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Investor News: Mastercard Takes Target at Cryptocurrencies, Comerica to Settle Fraud Lawsuit
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Banks have recently faced challenges ranging from lawsuits and settlements to adapting payment technology to include cryptocurrencies, and even widespread skepticism in the wake of bank failures. But a strong federal jobs report in early June boosted confidence in the sector, with the market reflecting the positive news at the time.
After two years of high interest ratesinvestors entered 2024 increasingly concerned about deteriorating credit. But loan charge-offs, while rising across the sector, remain low by historical standards. Employment data suggested this trend could continue, supporting bank earnings later in the year.
According to the report, gross domestic product increased at an annual rate of 1.3% in the first quarter of 2024, after increasing 3.4% in the last quarter of 2023. Office of Economic Analysis. The Federal Reserve Bank of Atlanta forecast June 7 growth in the second quarter of 3.1%.
Investors have shifted their attention away from concerns that a strong job market will lag Fed policymakers‘ decision to cut interest rates to benefit banks from a strong economy, analysts said. They noted that after raising rates several times in 2022 and early last year to fight inflation, Fed officials have kept rates unchanged since July and continue to signal that their next move will be a rate cut. taxi.
Fed officials said as much in statements this spring Weak labor markets could accelerate rate cuts but continuing strong conditions would not automatically trigger alarm bells, given that inflation has fallen from a peak of 9% in 2022 to nearly 3% this year. The Fed is aiming for 2% and at this stage is focusing more on inflation data than on employment. The Fed will “obviously take these numbers into consideration,” but the latest jobs data is “unlikely to shake policymakers off their already charted path,” said Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown.
To know more: Is the Fed’s tough approach to real estate too tough?
Elsewhere in the industry, payments companies, including PayPal AND MasterCard, are leading efforts to generate greater demand to expand cryptocurrencies beyond the most knowledgeable and tech-savvy users and early adopters. One of the biggest problems with consumer adoption of cryptocurrency and digital assets have been the user experience, according to James Wester, research director for digital assets and cryptocurrencies at Javelin Strategy & Research.
“It is not intuitive to send and receive cryptocurrencies using most Crypto walletsand the consequences of a mistake, such as sending the wrong cryptocurrency to the wrong type of wallet, is the potential loss of assets,” Wester recently told American Banker.
That does it cryptocurrency according to Wester, an unattractive option for most payment types, especially considering how many other familiar payment methods are already available.
To know more: How close is the payments technology industry to a breakthrough?
“With his cryptographic credentials, MasterCard is trying to solve both the challenge of sending and receiving cryptocurrencies and the potential of sending cryptocurrencies to the wrong type of crypto address,” he said. “These are the types of solutions that cryptocurrencies will need to address issues related to the clunky experience user.”
Visa and Mastercard have pursued the cryptocurrency goal by focusing on the acceptance of stablecoins, working with governments on central bank digital currencies, and simplifying credentials to access blockchain-based products.
Find out more about the recent issues facing the banking sector and what they mean for investors.
The 20 best-performing publicly traded banks with less than $2 billion in assets
American Banker publishes an annual list of the best-performing publicly traded banks with less than $2 billion in assets using data compiled by consultancy Capital Performance Group. The ranking is based on 2023 year-end data and uses institutions’ three-year average return on average capital, or ROAE, to determine the ranking.
For 2024, FFB Bancorp tops the list, moving up from position No. 4 last year. The Fresno, California-based institution’s ROAE was 29.7%, about double the top 100’s median of 14.87%. For all publicly traded banks with less than $2 billion in assets, the median ROAE was 10.91%.
To know more: The 20 best-performing publicly traded banks with less than $2 billion in assets
New York City’s new leadership faces tough questions from shareholders
New York Community Bancorp’s new executive leadership team introduced itself to shareholders on June 5, answering questions from those who have lost substantial value on their investments.
One shareholder wanted to know why investors should approve the additional capital, coming from an investment group led by former Trump administration Treasury Secretary Steven Mnuchin. Although the capital infusion was announced on March 6 and closed six days later, the New York community was necessary to obtain shareholder approval to finalize the transaction due to the amount of shares it plans to issue.
“If the capital increase had not been ready that very afternoon, the company’s chances of survival would have been in danger,” CEO Joseph Otting told shareholders at the meeting. “Looking back today, it was the right decision for the company, it was the right decision for investors, and collectively we will work very hard to restore the value of this company going forward.”
To know more: NYCB’s new leaders face skeptical shareholders in wake of turmoil
Settlement Reached in Comerica Bank Direct Express Case
Comerica Bank has accepted a proposed $1.2 million class action settlement that would end a five-year legal battle against A wealth of 79.4 billion dollars Comerica, which he addressed allegations that he mishandled fraud reportsdid not reimburse customers and did not adequately supervise third-party providers of the Treasury Department’s Direct Express program. Most of the 4.5 million Americans who use Direct Express do not have a bank account and receive their Social Security, Veterans and other benefits electronically on prepaid debit cards each month.
Comerica and Conduent, a large conglomerate and call center operator based in Florham Park, NJ, denied any wrongdoing. Nonetheless, the two companies did not track the fraud complaints and were unable to identify and provide the court with the names of beneficiaries who had filed fraud complaints over a four-and-a-half-year period, according to the report. 97-page agreement proposal.
“Defendants expressly reserve their position that Direct Express customers with claims such as those alleged in this case cannot be identified without careful file-by-file analysis and a thorough individual investigation,” the proposed settlement states.
To know more: Comerica to Settle Direct Express Fraud Class Action for $1.2 Million
Bank stocks reflect the optimism that emerged from the recent federal jobs report
A positive June 7 federal jobs report led bank stocks to advance, with the KBW Nasdaq Bank Index up less than 1% on the day the report was released, but up nearly 2% intraday. It increased 6% year to date through the first week of June.
Analysts said the favorable data reflected employers’ confidence in growth and continued economic strength in 2024, following a solid gross domestic product performance last year. A strong economy typically allows borrowers to make payments on loans, and banks, in turn, report low levels of credit losses.
“The U.S. economy continues to be resilient,” Henk Potts, market strategist at Barclays Private Bank, recently told American Banker’s. Jim Dobbs. Potts expects the 4% unemployment rate to peak and remain “low by historical standards” through 2024.
To know more: Banking stocks advance thanks to robust employment gains
Mastercard’s plans to coordinate digital payments and cryptocurrencies
Mastercard says it can create parity between digital and cryptocurrency payment methods, and to that end, it’s adding its scale and name recognition to cryptocurrency credentials, an old concept that attempts to facilitate the way people they identify the binaries involved in cryptocurrency payments.
Mastercard’s crypto credentials use an alias used by crypto exchanges to process cryptocurrency payments, replacing the blockchain addresses normally used. A The blockchain address varies in size and structure, but there are usually between two and three dozen characters that identify the sender and recipient of a cryptocurrency transfer. An alias is a smaller, easier-to-remember identifier that is conceptually similar to an email address.
“There are multiple blockchains out there, all operating on the premise that there is a decentralized infrastructure to provide access,” Raj Dhamodharan, executive vice president of blockchain and digital assets at Mastercard, recently told American Banker’s Giovanni Adami. “This is good and it’s here to stay. But if you want a healthy transaction, what you want is verified identification. We want to put standards behind that verification.”
To know more: Mastercard asks: are cryptocurrencies still too complicated for payments?
Major cryptocurrencies fell in Thursday trading following the Federal Reserve’s decision to keep its key interest rate unchanged. Overnight, the U.S. Federal Reserve kept its key interest rate at 5.25-5.5% for the eighth consecutive time, as expected, while also signaling the possibility of a rate cut at its next meeting in September. The unanimous decision by the Federal Open Market Committee reflects a continued wait-and-see approach as it monitors inflation trends.
CoinSwitch Markets Desk said: “Bitcoin has fallen below $65,000 after the US Federal Reserve announced it would keep interest rates unchanged. However, with markets now anticipating rate cuts at the next Federal Reserve meeting in September, the outlook for a Bitcoin rally by the end of the year has strengthened.”
Meanwhile, CoinDCX research team said: “The crypto market has plunged after the Fed decision. Tomorrow’s US unemployment rate announcement is expected to induce more volatility, with the ‘actual’ figure coming in higher than the ‘expected’ one, which is positive for cryptocurrencies.”
At 12:21 pm IST, Bitcoin (BTC) was down 3.2% at $64,285, while Ethereum was down nearly 4.5% at $3,313. Meanwhile, the global market cryptocurrency The market capitalization fell 3.6% to around $2.3 trillion in the last 24 hours.
“Bitcoin needs to clear its 200-day EMA at $64,510 to consolidate further. Otherwise, a retest of $62,000 could be in the cards,” said Vikram Subburaj, CEO of Giottus.
Altcoins and meme coins, such as BNB (3%), Solana (8%), XRP (5.7%), Dogecoin (5%), Cardano (4.6%), Avalanche (4.3%), Shiba Inu (3.8%), Polkadot (3.4%), and Chainlink (4%) also saw declines.
The volume of all stablecoins is now $71.64 billion, which is 92.19% of the total cryptocurrency market volume in 24 hours, according to data available on CoinMarketCap. Bitcoin’s dominance is currently 54.99%. BTC volume in the last 24 hours increased by 23.3% to $35.7 billion.
(Disclaimer: Recommendations, suggestions, opinions and views provided by experts are personal. They do not represent the views of the Economic Times)
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Altcoins dogwifhat, Bonk, THORChain, and Jupiter have suffered losses of more than 10%, while Bitcoin is down 4% in the last 24 hours.
After a period of relative calm yesterday, July 31, Bitcoin (BTC) price action has seen a drastic change as the cryptocurrency dropped by more than $3,500, bringing its value to $63,300. At the same time, altcoins mirrored this trend, with the total value of liquidated positions rising to nearly $225 million over the course of the day.
Initially, the week started on a positive note for Bitcoin, which reached its highest point since early June, hitting $70,000. However, this peak was short-lived, as it was quickly rejected, leading to a substantial decline, with Bitcoin falling below $65,500.
The cryptocurrency managed to regain some stability, trading comfortably at around $66,800. However, following a Press conference According to Federal Reserve Chairman Jerome Powell, the value of Bitcoin has fallen again to $64,300, down more than 3% in 24 hours.
BTC Price Chart 24 Hours | Source: crypto.news
The recession coincided with a relationship from the New York Times stating that Iran had called for retaliatory measures against Israel following the assassination of Hamas leader Ismail Haniyeh in Tehran, increasing the risk of further conflict in the region.
Meanwhile, on the economic front, the Federal Reserve decided to keep its benchmark interest rates in place, offering little information on a planned September rate cut. Powell also hinted that while no concrete decisions have been made on the September adjustment, there is growing consensus that a rate cut is likely.
Amid Bitcoin’s decline, altcoins have suffered even more significant losses. For example, dogwifhat (Wife) saw a 12.4% drop and (DISGUST) has suffered a 10% drop. Other altcoins such as THORChain (RUNE) also fell by 10%, while Jupiter (JUPITER) and the Ethereum naming service (ENS) decreased by 8% and 9% respectively.
Among the largest-cap cryptocurrencies, the biggest losers are Solana (SOL) with a decrease of 8%, (Exchange rate risk) down 6%, Cardano (ADA) down 4%, and both Ethereum (ETH) and Dogecoin (DOGE) recording a decrease of 4.4%.
Data from CoinGlass indicates that approximately 67,000 traders have been negatively impacted by this increased volatility. BTC positions have seen $61.85 million in liquidations, while ETH positions have faced $61 million. In total, the value of liquidated positions stands at $225.4 million at the time of writing.
Bitcoin mining firm Riot Platforms has released its second-quarter financial results, highlighting a decline in cryptocurrency mined due to the recent halving.
Colorado-based Bitcoin (BTC) mining company Riot platforms revealed its second quarter financial results, highlighting a significant reduction in mined cryptocurrencies attributed to the recent halving event that took place in early April.
The company reported total revenue of $70 million for the quarter ended July 31, a decline of 8.7% compared to the same period in 2023. Riot Platforms attributed the revenue decline primarily to a $9.7 million decrease in engineering revenue, which was partially mitigated by a $6 million increase in Bitcoin extraction income.
During the quarter, the company mined 844 BTC, representing a decline of over 50% from Q2 2023, citing the halving event and increasing network difficulty as major factors behind the decline. Riot Platforms reported a net loss of $84.4 million, or $0.32 per share, missing Zacks Research forecast a loss of $0.16 per share.
Halving increases competitive pressure
The Colorado-based firm said the average cost of mining one BTC in the second quarter, including energy credits, rose to $25,327, a remarkable 341% increase from $5,734 per BTC in the same quarter of 2023. Despite this significant increase in production costs, the firm remains optimistic about maintaining competitiveness through recent deals.
For example, following the Recent acquisition Cryptocurrency firm Block Mining, Riot has increased its distributed hash rate forecast from 31 EH/s to 36 EH/s by the end of 2024, while also increasing its 2025 forecast from 40 EH/s to 56 EH/s.
Riot Platforms Hashrate Growth Projections by 2027 | Source: Riot Platforms
Commenting on the company’s financials, Riot CEO Jason Les said that despite the halving, the mining company still managed to achieve “significant operational growth and execution of our long-term strategy.”
“Despite this reduction in production available to all Bitcoin miners, Riot reported $70 million in revenue for the quarter and maintained strong gross margins in our core Bitcoin mining business.”
Jason Les
Following its Q2 financial report, Riot Platforms shares fell 1.74% to $10.19, according to Google Finance data. Meanwhile, the American miner continues to chase Canadian rival Bitfarms, recently acquiring an additional 10.2 million BITF shares, increasing its stake in Bitfarms to 15.9%.
As previously reported by crypto.news, Riot was the first announced a $950 million takeover bid for Bitfarms in late May, arguing that Bitfarms’ founders were not acting in the best interests of all shareholders. They said their proposal was rejected by Bitfarms’ board without substantive engagement.
In response, Bitfarms She said that Riot’s offer “significantly understates” its growth prospects. Bitfarms subsequently implemented a shareholder rights plan, also known as a “poison pill,” to protect its strategic review process from hostile takeover attempts.
Decentralized finance protocol Aave is seeing a significant spike in whale activity as the market looks to recover from the recent crash that pushed most altcoins into key support areas earlier this week.
July 31, Lookonchain shared details indicating that the whales had aggressively accumulated Aave (AAVE) over the past two days. According to the data, whales have withdrawn over 58,848 AAVE worth $6.47 million from exchanges during this period.
In one instance, whale address 0x9af4 withdrew 11,185 AAVE worth $1.23 million from Binance. Meanwhile, another address moved 21,619 AAVE worth over $2.38 million from the exchange and deposited the tokens into Aave.
These withdrawals follow a previous transfer of 26,044 AAVE from whale address 0xd7c5, amounting to over $2.83 million withdrawn from Binance.
AAVE price has surged over 7% in the past 24 hours amid buy-side pressure from these whales. The DeFi token is currently trading around $111 after jumping over 18% in the past week.
Recently, the price of AAVE increased by over 8% after Aave founder Marc Zeller announced a proposed fee change aimed at adopting a buyback program for AAVE tokens.
Aave v3.1 is available
The total value locked in the Aave protocol currently stands at around $22 billion. According to DeFiLlamaApproximately $19.9 billion is on Aave V3, while the V2 chain still holds approximately $1.9 billion in TVL and V1 approximately $14.6 million.
Aave Labs announced Previously, Aave V3.1 was made available on all networks with active Aave V3 instances.
V3.1 features improvements that are intended to improve the overall security of the DeFi protocol. The Aave DAO governance has approved the v3.1 improvements, which also include operational efficiency and usability for the network.
Meanwhile, Aave Labs recently outlined a ambitious roadmap for the projectwith a 2030 vision for Aave V4, among other developments.
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