The Breakdown First Five - Thursday, August 1, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Marcus on the Trump Train

Lightspark founder and former Libra head David Marcus wrote an extensive thread explaining his political 180. The lifelong Democrat is now endorsing Trump, becoming the latest high profile crypto figure to back the former President. Meanwhile Harris seems to be gaining significant ground and could soon become the frontrunner. Did crypto folks buy the top on Trump? 

4. Gender Gap

New research from Pantera Capital found that women in crypto make 15% more than men. The interesting reversal of the typical pay gap was largely driven by women in the industry being more experienced and more senior on average. This suggests the industry still has a massive problem with hiring women for entry level positions. Still, it’s nice to see women in crypto being compensated appropriately compared to other industries. 

3. Tether Knockout Half

Tether declared an absurd $5.2B in profit for the first half in their latest attestation report. Net operating was down quarter over quarter at $1.3B for Q2 compared to $4.5B in Q1. They are now claiming an $11.9B net equity value, up from $7 at the end of last year. Net USDT issuance of $8.3B means Tether was the only major stablecoin to grow in Q2. Stablecoin reserves are now claimed to be overcollateralized by $5.3B.

2. Juiced Stocks

With a September rate cut more than priced in, stocks soared, putting in their best day in 5 months. The S&P 500 was up 1.6% with the Nasdaq clocking in at a 2.6% gain. Hardware led the way with Broadcom rallying 12% and NVIDIA gaining 13%. The 2 year yield dropped 10 basis points to hit 4.3%, suggesting the Fed needs to get moving. 

1. Implied Guidance

July’s Fed meeting featured Jerome Powell stopping just short of confirming the first rate cut in September. On inflation he said the job is not done, but upside risks aren’t played out in the data. On the labor market he was more stark, stating the “downside risks to the employment mandate are real now.” If macro data continues at the current pace, the implication was that rates will be cut, but the FOMC wants to see another handful of data points to confirm.