Crypto Roundup: Binance Eyes Record Profits, South Korea Loosens Restrictions and Miners Eye Japan

Fresh off their first weekly gain in a month, cryptocurrencies are capturing market headlines Saturday thanks to positive developments on several fronts. On the front burner today is Binance, South Korean regulations and rural Japan’s emergence as a mining hotbed.

Binance Anticipates Record Profit This Year

A six-month downturn in cryptocurrency prices hasn’t impacted Binance’s bottom line. The world’s largest digital currency exchange by trading volume is expected to net between $500 million and $1 billion in profits this year, according to CEO Changpeng Zhao.

Binance has seen its user base more than quadruple during the first half of the year. At the time of writing, the soon-to-be Malta-based exchange has more than 10 million registered users. That’s up from 2 million at the start of the year.

The exchange earned $300 million in revenue during the first six months of the year, compared with $200 million in the fourth quarter of 2017.

Binance processed more than $1.1 billion worth of cryptocurrency transactions on Saturday, according to CoinMarketCap. This includes more than 14% of market-wide BTC/USDT trades.

South Korea Seeks Regulatory Reform

South Korea will liberalize cryptocurrency regulations in line with a G20 directive that seeks to create a universal framework for digital assets, according to a new report from The Korea Times. The local media outlet said the Group of 20 has set a July deadline for enacting the first step in unified cryptocurrency regulations.

The Financial Services Commission (FSC) has revised its guidelines pertaining to cryptocurrency exchanges in order to prevent money laundering and other illegal activities. The country’s financial watchdog stepped up its efforts in the wake of multiple cyber attacks targeting domestic exchanges. Under the new guidelines, the FSC has asked the Korea Financial Intelligence Unit to oversee domestic transactions and user activity tied to cryptocurrencies.

A government official quoted by The Korea Times issued the following statement:

“Establishing unified rules is a complicated issue given the broader range of assessments between government agencies. This is why the country needs close international cooperation as it is still in the early stages of fine tuning guidelines,” another official said.

Cryptocurrency Miners Eye Japan

An abundance of cheap electricity and affordable rent are drawing cryptocurrency miners to Japan’s back-country, with underpopulated regions such as Fukui emerging as prime destinations for cost savings.

Fukui, which has a population of roughly 250,000, has succeeded in attracting mining companies thanks to a subsidy program that covers 50% of the rent for setting up shop in an abandoned factory. Startups as well as established mining rigs are taking advantage of the program.

Kanazawa has also lured established companies to its region, chief among them being, an e-commerce company now with 1,000 mining rigs.

Profits generated from cryptocurrency mining are directly tied to the asset’s underlying price. With bitcoin mining costs expected to reach $9,000 this year, Japan’s lesser known regions could emerge as attractive hubs for miners.

Bitcoin Bull Tom Lee Maintains Bullish Outlook

Fundstrat co-founder Tom Lee may have misspoke when he told CNBC earlier this week that bitcoin will max out at $20,000 this year from a prior estimate of $25,000. The Wall Street crypto analyst cleared up the confusion Thursday evening in an interview with CNBC’s “Fast Money.”

In that interview, Lee said bitcoin has historically traded at 2.5 times its mining costs. Assuming that a single bitcoin will cost $9,000 to mine later this year, fair market value should be at least $20,000. However, $25,000 or a level close to that is still very much in play.

If bitcoin prices hit $20,000 this year, investors are looking at a 200% gain from current levels.

The value of bitcoin approached $6,800 earlier this week, its first definitive break higher in multiple weeks. The bulls are now eyeing $7,000 as a short-term target, though this will depend in large part on trading volumes and investor sentiment.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi