Business News & Updates: Latest Info about Crypto Business from Blockonomi https://blockonomi.com/business/ Cryptocurrency News & Your Guide to the Blockchain Economy Wed, 07 Aug 2024 06:39:59 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 https://blockonomi.com/wp-content/uploads/2020/07/fav-50x50.png Business News & Updates: Latest Info about Crypto Business from Blockonomi https://blockonomi.com/business/ 32 32 134176212 Bitcoin Miner Core Scientific Expands AI Infrastructure Deal with CoreWeave https://blockonomi.com/bitcoin-miner-core-scientific-expands-ai-infrastructure-deal-with-coreweave/ Wed, 07 Aug 2024 06:39:59 +0000 https://blockonomi.com/?p=100484 TLDR Core Scientific announced an expanded deal with CoreWeave worth $6.7 billion over 12 years. The company will provide an additional 112 megawatts of computing infrastructure to CoreWeave. Core Scientific’s shares rose by 18% following the announcement. The deal represents a shift from bitcoin mining to AI infrastructure for Core Scientific. CoreWeave will finance the [...]

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TLDR
  • Core Scientific announced an expanded deal with CoreWeave worth $6.7 billion over 12 years.
  • The company will provide an additional 112 megawatts of computing infrastructure to CoreWeave.
  • Core Scientific’s shares rose by 18% following the announcement.
  • The deal represents a shift from bitcoin mining to AI infrastructure for Core Scientific.
  • CoreWeave will finance the modifications to Core Scientific’s infrastructure.

Core Scientific, a major player in the bitcoin mining industry, has announced a significant expansion of its partnership with CoreWeave, an AI-focused cloud provider.

The deal, valued at $6.7 billion over 12 years, marks a pivotal shift in Core Scientific’s business strategy from cryptocurrency mining to artificial intelligence infrastructure.

Under the new agreement, Core Scientific will expand its high-performance computing (HPC) infrastructure by 112 megawatts (MW) to a total of 382 MW. This additional capacity will be used to host CoreWeave’s NVIDIA graphics processing units (GPUs), which are crucial for AI and machine learning applications.

The expanded deal is expected to generate an additional $2 billion in revenue over 12 years, on top of the $4.7 billion anticipated from existing agreements. This brings the total potential revenue from the CoreWeave partnership to $6.7 billion, starting in the first half of 2026.

Core Scientific’s CEO, Adam Sullivan, stated,

“We have now contracted with CoreWeave for a total of 382 megawatts of HPC infrastructure, reflecting the strong demand for high-power data center infrastructure and the unique ability of our team to deliver it.”

The announcement had an immediate impact on Core Scientific’s stock price, which surged by approximately 18% following the news. As of the latest report, the company’s shares were trading at $9.74.

CoreWeave will finance all capital investments required to transform Core Scientific’s existing infrastructure into state-of-the-art, application-specific data centers tailored for dense HPC. The modifications are scheduled to begin in the latter half of 2024, with operations expected to commence in early 2026.

This expansion comes at a time when many bitcoin mining firms are retrofitting their existing facilities to serve AI clients. The shift is driven by decreased profitability in crypto mining, particularly following the recent bitcoin halving event.

Core Scientific’s move reflects a broader trend in the industry, as companies leverage their existing infrastructure and power contracts to meet the growing demand for AI computing resources.

The transition from bitcoin mining to AI infrastructure is not without challenges. As Needham analysts pointed out in a May report, much of the existing mining infrastructure would need significant modifications to accommodate HPC requirements.

Despite these challenges, Core Scientific’s Sullivan remains optimistic about the company’s future. He highlighted the planned integration of Block’s new 3-nanometer ASIC chip for next year and the thriving HPC business as key factors in the company’s growth strategy.

This deal represents a turnaround for Core Scientific. In January 2024, the company was emerging from bankruptcy and facing challenges from angry lenders. Since its return to the stock market that month, Core Scientific’s share price has risen by 140%, largely driven by its aggressive push into the AI business.

The company also continues its bitcoin mining operations. In July, Core Scientific mined 411 BTC from its fleet of owned miners, operating around 172,000 BTC miners with a total hash rate of 20.1 EH/s.

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Japanese Firm Metaplanet Announces $58.76 Million Bitcoin Investment Plan https://blockonomi.com/japanese-firm-metaplanet-announces-58-76-million-bitcoin-investment-plan/ Wed, 07 Aug 2024 06:34:15 +0000 https://blockonomi.com/?p=100482 TLDR Japanese firm Metaplanet plans to raise about $70 million through stock rights issuance. The company intends to use $58.76 million of the raised funds to invest in Bitcoin. Metaplanet currently holds around 246 Bitcoins worth approximately $13.4 million. The company is following a strategy similar to MicroStrategy, which has accumulated over 220,000 Bitcoins. Metaplanet [...]

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TLDR
  • Japanese firm Metaplanet plans to raise about $70 million through stock rights issuance.
  • The company intends to use $58.76 million of the raised funds to invest in Bitcoin.
  • Metaplanet currently holds around 246 Bitcoins worth approximately $13.4 million.
  • The company is following a strategy similar to MicroStrategy, which has accumulated over 220,000 Bitcoins.
  • Metaplanet views Bitcoin as a long-term investment and a hedge against currency depreciation.

Metaplanet Inc, a Japanese investment and consulting firm, has announced plans to raise approximately 10 billion Japanese yen (about $70 million) through a stock rights offering.

The company intends to use 8.5 billion yen ($58.76 million) of the raised funds to invest in Bitcoin, significantly expanding its cryptocurrency holdings.

The decision was made during a recent board of directors meeting, where Metaplanet approved a gratis allotment of its 11th series of stock acquisition rights to all common shareholders.

Under this plan, shareholders of record as of September 5 will receive one stock acquisition right per common share. These rights will allow shareholders to acquire Metaplanet common stock at an exercise price of 555 yen (about $4) during the period from September 6 to October 15.

Currently, Metaplanet holds about 246 Bitcoins, valued at approximately $13.4 million. The planned investment would substantially increase the company’s Bitcoin treasury. Metaplanet’s CEO, Simon Gerovich, explained that the firm sees Bitcoin as “the apex monetary asset” and believes it will make a great addition to the company’s treasury.

This move mirrors the strategy employed by MicroStrategy, a Nasdaq-listed business intelligence firm that has been accumulating Bitcoin since 2020. MicroStrategy has raised debt and sold shares to acquire over 220,000 Bitcoins, now worth billions of dollars.

Metaplanet’s decision to invest heavily in Bitcoin is based on two main factors. First, the company sees long-term appreciation potential in the asset. Second, Bitcoin is viewed as a hedge against currency depreciation, particularly important given the recent volatility in the Japanese stock market and the depreciation of the yen against the US dollar.

The Japanese stock market recently experienced its worst one-day drop since 1987 when the Bank of Japan raised rates on short-term government bonds from 0% to 0.25% on July 31. This event led to a significant sell-off in the cryptocurrency market, with Bitcoin and Ethereum seeing price drops of around 18% and 26%, respectively.

Despite these recent market fluctuations, Metaplanet remains confident in Bitcoin’s long-term potential. The company stated, “An increase in Bitcoin prices is expected to strengthen our balance sheet, enhance asset value, and positively contribute to our earnings.”

Metaplanet is also considering future business ventures within the Bitcoin ecosystem. The company suggested it could generate additional income from its Bitcoin holdings by selling covered calls on the digital assets. Additionally, Metaplanet is exploring the possibility of transforming its hotel business to cater to Bitcoin enthusiasts and businesses, offering unique services and new revenue sources.

This pivot towards Bitcoin comes as Metaplanet has strategically exited most of its hotel business, which had been suffering from declining revenue and recurring losses over five consecutive periods.

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Marathon Digital Reports $199 Million Net Loss in Q2 as Bitcoin Production Declines https://blockonomi.com/marathon-digital-reports-199-million-net-loss-in-q2-as-bitcoin-production-declines/ Fri, 02 Aug 2024 09:08:58 +0000 https://blockonomi.com/?p=100343 TLDR Marathon Digital reported Q2 revenue of $145.1 million, missing analyst estimates of $157.9 million The company posted a net loss of $199 million, or $0.72 per share, compared to a $9 million loss in Q2 2023 Marathon’s Bitcoin production decreased 30% year-over-year to 2,058 BTC in Q2 The company’s energized hash rate increased 78% [...]

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TLDR
  • Marathon Digital reported Q2 revenue of $145.1 million, missing analyst estimates of $157.9 million
  • The company posted a net loss of $199 million, or $0.72 per share, compared to a $9 million loss in Q2 2023
  • Marathon’s Bitcoin production decreased 30% year-over-year to 2,058 BTC in Q2
  • The company’s energized hash rate increased 78% to 31.5 EH/s in the second quarter
  • Marathon Digital held over 20,000 Bitcoin on its balance sheet after purchasing an additional $100 million worth

Marathon Digital Holdings, a leading Bitcoin mining company, released its second-quarter earnings report for 2024 on August 1, revealing significant challenges in the post-halving era of cryptocurrency mining.

The company reported revenue of $145.1 million for Q2, falling short of Wall Street expectations of $157.9 million. Despite missing estimates, this figure represents a 78% increase from the $81.7 million reported in Q2 2023. The revenue growth was primarily attributed to a higher average price of Bitcoin mined and revenues from newly acquired hosting services.

However, Marathon Digital faced a substantial net loss of $199 million, or $0.72 per diluted share, a stark contrast to the $9 million loss reported in the same quarter last year. This loss was largely driven by a $148 million fair market value drop in digital assets. Analysts had forecasted an earnings-per-share of -$0.19, but the actual figure missed by $0.53.

The company’s Bitcoin production saw a significant decline, with 2,058 BTC mined during the quarter, down 30% from the 2,926 BTC produced in Q2 2023. On average, Marathon mined 22.9 Bitcoin per day, which is 9.3 less than the previous period. The decrease in production was attributed to several factors, including unexpected equipment failures, increased global hash rates, and the impact of the Bitcoin halving event in April.

Fred Thiel, Marathon’s CEO, acknowledged these challenges in a statement, citing unexpected equipment failures and maintenance issues at their Ellendale site, as well as intensified competition in the mining sector.

“Our BTC production was impacted by unexpected equipment failures and transmission line maintenance at the Ellendale site operated by Applied Digital, increased global hash rate, and the April halving event,” Thiel explained.

Despite these setbacks, Marathon Digital reported some positive developments. The company’s energized hash rate increased 78% year-over-year to 31.5 EH/s in the second quarter, reaching an all-time high. Thiel stated that the company continues to target 50 exahash of energized hash rate by the end of 2024, with additional growth planned for 2025.

Marathon Digital’s financial position remained strong, with $1.4 billion in unrestricted cash, cash equivalents, and Bitcoin as of June 30. The company held 18,488 Bitcoin on its balance sheet at the quarter’s end and subsequently purchased an additional $100 million worth of Bitcoin, bringing total holdings to more than 20,000 Bitcoin.

The challenging quarter led Marathon to sell 51% of its mined Bitcoin to cover operating expenses. The company noted that the average price of BTC mined in Q2 2024 was 136% higher than in the prior year period, helping to offset some of the production declines.

Following the earnings report, Marathon Digital’s stock price fell 7.78%, ending the trading day at $18.14. This decline occurred amid a broader market slide driven by overheated tech stocks.

Marathon Digital’s Q2 results reflect the broader challenges facing the Bitcoin mining industry following the halving event. Other miners, such as Riot Platforms, have reported similar difficulties, with Riot posting an $84.4 million net loss for the same quarter.

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MicroStrategy Reports $123 Million Q2 Loss, Bitcoin Holdings Reach 226,500 https://blockonomi.com/microstrategy-reports-123-million-q2-loss-bitcoin-holdings-reach-226500/ Fri, 02 Aug 2024 08:54:12 +0000 https://blockonomi.com/?p=100341 TLDR MicroStrategy reported a Q2 net loss of $123 million, an improvement from $137 million loss in Q2 2023 The company’s Bitcoin holdings increased to 226,500 BTC, worth approximately $14.7 billion at current prices MicroStrategy’s Q2 revenue was $111.4 million, down 7% year-over-year and below analyst estimates The company introduced a new KPI called “Bitcoin [...]

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TLDR
  • MicroStrategy reported a Q2 net loss of $123 million, an improvement from $137 million loss in Q2 2023
  • The company’s Bitcoin holdings increased to 226,500 BTC, worth approximately $14.7 billion at current prices
  • MicroStrategy’s Q2 revenue was $111.4 million, down 7% year-over-year and below analyst estimates
  • The company introduced a new KPI called “Bitcoin Yield” and targets a 4-8% annual yield from 2025-2027
  • MicroStrategy plans to file for a $2 billion at-the-market equity offering to potentially raise more capital

MicroStrategy, the business intelligence firm known for its significant Bitcoin investments, released its second-quarter earnings report for 2024 on August 1, revealing a mix of financial challenges and strategic growth in its cryptocurrency holdings.

The company reported a net loss of $123 million for Q2, or $5.74 per share, which exceeded analyst expectations of a $0.78 per share loss. While this represents a substantial loss, it marks an improvement from the $137 million loss reported in the same quarter of 2023. The adjusted loss per share stood at $7.62, slightly better than the previous quarter’s $8.26 per share loss.

MicroStrategy’s Q2 revenue came in at $111.4 million, falling short of the consensus estimate of $122 million and representing a 7% decline year-over-year. Despite the overall revenue decrease, the company reported a 21% year-over-year increase in subscription services revenues, totaling $24.1 million for the quarter.

The firm’s Bitcoin strategy remained a central focus of its financial activities. During Q2, MicroStrategy acquired an additional 12,222 Bitcoin for $805 million, bringing its total holdings to 226,500 BTC as of July 31. These holdings, purchased for a total of $8.3 billion at an average price of $36,821 per Bitcoin, are now valued at approximately $14.7 billion at current market prices.

MicroStrategy’s continued accumulation of Bitcoin resulted in an impairment charge of $180.1 million for the quarter, significantly higher than the $24.1 million impairment reported in Q2 2023. It’s worth noting that while new accounting guidelines allow companies to mark their digital asset holdings to market, MicroStrategy has not yet adopted this practice.

The company introduced a key performance indicator called “Bitcoin Yield,” which measures the percentage change over time in the ratio between the firm’s Bitcoin holdings and its diluted outstanding shares. MicroStrategy reported a Bitcoin Yield of 12.2% year-to-date and set a target of 4-8% annually for the next three years.

Looking ahead, MicroStrategy announced plans to file a registration form for a $2 billion at-the-market equity offering to potentially raise additional capital. While the company did not specify the intended use of these funds, historically, such capital raises have been used to purchase more Bitcoin.

CEO Phong Le expressed optimism about Bitcoin’s growing acceptance, stating,

“We are extremely optimistic with the improved understanding of Bitcoin and the increasing support for the ecosystem from bipartisan politicians and institutions on display at the Bitcoin 2024 Conference in Nashville.”

MicroStrategy also confirmed its previously announced 10-for-1 stock split, which will take effect on August 7, 2024. This move aims to make the company’s shares more accessible to investors and employees.

Despite the reported losses, MicroStrategy’s stock showed resilience, rising approximately 1% in after-hours trading following the earnings release.

This suggests that investors may be focusing on the company’s expanded Bitcoin holdings and long-term strategy rather than short-term financial losses.

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Coinbase Reports 104% Year-Over-Year Revenue Growth in Q2, Revenue Surpasses $1.4 Billion https://blockonomi.com/coinbase-reports-104-year-over-year-revenue-growth-in-q2-revenue-surpasses-1-4-billion/ Fri, 02 Aug 2024 08:50:36 +0000 https://blockonomi.com/?p=100338 TLDR Coinbase reported Q2 revenue of $1.45 billion, beating analyst estimates of $1.4 billion Total trading volume increased 146% year-over-year to $226 billion Transaction revenue rose 138% to $780.9 million, while subscription and services revenue grew to $599 million Coinbase reported net income of $36 million, marking its third consecutive profitable quarter The company’s shares [...]

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TLDR
  • Coinbase reported Q2 revenue of $1.45 billion, beating analyst estimates of $1.4 billion
  • Total trading volume increased 146% year-over-year to $226 billion
  • Transaction revenue rose 138% to $780.9 million, while subscription and services revenue grew to $599 million
  • Coinbase reported net income of $36 million, marking its third consecutive profitable quarter
  • The company’s shares rose 3-5% in after-hours trading following the earnings report

Coinbase, the leading cryptocurrency exchange in the United States, reported better-than-expected second-quarter earnings on August 1, 2024, demonstrating continued recovery in the crypto market. The company’s shares rose 3-5% in after-hours trading following the announcement.

For the second quarter of 2024, Coinbase reported total revenue of $1.45 billion, surpassing Wall Street analysts’ estimates of $1.4 billion. This figure represents a 104% increase from the same period last year, highlighting the significant growth in crypto trading activity.

The company’s total trading volume saw a substantial year-over-year increase of 146%, reaching $226 billion. This growth was primarily driven by institutional customers, with institutional trading volume jumping 142% to $189 billion. Retail trading volume also saw a significant spike, increasing 164% to $37 billion.

Coinbase Q2 Earnings. Source
Coinbase Q2 Earnings. Source

Coinbase’s transaction revenue, which is its primary source of income, soared 138% to $780.9 million. This growth was largely attributed to a 130% increase in consumer transaction revenue. However, the result fell slightly short of analysts’ predictions of 141% total transaction growth.

Subscription and services revenue, which includes stablecoin revenue, blockchain rewards, and fees, grew to $599 million. This marked a 17% increase from the first quarter and nearly doubled from Q2 2023. Coinbase partially attributed this rise to its role as a custodian for several asset managers issuing spot Bitcoin exchange-traded funds (ETFs).

The company reported net income of $36 million for the quarter, marking its third consecutive profitable quarter and sixth on an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) basis.

However, this figure included $319 million in pre-tax cryptocurrency losses in its investment portfolio, mostly paper losses due to lower market prices at the end of Q2 compared to Q1.

Despite the overall positive results, Coinbase’s adjusted EBITDA of $596 million fell short of the consensus estimate of $607.7 million. The company’s earnings per share came in at 14 cents, improving from a loss of 42 cents last year but missing the FactSet expectation of 95 cents per share.

Looking ahead, Coinbase provided guidance for Q3 subscription and services revenue to be between $530 million and $600 million, compared to $334 million in the same quarter last year.

The company’s CEO, Brian Armstrong, highlighted the progress made in driving regulatory clarity for the crypto industry in the U.S. and globally during Q2.

“Crypto legislation has become a mainstream issue in the US, garnering bipartisan support, and there is real energy within both the House and the Senate to pass meaningful legislation,” he stated in the shareholder letter.

Coinbase’s role in the growing crypto ETF market was also emphasized. The exchange is serving as the custodian for a majority of the U.S. spot Bitcoin ETFs that launched in January, as well as many of the spot Ethereum ETFs that began trading on July 23.

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Binance Labs Invests in Particle Network’s Chain Abstraction Solution https://blockonomi.com/binance-labs-invests-in-particle-networks-chain-abstraction-solution/ Thu, 01 Aug 2024 09:15:58 +0000 https://blockonomi.com/?p=100308 TLDR Binance Labs has invested in Particle Network, a modular Layer 1 blockchain solution. Particle Network aims to address user and liquidity fragmentation in Web3 through Chain Abstraction infrastructure. The solution offers Universal Accounts, allowing users to maintain a single account and balance across multiple chains. Funding will be used for team expansion, enhancing features, [...]

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TLDR
  • Binance Labs has invested in Particle Network, a modular Layer 1 blockchain solution.
  • Particle Network aims to address user and liquidity fragmentation in Web3 through Chain Abstraction infrastructure.
  • The solution offers Universal Accounts, allowing users to maintain a single account and balance across multiple chains.
  • Funding will be used for team expansion, enhancing features, and launching their L1 Mainnet.
  • Particle Network’s goal is to unify Web3 with “One Account, One Balance, Any Chain.”

Binance Labs, the venture capital arm of leading cryptocurrency exchange Binance, has made a strategic investment in Particle Network, a Layer 1 blockchain solution.

This move signals a step towards addressing one of the most pressing challenges in the Web3 space: user and liquidity fragmentation across multiple blockchain networks.

As the blockchain ecosystem continues to expand with a proliferation of Layer 1 and Layer 2 chains, users and developers face increasing complexity. Managing multiple accounts, bridging assets, and navigating different ecosystems create significant friction, hindering broader adoption of Web3 technologies. Particle Network aims to solve these issues through its innovative Chain Abstraction infrastructure.

At the core of Particle Network’s solution is the concept of Universal Accounts. This feature allows users to maintain a single account and balance across the entire blockchain ecosystem, eliminating the need for manual bridging or managing assets on multiple chains.

The goal is to provide a seamless experience encapsulated in their motto: “One Account, One Balance, Any Chain.”

The investment from Binance Labs will fuel Particle Network’s growth in several key areas. The company plans to expand its global team, enhancing its ability to develop and implement its vision. Additionally, the funds will be used to improve the features and integrations of their Chain Abstraction ecosystem, creating a more robust and comprehensive solution for users. Perhaps most importantly, the investment will support the secure and timely launch of Particle Network’s Layer 1 Mainnet later this year.

Yi He, Co-Founder of Binance and Head of Binance Labs, emphasized the strategic nature of this investment:

“Binance Labs is committed to supporting founders who are building innovative products to onboard the next billion users into Web3. We look forward to supporting Particle Network in their mission to create a smoother and more intuitive user experience for everyday users.”

Pengyu, Founder of Particle Network, expressed enthusiasm about the partnership:

“We are honored to receive this investment from Binance Labs, a true pioneer in driving industry innovation. This partnership is a significant milestone for Particle Network as we work towards advancing the realization of Chain Abstraction and accelerating the mass adoption of Web3.”

The investment comes at a crucial time for the Web3 industry. As the number of blockchain networks continues to grow, the need for solutions that can unify these disparate systems becomes increasingly urgent.

Particle Network’s approach, which includes features like Universal Liquidity and Universal Gas in addition to Universal Accounts, offers a comprehensive solution to these challenges.

By allowing users to pay for gas fees in any token and access liquidity across multiple chains, Particle Network aims to create a more user-friendly and efficient Web3 ecosystem. This could potentially lower the barriers to entry for new users and simplify operations for existing participants in the blockchain space.

The investment from Binance Labs not only provides Particle Network with necessary capital but also lends credibility to their ambitious vision.

As one of the most respected venture capital firms in the crypto space, Binance Labs’ backing could help attract additional partners and users to Particle Network’s ecosystem.

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Tether Profits Soar to Record $5.2B in H1 2024, Equity Nears $12B https://blockonomi.com/tether-profits-soar-to-record-5-2b-in-h1-2024-equity-nears-12b/ Thu, 01 Aug 2024 08:34:30 +0000 https://blockonomi.com/?p=100252 Tether has again proved its strong financial health as it closed the second quarter with $1.3 billion in net operating profits, according to the company’s new report. The gain brings Tether’s total net profit for the first half of the year to $5.2 billion. Tether is holding $4.7 billion worth of Bitcoin and $3.8 billion [...]

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Tether has again proved its strong financial health as it closed the second quarter with $1.3 billion in net operating profits, according to the company’s new report. The gain brings Tether’s total net profit for the first half of the year to $5.2 billion.

Tether is holding $4.7 billion worth of Bitcoin and $3.8 billion in gold!

This profit marks an increase from previous quarters, which was at around $4.5 billion, Tether’s Q1 report shows. In addition to net profit, Tether’s group equity increased by $520 million in Q2 2024, reaching a total of $11.9 billion, the firm stated.

“Tether continues to shatter records with a new profit benchmark of $5.2 billion for the first half of 2024,” said Paolo Ardoino, CEO of Tether. “With Tether Group’s own equity reaching $11.9 billion, Tether has achieved an impressive and unmatched financial strength enabling it to continue leading the stablecoin industry in stability and liquidity.”

Big is Getting Bigger

The majority of Tether’s revenue comes from investments in traditional asset classes, primarily U.S. Treasuries, which includes both direct holdings and indirect exposure. Its Treasury portfolio has surged to approximately $97.6 billion, making it one of the top 20 holders of the U.S. Treasuries. In comparison, Tether reported over $90 billion in Treasury holdings.

While Treasuries are the core investment, Tether also holds Bitcoin and gold. As reported, the company behind the world’s leading stablecoin USDT, holds around $4.7 billion in Bitcoin and $3.8 billion in gold.

According to data from CoinMarketCap, Tether’s USDT is currently dominating the stablecoin market with a market capitalization. The company stated that over $8.3 billion in USDT was issued during Q2 2024.

Tether noted that part of the Q2 profits were reinvested in strategic projects to support the ecosystem. In addition to its core stablecoin operations, Tether has made strategic investments in various sectors, including AI, renewable energy, and Bitcoin mining.

Earlier this year, Tether earmarked approximately $500 million for its expansion into Bitcoin mining. The investment includes building mining facilities in countries like Uruguay, Paraguay, and El Salvador.

The firm aims to decentralize Bitcoin mining and increase its mining capacity to 1% of the Bitcoin network’s hashrate by 2025.

In May, Tether announced a $150 million investment in Bitdeer, a major player in the cryptocurrency mining sector. Under the agreement, Tether will support Bitdeer’s expansion of data centers and the development of new mining technology.

The deal is part of Tether’s ongoing efforts to enhance its operational capabilities in Bitcoin mining.

Competition From USDC

CCData’s recent report shows that the stablecoin market capitalization has surged for ten consecutive months. As of July 2024, the market cap exceeded $164 billion.

With market cap surge comes increasing dominance.Stablecoins now account for almost 7% of the overall cryptocurrency market. In contrast, stablecoin trading volumes decreased by 8.35% in July, potentially due to factors like MiCA regulations and overall exchange activity.

USDT remains the largest stablecoin with a market dominance of 69.6%, but Circle’s USDC has seen substantial growth in market cap and trading volume. The second-largest stablecoin now accounts for 73.5% of the market share among the top 10 stablecoins.

USDC’s spotlight is on the Solana blockchain. It is the leading stablecoin on Solana, surpassing USDT in trading volume.

According to Bankless, USDC’s strong presence on Solana has been driven by its strategic partnerships and initiatives, like Solend (now Save), Superteam, Circle’s Cross Chain Transfer Protocol (CCTP), or Circle’s Web3 Services.

In addition, USDC’s early compliance with MiCA regulations has boosted its trading activity on centralized exchanges.

The impact of MiCA compliance is becoming more evident. While it shows little influence on USDT’s dominance, the situation may change over time. Tether has not registered as a stablecoin issuer under MiCA, meaning that the firm cannot legally operate or provide services to EU residents under the new regulatory framework.

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Class Action Lawsuit Prompts DraftKings to Shut Down NFT Platform https://blockonomi.com/class-action-lawsuit-prompts-draftkings-to-shut-down-nft-platform/ Wed, 31 Jul 2024 09:25:40 +0000 https://blockonomi.com/?p=100211 TLDR DraftKings has shut down its NFT-powered fantasy sports experience Reignmakers and associated marketplace, citing “recent legal developments.” The closure comes after a federal judge allowed a class action lawsuit to proceed, alleging DraftKings’ NFTs were unregistered securities. Users can receive a cash payout for relinquishing their NFTs or withdraw them to a self-custodial wallet. [...]

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TLDR
  • DraftKings has shut down its NFT-powered fantasy sports experience Reignmakers and associated marketplace, citing “recent legal developments.”
  • The closure comes after a federal judge allowed a class action lawsuit to proceed, alleging DraftKings’ NFTs were unregistered securities.
  • Users can receive a cash payout for relinquishing their NFTs or withdraw them to a self-custodial wallet.
  • DraftKings’ NFT business had generated $280 million in total sales since its launch in 2021.
  • The decision follows a trend of legal challenges for NFT platforms, with NBA Top Shot recently settling a similar lawsuit for $4 million.

Fantasy sports and betting giant DraftKings has abruptly ended its NFT-powered fantasy sports experience, Reignmakers, and its associated marketplace. The company cited “recent legal developments” as the reason for the immediate discontinuation in an email to users on July 30, 2024.

The closure comes just weeks after a significant legal setback for DraftKings. In early July, Judge Denise Jefferson Casper of the United States District Court for the District of Massachusetts ruled that a class action lawsuit against the company could proceed to trial.

The lawsuit, filed in March 2023, alleges that DraftKings’ NFTs were offered as unregistered securities under the Howey Test, a legal framework used to determine whether an asset qualifies as a security.

Judge Casper found that the plaintiffs “plausibly alleged that DraftKings’ NFTs satisfy three prongs of the Howey test,” including the investment of money in a common enterprise where an expectation of profit is derived from the efforts of others.

This ruling denied DraftKings’ motion to dismiss the case, paving the way for a potential landmark trial that could reshape the NFT landscape.

DraftKings launched its NFT marketplace on the Ethereum scaling network Polygon in 2021, during the height of the NFT craze.

The Reignmakers platform allowed users to compete in fantasy sports contests across football, golf, and mixed martial arts using NFTs. The value of these digital assets sometimes fluctuated based on athletes’ performances and could be resold on a dedicated marketplace.

According to data from CryptoSlam, DraftKings’ NFTs generated $280 million in total sales, including secondary market trades, since its launch. The project saw its best month in September 2023, with $21 million in total sales across 30,000 unique buyers as the NFL season kicked off.

In response to the shutdown, DraftKings is offering users two options for their NFTs. They can either receive a cash payout for relinquishing their NFTs or withdraw them to a self-custodial wallet. The company stated that NFTs and “Reignmakers digital game pieces” will remain accessible and transferable during the discontinuation process.

The decision has met with mixed reactions from users. Some expressed frustration and disappointment, with one Reddit user stating, “I will never spend another dollar at this dumpster fire.” Others raised concerns about potential financial losses, wondering if the cash payout would be less than the amount they had spent on the NFTs.

DraftKings’ legal troubles reflect a broader trend of challenges facing NFT platforms. In June 2024, Dapper Labs, the company behind NBA Top Shot, reached a $4 million settlement with disgruntled holders of its NFTs in a similar lawsuit alleging unregistered securities offerings.

The closure of DraftKings’ NFT business comes at a time when the overall NFT market is experiencing a downturn.

According to CryptoSlam’s data, July 2024 is set to see the lowest monthly sales volume for NFTs since November 2023, with only $407.8 million in sales so far, marking a 74.6% fall from March’s 2024-record of $1.6 billion.

In a statement, DraftKings emphasized its commitment to innovation and disruption in providing gameplay experiences for customers.

The company added that Reignmakers and the NFT marketplace “saw immediate success upon launch” but maintained that discontinuing the service was “the right course of action” given the current legal climate.

The post Class Action Lawsuit Prompts DraftKings to Shut Down NFT Platform appeared first on Blockonomi.

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Starknet-Based ZKX Protocol Shuts Down Citing Economic Challenges https://blockonomi.com/starknet-based-zkx-protocol-shuts-down-citing-economic-challenges/ Wed, 31 Jul 2024 09:19:33 +0000 https://blockonomi.com/?p=100205 TLDR ZKX Protocol, a derivatives trading platform on Starknet, is shutting down due to lack of user engagement and falling revenues. The protocol had raised $7.6 million in funding just a month ago from various investors. ZKX has delisted all markets, closed positions, and returned funds to users’ trading accounts. The protocol’s ZKX token has [...]

The post Starknet-Based ZKX Protocol Shuts Down Citing Economic Challenges appeared first on Blockonomi.

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TLDR
  • ZKX Protocol, a derivatives trading platform on Starknet, is shutting down due to lack of user engagement and falling revenues.
  • The protocol had raised $7.6 million in funding just a month ago from various investors.
  • ZKX has delisted all markets, closed positions, and returned funds to users’ trading accounts.
  • The protocol’s ZKX token has fallen 96.4% from its all-time high shortly after launch in June.
  • Founder Eduard Jubany Tur cited minimal user engagement, decreased trading volumes, and broader exhaustion in the DeFi sector as reasons for closure.

ZKX Protocol, a social derivatives trading platform built on the Ethereum Layer-2 network Starknet, has announced its closure. The decision comes just weeks after raising significant funding, highlighting the volatile nature of the decentralized finance (DeFi) sector.

Eduard Jubany Tur, the founder of ZKX, announced the shutdown on July 31, 2024. In a post on social media platform X, Tur explained that the protocol could no longer find an “economically viable path” forward. The closure comes as a surprise to many, considering ZKX had secured $7.6 million in a strategic funding round just last month.

The protocol, which aimed to create a scalable decentralized exchange for perpetual trading, faced several challenges that led to its demise. Tur cited minimal user engagement as a primary factor, noting that only a few individuals were participating in the protocol’s rewards program. Additionally, trading volumes had “significantly decreased,” with daily revenue barely covering a fraction of the cloud server expenses.

In response to these challenges, ZKX has taken immediate action. The protocol has delisted all markets, closed all positions, and returned funds to each user’s trading account. Users have until the end of August to transfer their funds from their trading wallets to the protocol’s main self-custodial account on Starknet.

The ZKX token, launched in June 2024, has experienced a dramatic decline in value.

According to data from CoinGecko, the token fell 37.8% in the 24 hours following the shutdown announcement. More strikingly, it has lost 96.4% of its value since reaching an all-time high of $0.62 a day after its launch on June 20.

ZKX price at Coingecko
ZKX price at Coingecko

Tur acknowledged that the token generation event (TGE) “didn’t meet expectations,” contributing to the protocol’s current situation. As major token holders exercised their right to cash out, the token’s value continued to decline, making it impossible to “sustainably support” the protocol.

The closure of ZKX reflects broader challenges in the DeFi sector. Tur pointed to “broader exhaustion” in the industry, suggesting that the market is undervaluing the work done and infrastructure built by blockchain applications and ecosystems like ZKX.

Despite these setbacks, ZKX had previously garnered support from notable investors in the crypto space. The protocol had received backing from companies such as StarkWare, Amber Group, Huobi, and Crypto.com. Individual investors included Sandeep Nailwal, Co-Founder of Polygon, and Ashwin Ramachandran, General Partner at DragonFly Capital.

Tur expressed gratitude for the support received from the Starkware team and the Starknet Foundation throughout the development process. He also acknowledged the ZKX community, which he described as both a source of support and pressure.

The shutdown of ZKX raises questions about the sustainability of DeFi projects, even those with significant funding and industry support. It highlights the challenges of maintaining user engagement and generating consistent revenue in a rapidly evolving and competitive market.

As the protocol winds down operations, the team has implemented a sunset period lasting until the end of August. Vesting and distribution will continue after September 1, 2024. Users can make withdrawals through the Starkway Bridge.

The post Starknet-Based ZKX Protocol Shuts Down Citing Economic Challenges appeared first on Blockonomi.

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Polymarket Integrates with Substack, Launches News Publication Amid Betting Surge https://blockonomi.com/polymarket-integrates-with-substack-launches-news-publication-amid-betting-surge/ Wed, 31 Jul 2024 08:41:59 +0000 https://blockonomi.com/?p=100191 TLDR Polymarket has partnered with Substack to launch “Polymarket Embeds” The integration allows Substack writers to embed live Polymarket odds into their posts Polymarket has also launched its own Substack publication called “The Oracle” Polymarket’s trading volume in July 2024 exceeded $360.9 million, triple the previous month The U.S. presidential election is driving much of [...]

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TLDR
  • Polymarket has partnered with Substack to launch “Polymarket Embeds”
  • The integration allows Substack writers to embed live Polymarket odds into their posts
  • Polymarket has also launched its own Substack publication called “The Oracle”
  • Polymarket’s trading volume in July 2024 exceeded $360.9 million, triple the previous month
  • The U.S. presidential election is driving much of Polymarket’s activity, with over $400 million wagered on its outcome

Polymarket, the popular cryptocurrency-based prediction market, has announced a new partnership with publishing platform Substack.

The collaboration introduces “Polymarket Embeds,” allowing Substack writers to integrate live betting odds directly into their content. Simultaneously, Polymarket has launched its own Substack publication, “The Oracle,” as part of its expansion into news and analysis.

The integration enables Substack publishers to embed Polymarket wagers into their posts, displaying real-time odds on various events. For instance, writers covering the 2024 Paris Olympics can include markets related to specific events or athletes’ chances of winning, based on Polymarket users’ predictions.

David Rosenberg, Polymarket’s VP of business development, explained the rationale behind the move:

“We hope that readers can better understand global events through a probabilistic lens and make more informed decisions.”

This integration aims to enhance reporting by providing a quantitative view of topics being covered, while also making stories more visually appealing.

The launch of Polymarket Embeds coincides with a significant surge in the platform’s activity. July 2024 has seen Polymarket’s trading volume exceed $360.9 million, more than triple the previous month’s figures, according to data from Dune Analytics. This dramatic increase is largely attributed to the upcoming U.S. presidential election, which has become a major focus for Polymarket users.

Indeed, political events, particularly the U.S. election, are driving much of Polymarket’s current activity. More than $400 million has been wagered on the outcome of the presidential race alone, highlighting the platform’s growing influence in political forecasting.

While the Substack integration and increased activity around the Olympics are expected to diversify betting topics, politics remains the primary driver of Polymarket’s growth. The platform has gained attention from mainstream media outlets, with publications like The Washington Post, Bloomberg, and The New York Times citing Polymarket in their election coverage.

Polymarket’s launch of “The Oracle” marks a step in the company’s mission to help people make sense of world events through market-based predictions. The publication will focus on notable markets and provide in-depth analyses of trending topics, leveraging the vast amount of data generated by Polymarket’s users.

Rosenberg described The Oracle as a “significant step” in Polymarket’s broader mission. The publication aims to highlight interesting market movements, compare the political judgment of pundits and experts against the collective wisdom of traders, and encourage readers to view world events through a probabilistic lens.

In its inaugural post, The Oracle outlined its goals, stating,

“Our goal is to help you understand the world more clearly through the lens of prediction markets.”

The publication positions itself as a tool to combat misinformation and restore trust in information sources, arguing that prediction markets can effectively fight against “bullshit, clickbait, and propaganda” by rewarding accurate predictions and punishing inaccurate ones.

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