SpaceX Hedges $3T in Stablecoins, Memecoins Dominate 31% of Investor Interest in 2024 and More: Dec 24

Bitcoin is currently priced at $94,885, Bitcoin is down -0.32% in the past 24 hours, while Ethereum trades at $3,422, up +4.30%. The Fear and Greed Index increased from 70 to 73 (Greed) today, still reflecting bullish market sentiment though a bit more greedy than the previous weeks. The crypto industry continues to evolve at a rapid pace, marked by new innovations in interoperability, potential acquisitions in the payments space, major corporate adoption trends, and the expansion of prediction markets in the United States. Elon Musk, the founder of SpaceX is using stablecoins like USDT as a hedge against Forex risks. Memecoins Dominate 31% of Investor Interest in 2024 with $335M in inflows. MoonPay’s possible acquisition of Helio with $150M underscores the growing competition among crypto payment providers. The 70% chance that a Magnificent 7 company will invest in Bitcoin by 2025 highlights the steady rise of institutional interest. Furthermore, Metaplanet's acquires $169M in Bitcoin Holdings with a 309% quarterly yield. 

• MicroStrategy was officially added to the Nasdaq 100 Index today. MicroStrategy acquired 5,262 BTC for approximately $561 million. The company sold 1.3178 million shares last week and still has $7.08 billion worth of shares available for issuance and sale.
• Telegram CEO,  Pavel Durov, reported over $1 billion in total revenue for the year. Premium subscriptions doubled to over 12 million users, while ad revenue also grew significantly.

Read more: MicroStrategy Hits $27B in BTC, Tether Invests $775M in Rumble, Cathie Wood Eyes $1M BTC: Dec 23

Crypto Fear & Greed Index | Source: Alternative.me 

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SpaceX, headed by Elon Musk, who is a well-known supporter of the memecoin DOGE unsurprisingly utilizes stablecoins like USDT. Meanwhile, Tesla’s sizable Bitcoin investment, also attributed to Musk’s guidance, has proved profitable. Its value surpassed $1 billion last month, following the cryptocurrency’s upswing after Donald Trump’s election victory.

SpaceX uses stablecoins to mitigate foreign exchange (forex) risks, as revealed by Chamath Palihapitiya on the All-In podcast on Friday, December 20, 2024. Forex risks stem from currency fluctuations that can impact companies operating across international markets. For instance, a U.S. firm with clients in Brazil risks financial losses when converting payments from Brazilian Real (BRL) to U.S. dollars.

Using Stablecoins as a Hedge

SpaceX collects Starlink payments in "long-tail countries" and converts them to stablecoins, minimizing forex volatility. The stablecoins are later exchanged for dollars in the U.S., eliminating the complexities of wire transfers. Palihapitiya advocates for stablecoins as the primary tool for cross-border transactions, which could disrupt banks' outdated systems and reduce transaction fees. He emphasizes that reducing fees by 3%, such as those charged by Stripe, would significantly boost global GDP.

Palihapitiya said the company re-converts the stablecoins to dollars in the U.S:

“When they [SpaceX] aggregate them [payments] in all of these long-tail countries, they don’t want to necessarily take the foreign exchange risk. They don’t want to deal with sending wires.”

Using stablecoins helps SpaceX mitigate foreign exchange risks and simplifies the payment process by converting payments into stablecoins, which are then transferred to the U.S. and converted back into dollars. This strategy is crucial for regions where local currencies are unstable, making stablecoins a practical tool for transactions. In contrast, developed regions like North America and Europe continue to rely on traditional payment methods. The move aligns with evolving regulatory landscapes, such as the EU's upcoming delisting of Tether's USDT by December 2024 under MiCA regulations. SpaceX's adoption of stablecoins reflects the growing trend of digital currencies in cross-border payments.

Stablecoins vs. Traditional Finance: $1 Billion in Savings Potential

Source: KuCoin

Stablecoin providers like Tether (USDT) and Circle (USDC) are emerging as competitors to banks and payment giants such as MasterCard and American Express. Their solutions simplify international money transfers and storage, reducing costs for users. Aaron Levie, CEO of Box, supports this shift, stating that stablecoins offer a logical alternative to costly traditional systems. Elon Musk, a crypto advocate, further integrates digital assets into his ventures, using stablecoins for SpaceX and enabling cryptocurrency tipping on X (formerly Twitter).

Source: Eleanor Terrett on X

Crypto payments firm MoonPay plans to acquire Helio Pay for $150 million, expanding its merchant services. Helio supports over 6,000 e-commerce merchants and integrates with Solana Pay on Shopify, which sees 138 million monthly users. This acquisition would enhance MoonPay's infrastructure, building on its 20 million-strong user base across 160 countries.

MoonPay recently introduced fiat-to-crypto solutions, such as MoonPay Balance, to simplify interactions with decentralized finance (DeFi). Its rapid expansion includes integrating PayPal on-ramps for European Union and UK customers. Founded in 2018 by Victor Faramond and Ivan Soto-Wright, MoonPay continues to solidify its position as a leader in crypto payments.

Source: Artemis

Memecoins captured 31% of crypto narratives in 2024, quadrupling their popularity from last year. Initially driven by dog-themed tokens, memecoins expanded into personality- and animal-themed categories. Solana hosted over 5 million new memecoins in 2024, generating $335 million in fees.

Memecoins accounted for 14.36% of investor mindshare, surpassing AI-related tokens, which held a 15.67% share. Despite AI's prominence, its tokens underperformed with an 11.6% loss this year. Conversely, memecoins delivered an average annual return of 201%, making them the third most profitable crypto narrative.

Data from Artemis shows that memecoins ranked as the third most profitable narrative in 2024, delivering an average annual return of 201%. This performance significantly outpaced the market's average return of 128%.

Japanese firm Metaplanet exemplifies Bitcoin-focused investment strategies. The company acquired 619.7 BTC for $60.7 million, raising its holdings to 1,761.98 BTC, valued at $169.2 million. Between Q3 and Q4 2024, Metaplanet's Bitcoin yield surged from 41.7% to 309.82%.

Metaplanet projects a 240% revenue increase for 2024, reaching $5.8 million, marking a significant recovery from last year's $1.7 million earnings. The firm also introduced a Shareholder Benefits Program offering unique incentives, including a Bitcoin lottery. These initiatives reflect Metaplanet's commitment to maximizing shareholder value and capitalizing on Bitcoin's potential. Metaplanet's 309.82% yield showcases strength in active Bitcoin investment strategy.

Cryptocurrencies continue to redefine financial systems, from stablecoins enhancing global payment efficiency to memecoins capturing $335 million in fees and companies like Metaplanet driving innovation with 309% yields. These developments underscore the transformative potential of digital assets in reshaping economies and enabling new growth opportunities. As adoption grows, crypto’s role in the global financial landscape will only deepen.