BITCOIN MINING

Riot Platforms Announces Remarkable Earnings From an Unexpected Source

The Scoop: Riot, a Bitcoin mining company, released their July 2023 production and operations update. The company mined 410 Bitcoin. However the really interesting news is how much the company earned NOT mining Bitcoin. Over June and July of 2023, Riot claims to have earned $14.8 million in power credits and $3.5 million in demand response credits.

In Context: The power credits Riot earned come as a result of Riot selling their in-house power generation back to the grid when prices spike.

A Grain of Salt: These are just estimates and Riot certainly has an incentive to overstate how large these payments will ultimately be. That said, these numbers are probably fairly accurate, and Riot is no doubt banking big time on these incentives from the Texas grid. And…it seems Riot is proving how invaluable Bitcoin miners can be to grid stability.

In Riot’s Words:

WHAT WE'RE WATCHING

💵 Tether, a major stablecoin issuer, has revealed that it holds $72.5 billion in US Treasury bills. The company also has an excess reserve of $3.3 billion, according to its Q2 2023 attestation report. This places Tether above countries like the United Arab Emirates and Australia in terms of US debt ownership and the non-nation buyer of U.S. T-Bills.

💰 Coinbase has increased its bond buyback program from $150 million to $180 million. The U.S. cryptocurrency exchange experienced a surge of interest from investors, who tendered $261 million worth of the bonds, a stark contrast to initial low enthusiasm. The bonds are due in 2031 and have a coupon of 3.625%.

🪙 The Financial Accounting Standards Board (FASB) has approved new accounting rules for companies holding crypto. These rules will require companies to report their crypto assets at fair value, offering a more current snapshot of their holdings. The rules will become mandatory for fiscal years starting after December 15, 2024.

⚖️ Grayscale Investments is urging the U.S. SEC to swiftly approve its proposed spot Bitcoin ETF following a court victory. The D.C. Court of Appeals ruled that the SEC must review the application, prompting Grayscale to push for immediate approval. Grayscale lawyers stated, “We hope you will agree that the best use of resources now is for the (SEC) to issue an order approving (the ETF).“

🏦 Coinbase has launched a crypto lending platform targeted at institutional investors in the U.S. This comes as part of its existing Coinbase Prime offering. The move aims to capitalize on the shortcomings in the crypto lending market and comes after the company had to halt its staking program due to regulatory challenges.

PLATFORM HACKS

Stake.com Hacked for $41M; Founder Says Keys are Safe, Resumes Activities

The Scoop: Stake, a leading crypto casino, was hacked, leading to a $41 million loss. The hack targeted a hot wallet used for customer deposits and withdrawals but did not compromise private keys, according to Co-founder Edward Craven.

Founder Clarifies: Edward Craven specified that the hack was a "sophisticated breach" targeting a service used to authorize blockchain transactions. He contradicted earlier speculations by blockchain security experts, insisting that private keys remained secure.

Immediate Actions: Following the breach, Stake temporarily suspended deposits and withdrawals but has since reinstated these features. Craven stated that Stake is fully operational and user funds are secure, albeit the company is in the process of re-securing its wallets.

Contradictory Views: Security experts initially believed that compromised private keys were the most likely cause of the unauthorized withdrawals. However, the absence of typical hacker activities like frontrunning suggests a more complex scenario, leaving the exact nature of the breach still under scrutiny.

POLL

Thursday’s Poll Results

Does you believe Grayscale's win against the SEC makes a spot ETF approval a sure thing?

Yes - 94%

No - 6%

👍 Yes: “Blackrock will get there first.” - Gary

👍 Yes: “Its ABOUT TIME” - Brian

IN THE LOOP

🤔 Twelve years after Nobel laureate Paul Krugman dismissed Bitcoin when it was valued at $7.03, the cryptocurrency has surged dramatically, experiencing a 365,999% increase to around $25,000 per coin. Krugman's early skepticism now stands as a costly missed financial opportunity.

🔄 Crypto exchange Bitfinex holds Bitcoin on its balance sheet, investing part of its trading fee earnings in the cryptocurrency. The move aligns with sister company Tether, which also holds substantial Bitcoin assets.

🔒 A leaked court order from ex-Celsius CEO Alex Mashinsky’s fraud case stipulated that his assets were frozen. The order was initially kept secret to prevent asset drainage. Mashinsky was released on a $40 million bond.

Today’s newsletter was written by Colin and edited by Jordan.