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Tether Reports Record $5.2 Billion Profit in First Half of the Year
Tether, the leading stablecoin firm, reported a record net profit of $5.2 billion for the first half of 2024 in its latest quarterly attestation. This significant profit was driven by yield-bearing investments and reserves, resulting in a net operating profit of $1.3 billion in Q2. Tether's USDT, the largest stablecoin with a market capitalization of nearly $115 billion, has benefited from the post-COVID inflationary environment and higher interest rates. Despite growing profits, Tether has faced controversy due to the lack of an official audit of its reserves, leading to a $18.5 million settlement with the New York Attorney General in 2021.
Bitcoin Drops Despite Macro Optimism from BoE Rate Cut and Fed's Dovish Signals
Bitcoin began August on a bearish note despite positive macroeconomic signals, including a rate cut by the Bank of England and hints from the Federal Reserve about a potential rate reduction in September. The Bank of England's quarter-point cut to 5% follows the Bank of Canada's similar move in June. Despite equities responding positively, with the Nasdaq, S&P 500, and Dow Jones all rising, Bitcoin's price declined, trading around $64,763, down 3% over the past day. This drop comes amid significant overhangs, including a $2 billion BTC transfer from Mt. Gox and slowing inflows into U.S. spot Bitcoin ETFs.
Riot Platforms reported a net loss of $84.4 million in Q2, compared to $27.4 million last year, mainly due to April's bitcoin halving and increased network difficulty. Revenue dropped from $76.7 million to $70 million, with a notable decline in bitcoin production by 52%. Despite this, Riot nearly doubled its installed hash rate, aiming for 36 EH/s by year-end. Additionally, Riot acquired 10.2 million more shares in Bitfarms in July, continuing its takeover attempt. Riot's shares fell 1.74% on Wednesday, while Bitfarms' shares rose 4.03%. Riot's stock is down 33.87% year-to-date.
Trading Desk Insights
BTC has taken a hit, dropping 11% since the start of the week. Heavy selling from major exchanges and whale wallets, coupled with recent geopolitical tensions, have been major contributors. The 50-day moving average around $63,000 is a critical level to watch. If BTC breaks and closes below this, it could signal a bearish trend, pushing prices down to $60,000.
Morgan Stanley announced on Friday that its 15,000 financial advisors will soon be able to offer BTC ETFs to select clients, marking a significant step for Wall Street. Starting August 7th, advisors can recommend two BTC ETFs: BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund. This move underscores the growing acceptance of BTC in mainstream finance.
In a bold move, MicroStrategy plans to buy $2 billion worth of Bitcoin through an at-the-market equity offering program.
In the ETF space, BTC saw a net inflow of $50.6 million, while ETH attracted $26.7 million.
On the equities front, stocks tumbled on Friday following a disappointing jobs report for July, sparking fears of a potential recession. Job growth in the U.S. fell short of expectations, with nonfarm payrolls increasing by just 114,000, well below the estimated 176,000. The unemployment rate climbed to 4.3%, its highest level since October 2021, surpassing forecasts of 4.1%.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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