Kalam Crypto #73: Abu Dhabi To Start Mining Bitcoin & Tether Profits Soar

"It is impossible for a man to learn what he thinks he already knows." Epictetus

Ahlan wa sahlan, and welcome to the 73rd edition of CoinMENA's weekly newsletter, Kalam Crypto. This week, Abu Dhabi announces large-scale bitcoin mining operations, Tether reports monster Q1 profits & reinvests 2% of it in bitcoin, and Ethereum staking rewards reach 8.6%, the highest since the Merge. All that and more, so let's dive into this week's letter, and talk crypto:

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Local News 📍

Abu Dhabi announces large-scale bitcoin mining operation: Zero Two, a digital assets infrastructure development firm backed by Abu Dhabi’s sovereign wealth fund announced a partnership with Marathon Digital, a U.S.-based Bitcoin mining company, to launch a state-of-the-art bitcoin mining facility. The collaboration aims to establish the Middle East's first large-scale immersion-cooled Bitcoin mining operation. The project will begin by constructing two mining sites, with a total capacity of 250 MW of mining power, utilizing excess energy in Abu Dhabi. The flexibility of bitcoin mining’s energy consumption is expected to increase the stability of Abu Dhabi’s electrical grid by utilizing/monetizing excess energy during supply peaks and can be powered down quickly when needed during demand peaks.

Global News 🌍

Tether Reports ~$1.5 Profit in Q1: Stablecoin issuer Tether announced a net profit of $1.5 billion in the first quarter, surpassing its previous quarter's profit by more than double. Tether generates income by earning interest on US treasuries while offering 0% interest to depositors. As interest rates rise, Tether's profits increase. Tether has also begun reinvesting some of its profits and excess reserves into Bitcoin, acquiring approximately 52,670 Bitcoin during Q1. Gold and Bitcoin make up around 4% and 2%, respectively, of Tether's total reserves. Tether's consolidated total assets amounted to at least $81.8 billion as of May 9, while its consolidated total liabilities amounted to $79.4 billion reflecting excess reserves of at least $2.44 billion — an all-time high.

Circle refuses to hold long-dated U.S. treasures: Circle, the issuer of the USDC stablecoin, has decided not to hold longer-dated Treasurys due to concerns about the possibility of a U.S. government default on its debts. CEO Jeremy Allaire cited his worries about the U.S. politicians' ability to reach an agreement on raising the debt ceiling. While the U.S. has never defaulted on its debt, Circle's decision reflects a cautious approach shared by others in the market. 

Keep an eye on 👀

Ethereum staking rewards highest since the “Merge”: The recent surge in on-chain gas fees driven by the meme-coin frenzy has led to Ethereum's staking rewards rate reaching a post-Merge record high of 8.6%. Validators earned 24,997 ETH (equivalent to $46 million) in the first week of May, marking a 36% increase compared to the previous week. This increase in rewards has resulted in a significant boost in income for validators. 

Lightning Round ⚡️

Argentina adds more restrictions on crypto: Argentina has imposed further restrictions on cryptocurrencies, complying with recommendations from the International Monetary Fund (IMF). With an inflation rate exceeding 100%, many view cryptocurrencies, particularly stablecoins, and bitcoin, as a lifeline in Argentina.

Ethereum becoming more censorship resistant: The percentage of Ethereum's OFAC-compliant blocks, which comply with the Office of Foreign Assets Control regulations, has decreased to 27% from 80% since November 2022. This decline indicates a decrease in the potential for protocol-level censorship.

Tweet Of The Week 🐥

CoinMENA News 🗞

🔷1 ETH Giveaway to 4 winners: Join the CoinMENA Trading Competition now and trade your way to 1 ETH 🏅! To participate, all you have to do is place 1 trade this month for a minimum of $10, that’s it!

👀CoinMENA will list 3 new digital assets: From meme coins to stablecoins, there's something for everyone. Check out our social media for hints! 

💰500 reasons to signup and verify your account on CoinMENA: Verify your account this week between (May 12 - and May 18) and 5 of you will qualify for the $500 prize.

Quiz Corner ✅ 

Last week’s question:  What is the minimum amount of ETH you have to stake to become a validator?

Answer: 32 ETH

This week’s question: What is the purpose of Bitcoin mining?

A) To check for viruses

B) To verify transactions 

C) To break up bitcoins into smaller pieces

See the answer in next week’s newsletter. Or check out our new learning platform https://university.coinmena.com/