Tag Archives: crypto market news

Business, Cryptocurrency

Tether Reports Record $13 Billion Profit in 2024, Driven by Bitcoin and Gold Price Surge

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Tether, the issuer of the world’s largest stablecoin USDT, has announced a record-breaking $13 billion in group-wide net profits for 2024. The remarkable financial performance was largely fueled by the company’s extensive holdings in U.S. Treasuries, rising Bitcoin (BTC) prices, and gold investments. With this achievement, Tether continues to solidify its position as a dominant force in the global cryptocurrency ecosystem. According to Tether’s latest quarterly attestation report, certified by BDO Italy, the company’s 2024 profits were generated from three primary sources:

  • $7 billion from U.S. Treasuries and repo holdings: Tether has heavily invested in U.S. Treasury bills, which have provided steady and lucrative returns amid rising global interest rates.
  • $5 billion from unrealized gains on Bitcoin and gold holdings: The surge in BTC and gold prices significantly boosted the company’s asset valuation.
  • $1 billion from other investments: These include diversified assets that contributed to the company’s growing financial reserves.

Tether’s Expanding Asset Reserves and Stability

Tether’s financial stability remains a focal point for the cryptocurrency industry, given the significant role USDT plays in global digital asset trading. The latest attestation revealed that the company’s stablecoin reserves stood at $143.7 billion in assets, measured against $136.6 billion in liabilities. This surplus translates to $7 billion in excess reserves, reinforcing the security of USDT’s backing.

Among its holdings, Treasury bills increased to $94.5 billion, further demonstrating Tether’s investment strategy focused on low-risk and high-liquidity assets. Additionally, Tether’s Bitcoin holdings grew for the first time since March, reaching nearly 84,000 BTC, valued at approximately $7.8 billion by year-end. With a market capitalization of $140 billion, USDT remains the fourth-largest cryptocurrency and a critical pillar of digital asset trading. Over the past few years, the stablecoin has seen increased adoption, particularly in developing nations, where it is widely used for payments, remittances, and U.S. dollar savings.

However, Tether has recently faced regulatory challenges, particularly in the European Union, where new Markets in Crypto-Assets (MiCA) regulations have led to delistings and suspensions of USDT on several major exchanges. This has resulted in a decline in the token’s circulating supply in certain regions, although its overall market presence remains strong. Amid regulatory scrutiny and increasing global adoption of cryptocurrencies, Tether has announced plans to relocate its headquarters to El Salvador. The Central American nation, under President Nayib Bukele, has emerged as a pro-crypto jurisdiction after becoming the first country to adopt Bitcoin as legal tender in 2021. By moving to El Salvador, Tether aims to establish a more crypto-friendly operational environment and take advantage of the country’s progressive regulatory stance on digital assets. This move is expected to further cement El Salvador’s position as a global hub for cryptocurrency innovation.

The Road Ahead: Challenges and Opportunities

Despite its record-breaking profits and growing influence, Tether continues to navigate a landscape filled with regulatory challenges and industry scrutiny. Key concerns include:

  • Regulatory Compliance: Stricter stablecoin regulations in the EU and the U.S. could impact Tether’s market expansion.
  • Transparency and Audits: While Tether has made strides in disclosing its asset reserves, industry experts continue to call for full independent audits.
  • Market Competition: The rise of alternative stablecoins, including those backed by traditional financial institutions, poses a competitive threat.

On the other hand, Tether’s strategic investments in Bitcoin, gold, and U.S. Treasuries position the company for sustained profitability and resilience in the ever-evolving crypto space. The firm’s decision to move to El Salvador could also enhance its long-term stability by operating in a crypto-friendly jurisdiction. Tether’s record $13 billion profit in 2024 marks a significant milestone in the stablecoin industry, reinforcing its role as a leading player in the digital asset ecosystem. By leveraging investments in Bitcoin, gold, and U.S. Treasuries, alongside strategic moves such as relocating to El Salvador, Tether is shaping its future in a rapidly evolving financial landscape. While challenges remain, the company’s robust asset reserves and expanding market presence suggest that Tether is well-positioned to maintain its dominance and continue serving as a cornerstone of global crypto trading and finance.

Finance, Cryptocurrency

Bitcoin Hits a New High as TrumpCoin Sparks Controversy in the Crypto Community

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As Donald Trump prepares for his second inauguration as President of the United States, the cryptocurrency market is witnessing unprecedented dynamics. Bitcoin, the world’s largest cryptocurrency, surged past the $109,000 mark, reflecting a gain of over 5%. Meanwhile, a newly launched meme coin, TrumpCoin ($TRUMP), has ignited a firestorm of debate in the crypto community.

The emergence of TrumpCoin has sparked discussions about the intersection of politics and finance. Critics argue that the coin undermines the seriousness of cryptocurrencies, turning them into tools for personal and political gain. Moreover, the potential for misuse, such as foreign governments leveraging tokens for influence, raises alarming questions about national security.

The Meteoric Rise of TrumpCoin

TrumpCoin, released on Friday, soared by over tenfold to peak at $75 on Sunday before retreating to around $54 on Monday morning. Despite the slight dip, the token’s market capitalization exceeded an astonishing $10 billion. The official website, however, warns potential buyers with a disclaimer: “$TRUMP is not intended to be an investment opportunity, investment contract, or security of any type.” This has done little to dampen enthusiasm or criticism surrounding the token. Adding fuel to the frenzy, Melania Trump launched her own meme coin on Sunday, which quickly became the top-trending cryptocurrency on CoinMarketCap, overtaking heavyweights like Bitcoin, Ethereum, and XRP.

Donald Trump’s stance on cryptocurrencies has evolved dramatically over the years. Previously critical of digital assets, the President has recently shown signs of support for the industry. In his second term, Trump has promised to ease regulations on cryptocurrencies, a move that could redefine the sector’s landscape in the United States.

Trump’s increasing involvement in crypto is further highlighted by his growing net worth. As of Sunday, the Bloomberg Billionaires Index reported a $700 million increase in Trump’s wealth, bringing it to $7.16 billion. The release of TrumpCoin has been met with a spectrum of responses, ranging from outright mockery to serious concerns about its implications. Below are some notable reactions from industry experts and influencers: Gabor Gurbacs, Founder of PointsVille said “Trump needs to fire his crypto advisors, from top to bottom and replace with people who know what they are doing. The memecoins cost the US, the presidency and his family a lot of credibility and the consequences haven’t even started.”

Commenting on the conversery, Anthony Scaramucci, Founder of SkyBridge remarked “The most dangerous thing about TrumpCoin is what comes next. Now anyone in the world can essentially deposit money into the President’s account with a couple of clicks. Every favor—geopolitical, corporate, or personal—is now on sale, right out in the open.” Sharing his views on the topic, Nigel Green, CEO of deVere Group said “This is a revival of the meme coin trend from 2021 and 2022, where many inexperienced investors were burned by extreme volatility. Without a doubt, investors will get burned by this frenzy too.”

The resurgence of meme coins like TrumpCoin and MelaniaCoin highlights the volatile and speculative nature of such assets. While they generate buzz and attract quick profits for some, the majority of investors risk substantial losses. Experts advise caution and urge the public to distinguish between speculative gambling and sound investing.

As Bitcoin celebrates a new milestone, the debut of TrumpCoin has brought both excitement and skepticism to the crypto market. While some see it as a lighthearted addition, others view it as a troubling trend with far-reaching implications. As Donald Trump embarks on his second term, the world will be closely watching how his administration’s policies shape the future of cryptocurrencies.