USDt Reaches USD 100B Market Cap
The Daily Crypto Update for Institutional Investors
Tether’s USDt Stablecoin Surpassed A Market Cap Of USD 100B For The First Time - In This AM’s Note, We Highlight Key Stats Related To The Stablecoin
Tether is a highly profitable and viable firm: According to an attestation report for Q4 released by Tether, the firm saw ‘a record-breaking net profit of [USD 2.85B], of which [USD ~1B] in net operating profits (were primarily interests from US Treasuries) with the remaining primarily from the appreciation of Gold and Bitcoin reserves.’ At the annual level, profit in 2023 was USD 6.2B. Additionally, the report showed Tether’s excess reserves registered an all-time high increase of USD 2.2B, totaling USD 5.4B. The firm’s exceptional balance sheet strength bolsters confidence in Tether's main product, USDt. Considering the barrage of unfounded allegations that Tether has found itself under, Tether’s viability and durability have been key to its success.
Anxiety over Tether’s reserves are outdated: Tether critics have often questioned whether the firm truly has the assets it claims back USDt. Media outlets have often spearheaded these doubts. In January, however, Cantor Fitzgerald CEO Howard Lutnick said Tether has ‘the money they say they had.’ The remark was seen as the latest assurance regarding Tether’s reserves. Tether’s February 2021 settlement with the NYAG provided additional transparency and insight into the firm’s reserves. As part of the settlement, the firm voluntarily provided the NYAG ‘information about the composition of Tether’s reserves’ and committed to sharing additional information with the public. In addition, Tether has shared documents from the NYAG case with media outlets under freedom of information requests.
USDt continues to dominate crypto spot trading: Trading against USDt continues to outpace trading against USD. For instance, over the last 24 hours, Binance’s BTC/USDt trading pair has seen a volume of USD 6.19B. BTC/USD trading pairs on Bitfinex and Coinbase, on the other hand, have seen USD 459M and USD 2.94B, respectively, of volume over the same period. In this context, USDt remains a key component of crypto trading and capital flows. USDt has also emerged as an alternative avenue for individuals in emerging markets to gain exposure to BTC. Trading volumes of emerging market currencies like the Brazilian Real, Argentine Peso, or Turkish Lira against USDt are greater than those against BTC (See Chart of the Day in December 14, 2023 issue of ‘24 Hrs in Crypto.’)
USDt has emerged as uncontested stablecoin leader: USDt’s record market cap also corresponds to the greatest difference between its market cap and that of Circle’s USDC stablecoin. USDC’s current market cap is USD 28B, a 50% drawdown from its record high of USD 56B, achieved in June 2022.
CRYPTO HEADLINES
US-listed spot BTC ETFs traded USD ~5.5B in notional volume yesterday, the products’ second largest trading day since their launch. Excluding GBTC, the nine ETFs had nearly USD 1B in inflows, largely driven by Fidelity (CBOE: FBTC) with USD ~405M of net flows, and BlackRock (NASDAQ: IBIT) with USD ~420M. - link - @Cointelegraph
The SEC aims to strengthen its lawsuit against Coinbase (NASDAQ: COIN) by citing a recent court ruling on insider trading involving crypto assets. In a notice to a US judge, the agency referenced a default judgment where a court deemed crypto assets traded on exchanges as securities. This follows a settlement with former Coinbase manager Ishan Wahi and his brother over insider trading charges. The SEC highlights that the trading of cryptocurrencies involved constituted securities transactions according to the Howey Test. - link - @TheBlock
Deutsche Boerse has launched a crypto trading platform for institutional investors. Announced last year and now licensed by German regulators, trading on the platform is set to begin later this week. - link - @Reuters
MicroStrategy (NASDAQ: MSTR) announced a private offering of USD 600M in convertible senior notes. Due in 2030, the sale is limited to qualified institutional buyers, and includes an additional USD 90M option. The notes, unsecured and paying semi-annual interest, may be converted into cash, MicroStrategy class A stock, or both. The company plans to use proceeds to purchase more BTC and for corporate purposes. - link - @MSTR
Coinbase faced technical issues yesterday, showing zero balances to some users amid relatively elevated trading volumes. Despite the bugs and increased latency, Coinbase assures users their funds are secure, attributing problems to traffic surges. The exchange has experienced similar issues in the past, with one occurrence as recent as last week amid increased activity on the platform. - link - @COIN
Stack, a startup building a blockchain-based loyalty point program, has closed a USD 3M Seed round. The raise was led by Archetype, and included participation from Coinbase Ventures, among other investors. - link - @TheBlock
A CryptoPunk NFT sold for 4.5k ETH, worth USD ~16M, on OpeanSea yesterday. The sale of the Ethereum-based NFT is the second highest sale of the entire collection, after a CryptoPunk sold for ~8K ETH, worth USD 23.7M in February 2022. - link - @Cointelegraph
Binance will cease Nigerian Naira services amid regulatory scrutiny in Nigeria, converting remaining NGN balances to USDt. Following investigations and regulatory challenges, Binance will delist NGN pairs and has advised users on options before the service discontinuation. The move comes as Nigerian authorities probe the exchange for unauthorized operations and alleged financial crimes. - link - @CoinDesk
Crypto trading firm DWF Labs plans to buy USD 10M of TOKEN from BNB Chain-based DeFi project TokenFi. The purchase from TokenFi’s treasury will fund new products, including generative AI for NFTs and a smart contract auditor. - link - @CoinDesk
London-based crypto payments startup Baanx has raised USD 20M in Series A funding. Investors backing the raise include Ledger, Tezos Foundation, Chiron and British Business Bank, among others. The company plans to expand its offering to US and LatAm markets later this year with the proceeds. - link - @CoinDesk
Tether announced it has developed a recovery plan to ensure USDt's accessibility and security across multiple blockchains. Currently, USDt operates on nearly 15 networks. The recovery tool facilitates USDt migration between blockchains, ensuring users can manage their assets during blockchain disruptions through a user-friendly process compatible with various wallets. - link - @Tether
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OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
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CRYPTO MULTIMEDIA
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Deribit’s CCO, Luuk Strijers, explains how crypto traders are positioning themselves for upcoming catalysts in the crypto market.
CHART OF THE DAY
USDt's lead over USDC has continued to widen...
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