January 31, 2024

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Good afternoon. Of course, the first week after doxxing ourselves, my (Luke’s) new Twitter account gets suspended randomly, for no reason. So much for the world knowing my name!

In all seriousness, c’mon Twitter, step it up. It makes no sense. I’m almost at Max Keiser-level frustration here.

Meanwhile, Dillon’s Twitter account is still alive and well. Give him a follow if you haven’t yet.

Today’s Big Stories:
🦢 Swan hints at IPO
💸 OpenSea for sale?
💵 US Gov’s BTC Auction
💣️ Tether Mints Record Profits

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_{Today's newsletter is 911 words, a 3.5-minute read.}

Will Swan Be the Next Crypto Company to IPO?

2024 is shaping up to be a year for crypto IPOs with Swan Bitcoin being the latest to throw their hat in the ring.

The details: In an announcement last week, Swan’s CEO Cory Klippsten, stated that the company is actively working to raise a Series C and achieve a public listing within the next 12 months.

By the numbers: In December, fresh off a $205 million fundraise, Swan announced that it was generating $125 million in annualized revenue, a number it expected to grow to $200 million in 2024.

Driving the news: Swan also announced the launch of Swan Mining, which was previously operating in stealth mode and has already mined 750 BTC to date.

Mining since only 2023, Swan announced it is already supplying 4.5 exahash to the Bitcoin network, meaning that around 1 in 100 BTC mined globally is mined by Swan.
Swan Mining has plans to bring its total capacity to more than 8 exahash by March. By comparison, leading miner Marathon Digital is at >24 exahash.

What they’re saying: Rapha Zagury, CIO at Swan and head of Swan Mining said: “Swan Mining developed and deployed at warp speed. Our understanding is that this is the fastest-ever initial deployment of hashrate at this scale in Bitcoin history."

Looking back: While growing quickly, with the backing of supporters such as Lyn Alden, Swan isn’t immune to controversy and problems.

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OpenSea Hangs a For Sale Sign

Once valued at more than $13 billion, NFT exchange OpenSea may now be up for sale.

The details: Speaking to DL News this week, CEO Devin Finzer stated that the company is open-minded about being acquired stating, ”we think that if the right partnership comes along, then that’s something we should certainly consider… we like to keep our options open.”

Finzer clarified in an email after the interview that, “We have no plans to be acquired, nor are we looking for a suitor. If something came up, we’d keep an open mind, but that is pure conjecture.”

Down, but not out: In November, hedge and venture fund Coatue Management wrote down the value of its $120 million stake in OpenSea by 90% to $13 million. This after leading the company’s Series C.

In it’s heyday, OpenSea accounted for more than 90% of the NFT market volume. But, since the launch of competitor Blur combined with the overall collapse of the NFT market, OpenSea’s market volume has dropped to ~25%.

Why it matters: While the overall cryptoasset market has seen a modest rebound, the NFT market has been slow to recover. OpenSea putting a small “for sale” sign on the door indicates they may have more of an impact inside of a company with more network effects.

US To Sell Silk Road Haul

The gist: The US government is auctioning off nearly 3,000 bitcoin (~$130 million) seized from Silk Road criminals and a rogue Secret Service agent. While it's the first major US crypto sale this year, onlookers say it's a drop in the bucket compared to recent Grayscale ETF outflows.

Key details:

The bitcoin haul comes from former Secret Service agent Shaun Bridges' forfeiture.
The sale represents just 1.5% of the government's ~215,000 Bitcoin stash (worth ~$9 billion).

Zoom out: The U.S. government holds a significant amount of Bitcoin from criminal cases, including the 94,000 bitcoin seized from the 2016 Bitfinex hack (which will now be an Amazon film 🙂), the 69,000 bitcoin originally seized from Silk Road, and the 51,000 bitcoin seized from Silk Road hacker James Zhong.

Bottom line: This is but a small step in the government’s cryptoasset management dance. With a sizeable bitcoin stash, any future sales could have a large impact on the market. But for now, it's just a blip on the radar.

Bonus: Remember Tim Draper? In 2014, he bought around 30,000 BTC (worth ~$1.2 billion today) in a government auction for roughly $18 million. Wonder if he’ll be back for seconds…

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Tether Rakes in Record Profits

Tether (USDT), the king of all stablecoins, is printing money.

The gist: According to its latest attestation report, the company raked in a record $2.9 billion net profit in Q4 2023, thanks to booming interest from treasuries and the appreciation of their bitcoin and gold holdings. Q4’s windfall also allowed Tether to accumulate enough excess reserves to cover the entirety of their risky secured loans, easing some community concerns.

Key details:

Net profit soared to $2.9 billion in Q4, accounting for nearly half of Tether's $6.2 billion net profit for all of 2023.
Excess equity: The profit increased Tether's excess reserves by $2.2 billion to a total of $5.4 billion.
- Excess equity > remaining secured loans: With only $4.8 billion in outstanding secured loans at the end of 2023, Tether can now claim they are “widely overcollateralized” from highly liquid assets.
Hoarding BTC: Tether also acquired an additional 8,888 bitcoins in Q4, increasing its total holdings to about 66,465 (worth ~$2.8 billion).
T-bill & chill: The company’s total exposure to US Treasury’s now stands at $80.3 billion, or about 83% of its total assets.

Crazy stats:

Ryan Selkis (d/acc) 🇺🇸 @twobitidiot

Tether's net profits are now 10% of JPMorgan's.

Tether has ~50 employees, and JPM has 250,000.

Paolo Ardoino 🍐 @paoloardoino

Tether Q4/2023 attestation is out.

My summary:

- profit for the quarter: $2.85B, of which ~$1B in net operational profit (mainly US t-bill interests), ~$1.85B from gold and #bitcoin holdings.

- total profit for 2023: $6.2B.

- cash & cash equivalents cover now 90% of all… twitter.com/i/web/status/1…twitter.com/Tether_to/stat…

Jan 31, 2024

1.33K Likes 226 Retweets 43 Replies

Matt Hougan @Matt_Hougan

Tether made more money last quarter than Goldman Sachs.

Tether: $2.85 billion
Goldman: $2.01 billion

Jan 31, 2024

262 Likes 52 Retweets 16 Replies

The king of stables: Since Tether’s last assurance, the company’s market cap has grown by ~$8 billion. Meanwhile, their largest competitor, Circle’s, market cap has fallen by more than $300 million.

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Tweet Of The Week

Yassine Elmandjra @yassineARK

10 years ago, Bitcoin mining was a hobbyist activity.

Today, it generates more annual revenue than some of the largest publicly traded companies in the world.

Spotify, eBay, Hermes, Chipotle, Hertz, and Hilton all generate less annual revenue than bitcoin miners.

Jan 23, 2024

1.18K Likes 291 Retweets 93 Replies

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