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Tether, issuer of the world’s largest stablecoin, will invest up to 15% of its profits in bitcoin as it shifts its reserves towards crypto and away from U.S. government debt. 

Tether will self-custody all of its bitcoin holdings, the company said in a statement. It held $1.5 billion in bitcoin as of the end of the first quarter, accounting for about 2% of its reserves. About 85% were held in cash, cash equivalents and other short-term deposits — mainly Treasury bills. 

The news comes a few days after Tether reported $1.5 billion in net profit for the first quarter. The stablecoin issuer will now buy bitcoin on a regular basis and further increase its holdings, but it “anticipates that the current and future BTC holdings in its reserves will not exceed the Shareholder Capital Cushion and will further strengthen and diversify the reserves.”

Tether says Bitcoin is ‘a long-term store of value’

Tether said it believes bitcoin is a great investment choice with a track record of “impressive returns over the past decade.” The price of the world’s largest cryptocurrency has soared about 22,000% in the past decade. Bitcoin is currently trading at around $26,750, some 60% below its 2021 peak.

“The decision to invest in bitcoin, the world’s first and largest cryptocurrency, is underpinned by its strength and potential as an investment asset,” Paolo Ardoino, CTO of Tether, said in the statement. “Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential. Its limited supply, decentralized nature and widespread adoption have positioned Bitcoin as a favored choice among institutional and retail investors alike.”

“Our investment in Bitcoin is not only a way to enhance the performance of our portfolio, but it is also a method of aligning ourselves with a transformative technology that has the potential to reshape the way we conduct business and live our lives,” Ardoino added.

Tether’s USDT is the largest stablecoin in the market, with a supply of over 83 billion tokens, according to The Block’s Data Dashboard.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The company, which issues the $82 billion USDT stablecoin, reported $1.48 billion of net profits in 2023 Q1 and revealed $1.5 billion in BTC holdings.

Metaco will continue to operate as an independent business unit led by CEO and founder Adrien Treccani.

Developers from Layer 1 blockchain Near Protocol and Wormhole Bridge are collaborating to create light client solutions for supporting cross-chain transfers using Zero-Knowledge (ZK) proofs.

Near Protocol’s core team will integrate with Wormhole bridge for all of its cross-chain transfers of assets, replacing Near’s use of its main cross-chain bridge called Rainbow, according to an announcement from Near Foundation. This means Wormhole bridge will become the main bridge for all of Near’s cross-chain transfers of assets with the Ethereum mainnet.

Use of Zero-Knowledge Proofs in the integration

Near’s integration with Wormhole will make use of ZK Proofs for additional security of cross-chain transfers between Near and Ethereum. ZK Proofs allow transactions to be validated without revealing any extra transaction details. This provides a way to confirm and verify the state of transfers between Ethereum and Near blockchains securely. However, this process can be computationally heavy, necessitating the use of light client solutions, Near Foundation explained. 

A light client is a version of a full node in a blockchain network that only downloads a fraction of the entire blockchain, while still being able to verify transactions.

Developers from both teams plan to build light client solutions that will delegate most of the computational load required for employing ZK Proofs to an off-chain layer. This strategy, the Near foundation said, will optimize storage and computational resources.

“The integration with Wormhole is aimed at bolstering our multi-chain interoperability by harnessing the power of cutting-edge Zero-Knowledge (ZK) light clients,” the foundation wrote. “By offloading most of the computational load to an off-chain entity, these clients optimize storage and compute resources, paving the way for a streamlined and efficient bridging process.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Binance’s market share has dropped by nearly 15 percentage points in the last few months as the crypto exchange giant says it “don’t feel the need” to take more. 

Binance had a 62% market share in spot crypto trading volumes in February and that has declined to around 47% this month thus far, according to The Block’s Data Dashboard. Nonetheless, Binance remains the largest spot crypto exchange in the world.

“We’ve got a lot of market share right now. We don’t feel the need to capture more market share,” Patrick Hillmann, chief strategy officer at Binance, told The Block in an interview last week. “In fact, we want more competition. Competition is good for the marketplace. It’s good for the industry.”

Binance’s declining market share is caused by factors including the exchange recently ending its zero fees on bitcoin trading and overall tepid trading volumes over the past few months.

“We forecasted a drop in market share once we ended our zero-fee BTC trading promotion for most trading pairs,” a Binance spokesperson told The Block. “This is not a concern for us. We continue to maintain our strong financial performance.”

“Our primary objective is to deliver for our users by maturing our existing products and services and continuing to invest in compliance processes for a new era of regulatory certainty,” the spokesperson added.

Binance offered zero fees from last July to March this year on 13 bitcoin pairs, including BTC/USDT, BTC/BUSD and BTC/EUR. The exchange’s users, however, can still trade bitcoin against stablecoin TrueUSD (TUSD) for free, according to its website.

Binance’s declining market share 

Binance’s sliding market share has coincided with a decline in overall trading volumes. Monthly crypto trading volumes have been below the $1 trillion mark since last October, according to data compiled by The Block. 

Recent U.S. regulatory action against Binance and its co-founder and CEO Changpeng “CZ” Zhao in March might also be a contributing factor.

Meanwhile, Binance rivals including OKX and Coinbase have seen their market share increase a little in recent months.

Earlier this month, Coinbase launched an international derivatives exchange from Bermuda, allowing users to trade perpetual futures with leverage. Earlier today, Coinbase extended a range of services it offers customers in Singapore. The company recently also bolstered its relationship with regulatory authorities in the United Arab Emirates as it faces mounting challenges back home in the U.S.

Binance is ‘rooting Coinbase on’

“We’re rooting Coinbase on,” Hillmann said. “We want them to grow. Seeing them leave the U.S. as a U.S. citizen is really tough for me to see. But if they’re going to be able to now grow at the global level because they’re able to offshore — fine. We need them to be a big player in the space. They’re a good company to have. We need more of those.”

In March, the U.S. Securities and Exchange Commission sent Coinbase a Wells notice alerting the exchange to “possible violations of securities laws.” In April, Coinbase sued the SEC in order to force the agency to respond to a petition that the company filed demanding the SEC publish specific rules for digital assets. Earlier this week, the SEC called Coinbase’s suit “baseless” and said the digital asset industry already has rules and regulations governing it.

Andrew Rummer contributed reporting for this story. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

LMAX Digital and Zodia Custody are to provide institutional-grade trading infrastructure and custody to CoinShares.

India’s government and central bank have received proposals asking to restore access of the Unified Payments Interface (UPI), a widely popular real-time payment system, to the crypto industry.

The dollar valued locked in the open futures contracts tied to AXS has surged to highest since February, signaling an influx of new money into the market.

NFT collections, targeted in new published guidelines, have been gaining popularity in China since the country prohibited the trading of cryptocurrencies.

The Dogecoin network saw a major uptick in daily transactions, reaching a new high of over 719,000 on Tuesday.

This represents a record in Dogecoin’s daily transaction volume, even surpassing that of the Bitcoin network, according to data from BitInfoCharts. The surge is largely credited to users creating meme tokens using frameworks that are influenced by the Ordinals protocol on Bitcoin, also called “Doginals.”

Dogecoin-based meme tokens are based on what’s called the DRC-20 token standard, emulating the functionalities of the BRC-20 token standard on Bitcoin used for minting fungible tokens. This system allows users to embed data into shibes, the smallest unit of dogecoin, thereby enabling the tracking of both fungible and non-fungible tokens within the network. The system is open to anyone and and there’s an apparent rush among Dogecoin users and developers to mint such tokens.

The development has sparked a considerable increase in user activity which started last week, as observed by members of the Dogecoin community. Despite this, the near-term future of meme tokens remains clouded in uncertainty. Unlike their BRC-20 equivalents on Bitcoin Ordinals, which boast a market capitalization exceeding $400 million, meme tokens on the Dogecoin network currently lack a liquid market and a well-defined value proposition.

Several methods exist for minting such tokens. One popular strategy involves DPal, a browser extension wallet for Dogecoin. Numerous users seem to be utilizing this wallet for token minting. But this projects does not offer an “indexer” solution, making it challenging for users determine the number of issued tokens and complicating trading markets that can be built around these tokens.

Adding competition to the mix is the token minting service drc-20.org, a website by a project named Doge Labs that lets users mint tokens on Dogecoin as well. Unlike DPal, Doge Labs purports to be the first inscription service capable of indexing DRC-20 tokens. This feature claims to provide a network-wide database and registry of such tokens needed to allow the trading of these meme tokens.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.