings in the chain’s history have come before every bull run, in which the coin has touched new all-time highs and a surge of investors have entered the market for the first time.

That rapid price increase has helped many miners stave off the worst since it tends to offset the impact of having the block prize cut in half.

“As a company that was already in the process of scaling our infrastructure during the previous halving, we know the toll that halvings can take on a company if it is not adequately prepared,” Core’s Sullivan told CNBC.

The aggregate market cap of the 14 U.S.-listed bitcoin miners tracked by JPMorgan analysts, which accounts for around 21% of the global Bitcoin network, declined 28% over the first half of April to $14.2 billion, reaching year-to-date lows. Bitdeer was the best-performing stock over the period, down around 20%, versus Stronghold Digital, which was 46% lower.

Some have billed the 2024 bitcoin halving as a seminal moment for the mining sector. Depending on how much prep work miners have done, it could easily make or break them.

“Being prepared for a halving means evaluating all of your power strategies, all of your software capabilities, all of your operations,” continued Sullivan.

Others are less concerned given recent price moves in bitcoin.

In a research note from Needham on Apr. 16, analysts said they expect the halving to only have a modest impact to miners’ estimated EBITDA margins, despite the 50% reduction in revenue, since the price of bitcoin has been trading in the range of $60,000 to $70,000.

“We expect geopolitical tensions and interest rate policy to be the biggest near-term drivers of crypto price action,” Needham analysts wrote, adding that at a bitcoin price above $60,000, the halving is “derisked for nearly all public miners.”

The bank did, however, single out their preference for low-cost bitcoin producers like Riot Platforms, Bitdeer, and Cipher Mining. Meanwhile, if bitcoin prices fall, Needham says the most outsized native impact will be felt by higher cost producers that are also levered to higher bitcoin prices via large treasury holdings.

Analysts from JPMorgan echoed a similar sentiment, writing in an Apr. 16 research note that they think “recent weakness offers an attractive entry point” for investors and that they are “especially bullish” on Riot, which they believe offers attractive relative valuations.

Power supply for Whinstone’s bitcoin mine in Rockdale, Texas.

Years spent bracing for the halving

Miners have had years to prepare for the halving, including seeking lower power costs and upgrading their fleets to more efficient machines.

“Bitcoin’s halving happens like clockwork every four years,” said Haris Basit, chief strategy officer of Bitdeer Technologies Group. “It’s a known variable that is a benchmark for us to remain focused on operational excellence.”

To that end, the Singapore-headquartered mining firm has invested in new data centers, but its core strategy has been to increase vertical integration through research and development. 25% of its staff is focused on R&D efforts, which Basit says have “led to new innovations and revenue pathways, such as our recently announced 4nm mining rigs and AI Cloud offerings.”

Analysts at Cantor Fitzgerald recently named Bitdeer as having one of the industry’s lowest “all-in” cost-per-coin.

Greg Beard, the CEO and Chairman of Stronghold Digital Mining, tells CNBC that miners whose only lever is more efficient machines will be at a disadvantage.

“Miners who own their low-cost power are better positioned,” said Beard. “Operational costs will be lower, allowing them to be more flexible with their capital.”

Core’s Sullivan agrees, noting that bitcoin mining data centers in the future will work hand-in-glove with power generators and grid operators to serve as a virtual battery for grid operators – allowing them to increase base load, curtail bitcoin data centers when they need to, and avoid peak generation loads, which he says are dirty and expensive.

“We own and operate our infrastructure, giving us greater control over operational and strategic decisions, such as the potential to expand into high-performance computing hosting,” said Sullivan.

Core Scientific, which launched in 2017 and now manages seven mining sites in five U.S. states, also owns the full technology stack. The company has been looking to diversify its revenue streams beyond purely bitcoin. Sullivan says that existing data centers offer reconfiguration opportunities to accommodate new types of high-value compute. 

“Certain data centers are located in close proximity to major metropolitan areas, making them candidates for low-latency, high-value compute applications,” said Core’s CEO.

Bitdeer’s bitcoin mine in Rockdale, Texas.

Riot Platforms CEO Jason Les told CNBC that preparation for the halving came down to the company’s long-standing focus on achieving a low cost of power, strong balance sheet, and significant scale of operations. Les says that’s what has positioned the firm to both withstand the halving with positive margins and be well positioned for upside on the other side of it.  

“Our new Corsicana Facility was energized just this week, and we will be significantly scaling up our hash rate with next-generation equipment at that new site over the remainder of the year,” said Les. “As a result, we are positioned to mine more bitcoin per day at the end of the year than we do today, despite the halving.”

Marathon Digital, which has seen its stock rise more than 70% in the last year, took a different approach to scaling the business than its rivals. CEO Fred Thiel tells CNBC that the company grew quickly using an asset-light approach, where Capex was spent on mining rigs rather than infrastructure. 

“In December, we owned less than 5% of the sites where we were hosting our miners,” said Thiel. “Today we now own 53% of our total 1.1 gigawatts of capacity, having purchased it at less than the build and replacement cost.”

Owning sites lowers Marathon’s cost to mine by up to 20% on a marginal cost basis. Thiel also noted that by the end of 2024, Marathon expects to further improve efficiency by 10% to 15% as they deploy the next generation rigs across their new sites. 

That boost to efficiency isn’t just about new gear, however. The firm is deploying its own custom firmware, which allows it to operate even more efficiently. 

Marathon, along with other mining firms, has begun diversifying its business model into ancillary operations beyond purely bitcoin mining, as well.

Thiel says the company recently launched an energy harvesting division, where they are compensated for converting stranded methane and bio-mass into energy, which they then sell heat back into an industrial or commercial process. The service essentially subsidizes and lowers Marathon’s cost to mine significantly. The company expects this new business line to generate a significant portion of its revenues by the halving in 2028. 

Blockstream's Adam Back on teaming up with Tesla and Block to mine bitcoin with solar power

Diversifying revenue

The April 2024 bitcoin halving looks a lot different than the three that came before it.

For years, increased competition resulting from new miners coming online has been cutting into profits, because more miners means more people are sharing the same pool of rewards.

In a research note from JPMorgan on Apr. 16, analysts note that the network hashrate, a proxy for industry competition and mining difficulty, was up 4% in April from the month before. Stronghold’s Beard says the halving is a headwind dwarfed by the global hashrate increasing nearly five-fold from the last one in May 2020.

“Mining is a tough industry especially because there are a lot of nation states that have extra power power and they’re dedicating it to mining,” said Nic Carter of Castle Island Ventures. “It’s a free market, anybody can enter into it as long as they have the basics.”

U.S. spot bitcoin exchange-traded funds have also significantly shifted the pricing dynamics. In years past, the price of bitcoin didn’t surge until after the halving. But in the wake of record flows into these spot bitcoin funds, the world’s largest cryptocurrency touched a fresh all-time-high above $73,000 in March.

“The recently approved bitcoin ETFs have proven to be huge pipelines of capital into bitcoin and that universe of ETFs continues to grow with the recent approvals in Hong Kong as well,” said Riot’s Les. “We think the price action we’ve seen in bitcoin year-to-date reflect that and has us very optimistic on what bitcoin mining economics can look like in the months and years post-halving.”

Bitcoin resumes rally after hitting a new all-time high

Blackrock’s ETF reached $17 billion in net assets within a few months of launching. Beard of Stronghold tells CNBC that if Blackrock added even just a billion dollars more of bitcoin in April to its ETF, it would single handedly create demand for more coins than the mining industry will supply post halving.

What is also different this time around is that the block reward is no longer the primary form of miner revenue. Recent programming innovations in bitcoin have given way to a burgeoning ecosystem of projects building on top of bitcoin’s blockchain, which has translated to greater transaction fee revenue for miners.

There is a limit to how large the blocks can go but the value of those blocks is about to increase significantly, according to Bill Barhydt, who is the CEO and founder of Abra. From Barhydt’s vantage point, he supports miners with a mix of services, including their auto liquidations, so he has access to a lot of macro data across the sector.

“The math is simple,” begins Barhydt. “Bitcoin blocks are fixed in size and the demand for data within those blocks is going to increase significantly for several reasons, including more retail wallet holders moving their bitcoin into and out of storage, new uses cases like Ordinals (NFTs for bitcoin) and DeFi on bitcoin, institutional settlement requirements for exchange traded products in the U.S., Hong Kong, Europe, etc., lightning settlement transactions, and more.”

At the current rate of adoption, Barhydt believes that transaction fees in this cycle would likely peak within 24 months at 10 times their cost during the previous cycle peak, due to a combination of a higher price for bitcoin itself, combined with higher demand for the space inside each block. 

Castle Island’s Carter isn’t so sure that fee-based revenue can completely make up for lost income post-halving.

“It’s not entirely clear that fees are fully offsetting the lost revenue, and in fact, I don’t expect that to happen” said Carter.

Fees tend to be really cyclical. They rise sharply during periods of congestion, and they fall back to near zero during other normal periods. Carter cautions that miners will see spikes in fees, but there is not yet an enduring, strong, and robust fee market most of the time.

Jack Dorsey backed start-up taps into geothermal, hydro and solar power to run bitcoin mines across Africa

Swapping ASICs for AI

In the last year, there has been a surge in demand for AI compute and infrastructure that can support the massive workloads required to power these novel machine learning applications. In a new report, digital asset fund manager CoinShares says it expects to see more miners shift toward artificial intelligence in energy-secure locations because of the potential for higher revenues.

Already, mining firms like BitDigital, Hive, Hut 8, Terawfulf, and Core Scientific all have either current AI operations or AI growth plans.

“This trend suggests that bitcoin mining may increasingly move to stranded energy sites while investment in AI grows at more stable locations,” write analysts at CoinShares.

But pivoting from bitcoin mining to AI isn’t as simple as re-purposing existing infrastructure and machines. The data center requirements are different, as are the data network needs.

“AI presents several challenges, notably the need for distinct and considerably more costly infrastructure, which establishes barriers to entry for smaller, less capitalized entities,” continues the report. “Additionally, the necessity for a different skill set among employees leads to increased costs as companies hire more AI-skilled talent.”

The rigs used to mine bitcoin are called ASICs, short for Application-Specific Integrated Circuits. The “Specific” in that acronym means that it can’t be used to do other things, like supporting the underlying infrastructure for AI.

“If you’re a bitcoin miner, your machines can’t be repurposed,” explains Carter. “You have to buy net new machines in order to do it and the data center requirements are different for AI versus bitcoin mining.”

Sullivan says that Core Scientific, which has been mining a mix of digital assets since 2017, began to diversify into other services in 2019.

“The company has owned and hosted Nvidia DGX systems and GPUs for AI computing, having built and deployed a specialized facility specifically for high-value compute applications at our Dalton, Georgia data center campus,” he said.

Core Scientific has also partnered with CoreWeave, a cloud provider which provides infrastructure for use cases like machine learning.

Sullivan says the combined capabilities will support both AI and High Performance Compute workloads, resulting in an estimated revenue of $100 million, though he says the total potential revenue is much higher given their significant infrastructure footprint that can be fitted to host some of the most advanced GPU compute coming to market.

“Bitcoin mining is an early example of high-value compute, attracting significant capital and a number of companies scaling their operations to support the Bitcoin network,” said Sullivan.

But Sullivan thinks few operators will be able to make the transition to AI.

Sullivan continued, “Bitcoin mining sites can only be repurposed if they meet the attributes that are required for HPC. Many existing sites across North America do not meet these needs.”

Spot bitcoin ETF decision: First trades expected after SEC grants multiple approvals

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Bitcoin just completed its fourth-ever ‘halving,’ here’s what investors need to watch now

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Bitcoin just completed its fourth-ever 'halving,' here’s what investors need to watch now

Dado Ruvic | Reuters

The Bitcoin network on Friday night slashed the incentives rewarded to miners in half for the fourth time in its history.

The celebrated event, which takes place about once every four years as mandated in the Bitcoin code, is designed to slow the issuance of bitcoins, thereby creating a scarcity effect and allowing the cryptocurrency to maintain its digital gold-like quality.

There may be some speculative trading on the event itself. JPMorgan said it expects to see some downside in bitcoin post-halving and Deutsche Bank said it “does not expect prices to increase significantly.” However, the impact may be bigger months from now, even if bitcoin continues its trend of diminishing returns from its halving day to its cycle top. Two key things to watch will be the block reward and the hash rate.

“While the upcoming Bitcoin halving will create a supply shock as the previous ones had, we believe its impact on the cryptocurrency’s price could be magnified by the concurrent demand shock created by the emergence of spot bitcoin ETFs,” said Benchmark’s Mark Palmer.

The bigger immediate impact will be to the miners themselves, he added. They’re the ones that run the machines that do the work of recording new blocks of bitcoin transactions and adding them to the global ledger, also known as the blockchain.

“Miners with access to inexpensive, reliable power sources are well positioned to navigate the post-halving market dynamics,” said Maxim’s Matthew Galinko in a note Friday. “Some miners, many that are not public, could exit the market with a combination of poor access to power, efficient machines, and capital. Miners with capital and relatively expensive power will likely find opportunities in the wake of potential consolidation and disruption driven by the halving.”

The block reward

Miners have two incentives to mine: transaction fees that are paid voluntarily by senders (for faster settlement) and mining rewards — 3.125 newly created bitcoins, or about $200,000 as of Friday evening, when the mining reward shrunk from 6.25 bitcoins. The incentive was initially 50 bitcoins.

The reduction in the block rewards leads to a reduction in the supply of bitcoin by slowing the pace at which new coins are created, helping maintain the idea of bitcoin as digital gold — whose finite supply helps determine its value. Eventually, the number of bitcoins in circulation will cap at 21 million, per the Bitcoin code. There are about 19.6 million in circulation today.

“Miners utilize powerful, specialized computer hardware to validate transactions on the Bitcoin network and record them permanently on the blockchain,” Deutsche Bank analyst Marion Laboure said. “This process, known as mining, rewards miners with newly minted bitcoins. But with each halving, the reward to mining is decreased to maintain scarcity and control the cryptocurrency’s inflation rate over time.”

The hash rate

Historically after a halving, the Bitcoin hash rate – or the total computational power used by miners to process transactions on the Bitcoin network – has fallen, pricing some miners out of the market. It generally recovers in the medium term, however, Laboure pointed out.

The network hash rate has been hitting all-time highs for months as miners tried to take market share ahead of the halving. Growth in the Bitcoin hash rate dilutes individual miners’ contribution to the network hash rate.

“In the past three halvings, the network recovered its pre-halving hash rate levels within an average of 57 days,” she said. “It is also likely that the current elevated prices of bitcoin may limit this short-term dip in the hash rate, as bitcoin miners enjoy record high profits in the lead-up to the halving.”

Palmer said the impact of the halving on bitcoin miners’ economics could be “more than offset over time” if bitcoin’s price rallies keep pushing the cryptocurrency to new highs in the months ahead.

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The Bitcoin network completes the fourth-ever ‘halving’ of rewards to miners

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The Bitcoin network completes the fourth-ever ‘halving’ of rewards to miners

Breaking down Bitcoin's upcoming 'halving' event

The Bitcoin network on Friday evening completed its fourth “halving,” reducing the rewards earned by miners to 3.125 bitcoins from 6.25.

The price of bitcoin has been volatile ahead of the event, and fell about 4% this week to trade around $64,100, according to Coin Metrics.

Mechanically, the halving itself shouldn’t affect the price of bitcoin in the short term, but many investors are expecting big gains in the months ahead, based on the cryptocurrency’s performance after previous halvings. After the 2012, 2016 and 2020 halvings, the bitcoin price ran up about 93x, 30x and 8x, respectively, from its halving day price to its cycle top.

The event is a big test for mining companies, however.

“All else equal, the halving will cut industry revenues in half, triggering a wave of consolidation and business closures, while (hopefully) rationalizing the network hashrate and industry capex, which is ultimately good for the remaining operators,” JPMorgan analyst Reginald Smith said in a recent note to investors.

Hash rates are a measure of the computational power used to process transactions on the bitcoin network. The larger a miner’s hash rate, the greater of a revenue opportunity it has.

Mining stocks have been volatile in the days leading up to the event. Many are down by double digits for the year, after rallying between about 300% and 600% in 2023. Riot Platforms, for instance, is down about 41% in 2024 through Friday’s close, but it surged 356% in 2023.

“The market so far has seen bitcoin mining stocks as mere BTC proxies, in absence of bitcoin ETFs,” said Bernstein analyst Gautam Chhugani. “[The] halving would further differentiate the low cost, high-scale consolidating winners vs. rest of smaller miners which may be disadvantaged post-halving.”

Mining stocks in 2023 and 2024

2024 YTD 2023 return
MARATHON DIGITAL (MARA) -30.2% 586.84%
RIOT PLATFORMS (RIOT) -41.08% 356.34%
CLEANSPARK (CLSK) 54.4% 440.69%
IRIS ENERGY (IREN) -31.68% 472%
CIPHER MINING (CIFR) -7.63% 637.50%

Still, speculators may still trade on the event. Another JPMorgan analyst, Nikolaos Panigirtzoglou, said Thursday that he expects the near-term bitcoin price to fall after the halving, citing overbought conditions and prices that are still above the cryptocurrency’s comparison to gold when adjusted for volatility. He also pointed to subdued venture capital funding of crypto projects.

Analysts at Deutsche Bank have a similar view.

“[The] Bitcoin halving is already partially priced in by the market and we do not expect prices to increase significantly following the halving event,” the firm’s Marion Laboure said in a note Thursday, adding that it “has been widely anticipated in advance due to the nature of the Bitcoin algorithm.”

“Looking ahead, we continue to expect prices to stay high,” she added, citing expectations of future spot Ethereum ETF approvals, future central bank rate cuts and regulatory developments.

Bitcoin is currently trading at just under $64,000, roughly 13% off its March 14 all-time high of $73,797.68.

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