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Bitcoin eyes record losing streak as ‘stablecoin’ collapse crushes crypto

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© Reuters. FILE PHOTO: Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic/Illustration

SINGAPORE (Reuters) – Cryptocurrencies nursed large losses on Friday, with bitcoin pinned below $30,000 and set for a record losing streak as the collapse of TerraUSD, a so-called stablecoin, rippled through markets.

Crypto assets have also been swept up in broad selling of risky investments on worries about high inflation and rising interest rates. Sentiment is particularly fragile, however, as tokens supposed to be pegged to the dollar have faltered.

Bitcoin, the largest cryptocurrency by total market value, attempted a bounce early in the Asia session and rose 2% to $29,500, something of a recovery from a 16-month low of around $25,400 reached on Thursday.

It remains a long way below week-ago levels of around $40,000 and, unless there is a rebound in weekend trade, is headed for a record seventh consecutive weekly loss.

“I don’t think the worst is over,” said Scottie Siu, investment director of Axion Global Asset Management, a Hong Kong based firm that runs a crypto index fund.

“I think there is more downside in the coming days. I think what we need to see is the open interest collapse a lot more, so the speculators are really out of it, and that’s when I think the market will stabilize.”

TerraUSD (USDT) broke its 1:1 peg to the dollar this week, as its mechanism for remaining stable, using another digital token, failed under selling pressure. It last traded below 10 cents.

Tether, the biggest stablecoin and one whose developers say is backed by dollar assets, has also come under pressure and fell to 95 cents on Thursday, according to CoinMarketCap data.

UNSTABLE

Selling has roughly halved the global market value of cryptocurrencies since November, but the drawdown has turned to panic in recent sessions with the squeeze on stablecoins.

These are tokens pegged to the value of traditional assets, often the U.S. dollar, and are the main medium for moving money between cryptocurrencies or to convert balances to fiat cash.

“Over half of all bitcoin and ether traded on exchanges are versus a stablecoin, with USDT or Tether taking the largest share,” analysts at Morgan Stanley (NYSE:MS) said in a research note.

“For these types of stablecoins, the market needs to trust that the issuer holds sufficient liquid assets they would be able to sell in times of market stress.”

Tether has recovered to parity on the dollar and its operating company says it has the necessary assets in Treasuries, cash, corporate bonds and other money-market products.

But it is likely to face further tests if traders keep selling, and analysts are concerned that stress could spill over into money markets if pressure forces more and more liquidation.

Ether, the second-largest cryptocurrency by market capitalisation, steadied near $2,000 on Friday after a drop as low as $1,700 on Thursday. Bitcoin and ether are about 60% below record peaks reached in November.

Crypto-related stocks have also copped a pounding, with shares in broker Coinbase (NASDAQ:COIN) steadying overnight but still down by half in little more than a week.

In Asia, Hong Kong-listed Huobi Technology and BC Technology Group, which operate trading platforms and other crypto services, eyed weekly drops of more than 15%.

Amid the turmoil, Nomura on Friday said it had begun offering bitcoin derivatives to clients, the latest move by a traditional financial institution into the asset class.

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United Airlines lifts second-quarter revenue forecast

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© Reuters. FILE PHOTO: United Airlines planes are parked at their gates at O’Hare International Airport ahead of the Thanksgiving holiday in Chicago, Illinois, U.S., November 20, 2021. REUTERS/Brendan McDermid

By Rajesh Kumar Singh

CHICAGO (Reuters) – United Airlines Holdings (NASDAQ:UAL) Inc on Monday raised its revenue estimate for the current quarter despite trimming capacity, underscoring a booming travel demand.

The Chicago-based carrier now expects total revenue per available seat mile to be up 23%-25% from the same period in 2019, up from a prior forecast of 17%.

Last month, the airline said it expects to generate the highest quarterly revenue in its history in the quarter through June, helping it return to profit.

While the surge in bookings is largely driven by leisure travelers, office repoenings and easing border restrictions have bolstered the industry’s outlook.

Last week, United said this summer is expected to be the busiest since the pandemic. It estimates nearly 5.3 million customers will fly with United during the Fourth of July holiday period.

Strong consumer demand is also helping United and other carriers deal with soaring fuel costs, which have more than doubled in the past year.

United also raised its fuel bill estimate for the quarter by 17%. It is now projected to increase by about 40% from the first quarter of this year.

Non-fuel operating expense is also expected to be higher than the previous estimate, the company said. United, however, still expects an adjusted operating margin of 10%.

The company has adjusted its plans to ramp up capacity. In the current quarter, it now expects its capacity to be down 14% from pre-pandemic levels.

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Tencent Music Reports Q1 Miss, Revenues Down 15.1%

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© Reuters. Tencent Music (TME) Tencent Music Reports Q1 Miss, Revenues Down 15.1%

Tencent Music Entertainment Group (NYSE:TME) reported its Q1 results, with EPS of $0.06 coming in worse than the consensus estimate of $0.07. Total revenues declined 15.1% year-over-year to $1.05 billion, missing the consensus estimate of $1.23 billion, due to the headwinds in an evolving market landscape.

Revenues from online music services in Q1 were down 4.8% to $413 million. Revenues from music subscriptions grew 17.8% year-over-year to $314 million, with online music paying users reaching 80.2 million (up 31.7% year-over-year) and paying ratio increasing to 13.3% from 12.4% and 9.9% in Q4 and Q1/21, respectively.

Revenues from social entertainment services and others in Q1 were down 20.6% to $635 million.

Shares of Tencent Music were down 40% year-to-date into the results.

By Davit Kirakosyan

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Rivian Automotive CEO Purchases $1 Million Worth of Stock

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© Reuters Rivian Automotive CEO Purchases $1 Million Worth of Stock

According to SEC Form 4, on May 16, Robert Scaringe, the CEO of Rivian Automotive Inc (NASDAQ:RIVN), purchased 41,000 shares of the company’s Class A common stock at an average price of $25.7772. The total amount of purchased shares is approximately $1.05 million.

Following the purchase, Scaringe owns 169,175 shares directly, 4,337,997 through a trust and 4,595 by LLC.

Shares of Rivian are down 76% year-to-date given the correction in high-multiple stocks and supply chain issues faced by the EV maker.

By Davit Kirakosyan

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