Daily crypto: Bearish markets and tether continues to print more money

Tether continues to print more money

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Also; the United States plan on hunting down unregulated crypto exchanges on a global scale. Here are the most important crypto news from the last 24 hours.

ANNONS

Tether, or usdt as its ticker says, has created another 50 million units, which means that there are now over 2.4 billion usdt in circulation. The whole idea with tether is that it has the same value as the U.S. dollar, and the issuer has previously communicated that for every tether created, they are in control of the same amount of U.S. dollar.

Lack of transparency, however, has made many within the crypto community to question if the issuers, Bitfinex and Tether Limited, really could cover all the usdt that has been issued thus far.

If it were to be found out that Bitfinex and Tether Limited has not backed every single dollar as they say, that the companies have been using tether to print new money without backing, this could shake the world of crypto quite a lot and potentially trigger a crypto financial depression.

The U.S. government will “aggressively pursue” unregulated crypto business

National borders don’t seem to be a problem when American authorities now plan to find and hunt down unregulated crypto business. In a speech held on August 9th, Kenneth A. Blanco, Director of the Financial Crimes Enforcement Network (FinCEN), said that the governmental organization will “aggressively pursue” unregulated business that is active within the field FinCEN is set to inspect. This includes companies that don’t have any physical presence in the United States.

Basically, it all comes down to demands that these companies register with the FinCEN, that they follow the guidelines to counteract money laundering and that they have satisfactory systems for bookkeeping and customer knowledge.

It is still unclear if and how this could effect cryptocurrency investors.

Mostly bearish on the crypto markets

The last 24 hours have been quite sprawling when it comes to the crypto markets. On the top five-list, all cryptocurrencies apart from bitcoin (+0,32%) lost value. The biggest loser was ethereum (-3,00%), while bitcoin cash (-0,93%) lost the least.

Amoung the hundred biggest cryptocurrencies, peercoin (+31,89%) was the biggest winner together with nuls (+23,43%) and dentacoin (+14,99%). The biggest losers of the last 24 hours were aurora (-11,60%) and wanchain (-9,20%).

Asset: Price: % (24h)
Bitcoin $6 359,59 +0,32%
Ethereum $316,36 −3,00%
Xrp $0,301201 −2,08%
Bitcoin cash $570,49 −0,93%
Eos $5,04 −1,44%

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MicroStrategy Posts Q1 Profit, Reaffirms Commitment to Bitcoin Investment Strategy

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MicroStrategy, a business intelligence platform, has reported a profit of $94 million in the first quarter of 2023, marking its first quarterly profit since 2020. The company's financial turnaround was largely due to a one-time income tax benefit of $453.2 million. Additionally, MicroStrategy's revenue increased by 2.2% to $121.9 million compared to the same period last year.

Bitcoin Conviction Remains Strong Amid Market Fluctuations

Phong Lee, MicroStrategy’s CEO, emphasized that the company’s “conviction” in its Bitcoin investment strategy remains “strong” as the digital asset environment continues to evolve. Lee also noted that short-term price fluctuations in BTC do not impact the firm’s core business. MicroStrategy’s chairman, Michael Saylor, echoed these sentiments, attributing the successful quarter to the company’s core business model and Bitcoin investment thesis, which he described as the “right strategy.”

Investors Expected to Shift from Crypto Assets to Bitcoin

Saylor predicted that investors will soon exit their positions in crypto assets that are under regulatory scrutiny, which will lead to an increase in funds flowing into Bitcoin. MicroStrategy’s CFO, Andrew Kang, announced that the company had reduced its leverage by repaying a $161 million Bitcoin-backed loan from the now-defunct Silverage Bank, releasing all pledged Bitcoin as collateral.

MicroStrategy’s Bitcoin Holdings and Stock Performance

In Q1, MicroStrategy purchased 7,500 BTC for a total of $179 million. The company now holds 140,000 BTC, collectively acquired at an average cost of about $29,803. With the current price of BTC at $28,100, MicroStrategy’s Bitcoin investment is down by 5.7%. However, the company experienced a brief period in the green when BTC reached its recent high of $30,980 on April 15. MicroStrategy’s stock price has more than doubled in 2023, in line with Bitcoin’s performance.

Embracing Bitcoin Technology and Innovations

The company began investing its cash reserves in BTC on March 5, 2021, when it acquired 91,064 BTC, accounting for 65% of its total holdings today. Saylor recently revealed that MicroStrategy integrated Bitcoin Lightning into his corporate email address. Furthermore, the company is developing a Bitcoin layer-2 Lightning Network-based Software as a Service tool for corporations, showcasing its commitment to both Bitcoin investment and technological innovation.

Bitcoin and Gold: An Unlikely Duo in Turbulent Times

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In times of economic uncertainty and market volatility, Bitcoin has gained recognition as a safe haven asset. Its ability to provide investors with a reliable and secure store of value makes it an attractive option for those looking to diversify their portfolios and safeguard their wealth from external threats.

Bitcoin Gains Traction in the Face of Banking Crisis

As the banking crisis continues to shake the financial world, investors are increasingly turning to Bitcoin as a safe haven. Many are even opting for the cryptocurrency over the traditional safe haven asset, gold, due to its higher returns and enhanced stability. Currently trading near the $30,000 psychological level at $28,936, Bitcoin has recorded an impressive 3% rally in the last 24 hours. This surge in demand is primarily attributed to its rising correlation with gold, which has surpassed the 50% level and now stands at 57%, according to data from market analytics firm Kaiko.

The Steady Rise of Crypto as a Safe Haven Asset

Long considered a risky investment due to its volatile price fluctuations and lack of regulatory oversight, Bitcoin has gradually emerged as a safe haven asset for investors seeking protection against traditional market risks. Operating independently from central banks, Bitcoin is less vulnerable to inflation and government interference compared to fiat currencies and other traditional assets.

Decentralization: A Key Advantage for Investors

Bitcoin’s decentralized nature offers investors greater control over their assets and reduces their exposure to systemic risks. The ability to store and transfer wealth across borders without intermediaries gives Bitcoin a level of financial freedom and security unmatched by traditional assets. Its finite supply and digital scarcity also make it a hedge against inflation, as its value is not subject to government policies or macroeconomic factors.

 

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