U.S. economy shrank 0.5% between January and March, worse than earlier estimates revealed
The U.S. economy shrank at a 0.5% annual pace from January through March as President Donald Trump's trade wars disrupted business, the Commerce Department reported Thursday in a downgrade from its previous estimate.
First-quarter growth sank under a surge of imports as companies in the United States rushed to bring in foreign goods before Trump could impose tariffs on them. The Commerce Department previously estimated that the economy fell 0.2% in the first quarter.
The January-March drop in gross domestic product — the nation's output of goods and services — reversed a 2.4% increase in the last three months of 2024 and marked the first time in three years that the economy contracted. Imports expanded 37.9%, fastest since 2020, and pushed GDP down by nearly 4.7 percentage points. Consumer spending also slowed sharply.
And federal government spending fell at a 4.6% annual pace, the biggest drop since 1986.
Trade deficits reduce GDP. But that's just a matter of mathematics. GDP is supposed to count only what's produced domestically, not stuff that comes in from abroad. So imports — which show up in the GDP report as consumer spending or business investment — have to be subtracted out to keep them from artificially inflating domestic production.
The first-quarter import influx likely won't be repeated in the April-June quarter and therefore shouldn't weigh on GDP. In fact, economists expect second-quarter growth to bounce back to 3% in the second quarter, according to a survey of forecasters by the data firm FactSet.
Thursday's report was the Commerce Department's third and final report on first-quarter growth. The first look at April-June GDP growth is due July 30.
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Coin Geek
31 minutes ago
- Coin Geek
Some block reward miners ditch AI for BTC; others ditch BTC for ETH
Getting your Trinity Audio player ready... Some prominent block reward miners are making major strategic transitions as they try to figure out how to turn an elusive profit from this sector. The BTC network's hash rate has seen a double-digit decline since mid-June, hitting lows not seen since March (and still falling). Theories behind this decline range from Israel's attacks on Iran—a country long rumored to have major mining operations—to the oppressive heatwave gripping the United States. The latter theory involves cost-conscious miners shutting down as electricity prices surge higher and/or local power grids paying miners to switch off their rigs so everyone else can switch on their air conditioning. As always, the answer may lie in a combination of factors, but BTC's recent price resurgence—after slipping below $100,000 for the first time in over a month—is definitely a welcome development. The current cost to mine a single BTC (the full cost, including depreciation of mining rigs) was over $102,000 as of June 23. Also, riding to BTC's rescue is an expected significant drop in the network difficulty level, which is adjusted every two weeks based on hash rate fluctuations. The next adjustment is scheduled for June 29, and current estimates expect a downward shift of up to 9%. That would be the biggest decline since China cracked down on domestic mining operators in 2021. However, competition remains fierce in finding the next block and collecting those rewards. On Tuesday, CleanSpark (NASDAQ: CLSK) announced that it had achieved its mid-year hash rate target of 50 EH/s. CleanSpark is just the second publicly traded miner to eclipse that barrier after MARA (NASDAQ: MARA) crossed that threshold last December. However, international rivals like Australia's IREN (NASDAQ: IREN) and China's Cango Inc (NYSE: CANG) are expected to hit their own 50 EH/s targets in the coming months. So CleanSpark CEO Zach Bradford says the new target is 60 EH/s 'and beyond.' CleanSpark operates over 30 sites across four U.S. states, branding itself as 'America's Bitcoin Miner.' Never enough money The cutthroat competition and precarious mining finances have left operators constantly seeking new capital (even if some are using that capital to buy additional tokens for their BTC treasuries). This week, Hut 8 (NASDAQ: HUT) announced that it had doubled its credit facility with the Coinbase (NASDAQ: COIN) digital asset exchange to $130 million. Hut 8 said the amended and expanded agreement would extend the debt's maturity date to July 2026 while imposing a fixed interest rate of 9%, down from the variable rate that ranged as high as 11.5% over the past 18 months. Hut 8 didn't say how it planned to use its new credit beyond 'near-term opportunities advancing through its growth.' In March, Hut 8 announced it had partnered with President Trump's sons to launch American Bitcoin Corp (ABTC), a new mining/BTC treasury operation comprising 'substantially all' of Hut 8's mining gear. In May, ABTC announced plans to go public on the Nasdaq sometime in Q3 via a merger with Gryphon Digital Mining. The following month, ABTC revealed that it had acquired 215 BTC for its treasury. But there's been no word on ABTC's mining performance since that March announcement. Other miners raising cash include IREN, which closed its upsized $550 million convertible notes offering earlier this month, netting the company just under $535 million. Around $146 million of that haul will go towards servicing future debt obligations, with the rest targeted for general corporate purposes and working capital. Other miners are taking different avenues to raise cash. Riot Platforms (NASDAQ: RIOT) announced earlier this month that it had sold nearly 1.75 million shares in rival Bitfarms (NASDAQ: BITF), earning Riot just under $1.6 million. Last year, Riot began acquiring major chunks of Bitfarms as part of a hostile takeover bid that sought to oust Bitfarms' directors. Riot acquired nearly 19% of Bitfarms before the companies reached a settlement last September, and Riot began selling off bits of Bitfarm. This latest sale brought Riot's stake down to 14.3%. Back to the top ↑ Bit Digital ditching BTC for ETH Bit Digital (NASDAQ: BTBT) announced earlier this week that it was shoring up its finances with a new C$60 million (US$44 million) credit agreement with the Royal Bank of Canada. The company said it would use the funds to expand its AI/high-performance computing (HPC) operations, which have taken precedence over its mining business. Bit Digital's mining revenue totaled $7.8 million in Q1, 31% of its total revenue, down from 72% in the same period last year. However, Bit Digital followed that news on Wednesday by announcing a major 'strategic shift,' saying it was looking to get out of the BTC mining business entirely. The company said it has 'commenced a strategic alternatives process for its bitcoin mining operations that is expected to result in their sale or wind-down.' Instead of BTC, Bit Digital will now focus on the Ethereum network's native token, ETH, with the goal of becoming 'a pure play [ETH] staking and treasury company.' Bit Digital will also 'over time' convert its current 417.6 BTC treasury to ETH, boosting the 24,434 ETH it already holds. Any net proceeds from the wind-down of its BTC mining operations will be similarly converted to ETH. To help grease these wheels, Bit Digital is commencing an underwritten public offering of its ordinary shares. Bit Digital didn't offer any specifics on the size or timing of this offering, nor even if the offering would actually take place. But the proceeds will be used to (wait for it) buy more ETH. In what was clearly a busy day at the Bit Digital offices, the company also announced plans to conduct an initial public offering of its wholly-owned HPC subsidiary WhiteFiber Inc. Here, too, specifics are short, as the company filed its IPO application with the U.S. Securities and Exchange Commission (SEC) on a confidential basis, allowing it to keep facts and figures under wraps for the time being. Back to the top ↑ Canaan ditching AI for BTC On June 23, miner Genesis Digital Assets (GDA) announced a deal with mining rig manufacturer Auradine to buy 1,000 of the latter's Teraflux AT2880-277 air-cooled units. The rigs will be installed at GDA's data center in Glasscock County, Texas, one of 20 locations GDA operates worldwide and part of GDA's U.S. expansion strategy. Auradine has become a more attractive option for U.S.-based miners due to the ongoing impact of President Trump's tariff war. The three largest rig-makers—Bitmain, Canaan Inc (NASDAQ: CAN), and MicroBT—are all foreign-based, and while they're making efforts to establish U.S. roots, ramping up manufacturing capacity is a slow and pricey process. Speaking of Canaan, the company just announced a 'strategic realignment' that will see it 'discontinue its non-core AI semiconductor business unit,' a process the company expects will take a few months to conclude. Going forward, Canaan will focus on 'sharpening its focus on its core businesses of bitcoin mining machine sales, self-mining operations, and consumer mining products.' Canaan's AI operations were a minor contributor to its bottom line, accounting for just $900,000 of its total 2024 revenue of $223.2 million. However, AI accounted for 15% of 2024's operating expenses, and Canaan believes mothballing the unit will result in significant savings. The move distinguishes Canaan from some prominent U.S. miners who have embraced the more predictable revenue streams from AI/HPC operations. Canaan CEO Nangeng Zhang said, 'doubling down on our core strengths in crypto infrastructure and bitcoin mining is the most strategic path forward.' Back to the top ↑ Tether seeks BTC mining crown Tether, the issuer of the market-leading USDT stablecoin, has been talking up its own mining operations for years now without offering specifics as to the success or failure of these operations. However, since May 2024, Tether has steadily increased its stake in Bitdeer (NASDAQ: BTDR) and held a 22.8% stake in Bitdeer as of this April. Earlier this month, Bitdeer announced that Tether had exercised its warrants from that 2024 financing deal, handing Tether another 5.2 million ordinary shares in exchange for $50 million. Tether held ~34 million Bitdeer shares in April, so the warrants represent a significant increase. During his appearance at the recent Bitcoin 2025 Conference in Las Vegas, Tether CEO Paolo Ardoino claimed that Tether had 'invested $2 billion in energy production and Bitcoin mining,' then said the total was actually greater than that. Either way, Ardoino boldly predicted that 'it is very realistic that, by the end of this year, Tether will be the biggest Bitcoin miner in the world, even including all the public companies.' Ardoino went on to suggest that Tether's interest in mining was both altruistic and selfish in that Tether claims to hold over 100,000 BTC and thus has an interest in the integrity of the network. Not long after that speech, Ardoino tweeted that Tether 'will work towards open-sourcing its Bitcoin Mining OS (MOS).' This will allegedly allow new mining companies to 'enter the game' without the need for third-party hosted software, and create 'an even playing field reducing the gap between publicly listed companies and smaller players.' This week, Ardoino went on The Block's Big Brain Podcast, where he repeated his claim of Tether having 100,000 BTC, saying the company needs to be 'part of the Bitcoin mining security team … to protect our own investment.' Ardoino again stated his belief that Tether 'will become the biggest Bitcoin miner out there.' Tether has long been criticized for making claims regarding its finances that require the public to take them at their word (even if that word sometimes proved fraudulent). Tether has also been accused of Photoshopping its logo onto shipping containers that Ardoino claimed contained some of Tether's mining rigs. Ardoino pushed back against these claims, arguing that while the logo was indeed added after the fact, it was only to preserve the 'physical privacy of the site.' Back to the top ↑ Norway says no way? Many countries around the world are dealing with strained electrical grids due to the heavy demands of local mining sites (both legal and illegal). Norway has sufficient energy to serve its citizens' needs, but on June 20, Minister of Digitalization and Public Administration Karianne Tung announced that the government 'has a clear intention to limit the mining of cryptocurrency in Norway as much as possible.' The government is exploring its authority under the energy allocation provisions of the Planning and Building Act to preserve power for other energy-intensive activities, including 'socially beneficial data centers.' This is by no means the first time Norway and Tung have expressed concern about mining's power consumption. Local residents have also expressed outrage over the excessive noise produced by mining sites. Tung said mining is 'very energy-intensive, and yields little in the local community in the form of jobs and income.' By limiting mining's access to local power, Norway 'can free up land, power and grid capacity for other uses that contribute more to value creation, jobs and cuts in greenhouse gas emissions.' Those 'other uses' include AI data centers 'that are a critical prerequisite for digitalization.' Tung also appeared to suggest the potential for a carveout for 'the useful use of blockchain technology,' although no specifics were offered. The government is still studying the matter but expects to come to a decision by 'autumn.' The proposed (temporary) ban appears to be aimed at prohibiting the launch of new mining operations and possibly grandfathering existing sites. These sites have been told to register their operations by July 1 to ensure the government has accurate data with which to make their conclusions. Back to the top ↑ Watch: Teranode is the digital backbone of Bitcoin title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Coin Geek
31 minutes ago
- Coin Geek
$2.5 quadrillion clearing giant DTCC explores stablecoin
Getting your Trinity Audio player ready... The Depository Trust & Clearing Corporation (DTCC), one of the world's largest transaction processors, is exploring a stablecoin to keep up with rising blockchain adoption in finance. A New Jersey-based financial infrastructure company source told The Information that it has been weighing a U.S. dollar-backed stablecoin for faster and cheaper trade settlements. It also believes they could ease the movement of assets across the various markets it operates. In a separate statement to The Block, a spokesperson for the company confirmed the stablecoin venture, describing it as part of its mission 'to protect and advance the global financial markets.' '…we are monitoring policy developments in the U.S. Congress and regulatory agencies, and will continue to assess our options, including the potential of issuing a DTCC stablecoin, if needed, to support the industry's increasing adoption of blockchain technology for use in financial transactions,' the spokesperson said. DTCC is the world's largest clearing and settlement company, serving all major U.S. exchanges and broker-dealers. Together with all its subsidiaries, it processes over $2.5 quadrillion annually, making it one of the key cogs of the global financial plumbing. Just days before the reports, DTCC published a blog post noting that institutional stablecoins and tokenized money market funds are reshaping liquidity in financial markets. '…it is evident that stablecoins are here to stay and will impact not only payments but broader capital markets,' it said, further describing stablecoins as 'a critical component of the evolving capital markets landscape.' However, it acknowledged that stablecoins will only become part of the financial system if regulators implement enabling policies. It singled out the ongoing legal clarifications by U.S. lawmakers and the European Central Bank's (ECB) stablecoin frameworks as some key initiatives that will shape global regulations. It also hailed Bermuda's licensing of recently IPO'd stablecoin issuer Circle (NASDAQ: CRCL). Days before it confirmed its stablecoin plans, DTCC announced a new partnership with Fnality that will integrate the latter's on-chain settlements system into the clearinghouse's digital asset platform. Fnality is a startup backed by major financial players, including the DTCC, Goldman Sachs (NASDAQ: GS), Nasdaq, MUFG (NASDAQ: MBFJF), UBS (NASDAQ: UBS) and more. It provides an on-chain payment system for wholesale financial markets, replacing the slow and inefficient interbank settlement rails. Under the new partnership, the two will enable clients to automatically transfer assets in real time while also eliminating the need for fragmented liquidity accounts. DTCC joins a bevy of financial industry giants targeting stablecoins as the sector records parabolic growth. This week, American fintech giant Fiserv (NASDAQ: FI) launched FIUSD, its new stablecoin, which will be available to over 10,000 financial institutions and over five million merchants. FIUSD is built on stablecoin infrastructure from Paxos and Circle. Earlier this month, it was revealed that Walmart (NASDAQ: WMT) and Amazon (NASDAQ: AMZN) were exploring launching their own stablecoins. The two are the biggest U.S. retailers and, combined, account for over $1.1 trillion in annual revenue. Bermuda's government stablecoin push continues Elsewhere, the island territory of Bermuda continues to warm up to stablecoins. This time, the government has backed an event with a stablecoin airdrop for the attendees. During the Bermuda Digital Finance Forum, attendees who downloaded a digital wallet developed by Coinbase (NASDAQ: COIN) received $100 worth of USDC that they could use to pay for food and drinks at the event. 'We want Bermudians to be part of this growing industry,' Premier David Burt said in a follow-up statement. The government has been working toward making digital finance more accessible, and the event offered the attendees the opportunity to 'experience what the future of money looks like,' he added. Bermuda is a British Overseas Territory in the North Atlantic Ocean with 65,000 residents. Its $8 billion GDP relies almost fully on international businesses, mainly in finance, which set up operations on the island. One of these is Circle, the USDC issuer; after acquiring tokenization platform Hashnote earlier this year, Circle moved it to Bermuda to capitalize on the island's friendly licensing. 'Bermuda is a global gold standard in regulation,' Circle President Heath Tarbert stated as he revealed he would be moving Hashnote from the Cayman Islands. Hashnote operates one of the largest tokenized money market funds, with assets under management hitting $1 billion earlier this year. Watch | Centi: Bridging digital money and traditional banking title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Reuters
33 minutes ago
- Reuters
Lithium industry bemoans 'paradox' of low prices, rising demand
LAS VEGAS, June 26 (Reuters) - An ongoing slide in lithium prices even as demand for the battery metal continues to climb is a frustrating "paradox" not likely to be resolved before at least 2030, the world's largest producers told a major industry conference this week. Once a niche metal used primarily in greases, ceramics and pharmaceuticals, lithium's use in electric vehicles, large-scale battery storage and other electronic applications has grown rapidly, with demand up 24% last year and likely to grow 12% annually for the next decade, according to data from consultancy Fastmarkets. Oversupply from China, however, has dragged prices down more than 90% in the past two years, fueling layoffs, corporate buyouts and project delays across the globe. "We've got market pain, but on the other side is the strategic gain. That is the lithium paradox," Dale Henderson, CEO of Australian lithium miner Pilbara Minerals ( opens new tab, told the Fastmarkets Lithium and Battery Raw Materials Conference in Las Vegas. One long-time conference attendee described the mood at this year's conference using the stages of grief as a metaphor. Last year's conference reflected denial, with the sentiment in 2025 one of acceptance, he said. Despite the price drop, attendance at the conference - considered the world's largest annual gathering of lithium investors, executives and consumers - fell only 9% from last year to roughly 1,000, according to organizers. "It's quite hard to imagine a future where lithium doesn't play a central role in the global economy," said Paul Lusty, head of battery raw materials research at Fastmarkets. Chinese miners have stockpiled supply that likely will only come down later this decade and lessen the market imbalance, he added. Others have seen an even longer timeframe. Project Blue, another minerals consultancy, does not expect lithium demand to exceed supply until 2033 at the earliest. "Lithium has no chill mode. It really is more volatile than a lot of other markets out there," said Peter Hannah, head of pricing at Albemarle (ALB.N), opens new tab, the world's largest lithium producer, which has cut staff and delayed expansion projects in response to the price drop. Much of the conference side chatter focused on efforts to curb spending, with various lithium projects - especially direct lithium extraction (DLE) projects - touting efforts to lower costs. "The issues with lithium are which mines can produce the highest quality product at the lowest cost," said Ken Hoffman, a commodity strategist with mining investment bank Red Cloud Securities. EnergyX, a DLE developer backed by General Motors (GM.N), opens new tab, unveiled a study showing it could produce the metal in northern Chile with operating costs below $3,000 per metric ton. The estimates are preliminary, but underscore the industry's push to spend less. "Innovation is the solution to building a resilient battery supply chain," said Chris Doornbos, CEO of E3 Lithium (ETL.V), opens new tab, which is developing a DLE project in Alberta. Adding to the market tension, SQM ( opens new tab - the world's second-largest lithium producer - laid off 5% of its workforce this week. "We do have other factors impacting the behavior of the market participants than just pure economics," Andres Fontannaz, commercial vice president of SQM's international lithium division, told the conference, a reference to how electric vehicles have become a political target in some countries. The tension is even higher for lithium projects under construction and hoping prices rise by the time they open. "This is a really tough industry to be in," said Jon Evans, CEO of Lithium Americas ( opens new tab, which is building North America's largest lithium mine in Nevada. "It's periods of euphoria followed by periods of pain and suffering, which we're in now."
