Summary:
Rumble's shares surged by 300% due to Tether's $775 million investment.
Tether is the third-largest cryptocurrency with a market cap of almost $140 billion.
Tether aims for $10 billion in net profit by 2024.
Rumble aspires to compete with YouTube and AWS, focusing on censorship-free internet infrastructure.
Despite high ambitions, Rumble reported a net loss of $116 million in 2023.
Rumble's Meteoric Rise
Shares of Rumble (NASDAQ: RUM) have skyrocketed to 52-week highs, increasing by approximately 300% since January lows. This surge is largely attributed to a massive $775 million investment from Tether Limited, the powerhouse behind the stablecoin Tether (CRYPTO: USDT).
Tether's Dominance in Cryptocurrency
Tether is the third-largest cryptocurrency globally by market capitalization, trailing only Bitcoin and Ethereum. As of now, Tether's market cap stands at nearly $140 billion. Unlike Bitcoin and Ethereum, Tether is a stablecoin, designed to maintain a 1-to-1 price correlation with the U.S. dollar, making it an attractive option for those wary of cryptocurrency volatility.
Financial Reserves and Profits
As of September 30, Tether reported about $125 billion in reserves, primarily in U.S. Treasury bills. This reserve ensures that Tether can honor redemptions for dollars while also generating profits. CEO Paolo Ardoino announced an impressive forecast of $10 billion in net profit for 2024, showcasing Tether's robust financial health.
Rumble's Ambitious Vision
Rumble aims to disrupt the internet infrastructure landscape, aspiring to compete with giants like YouTube and AWS while promoting censorship-free content. However, achieving such ambitious goals requires significant financial resources. Rumble reported a net loss of $116 million in 2023 and has already incurred losses of $102 million in the first three quarters of 2024.
A Strategic Approach
Despite the losses, Rumble has maintained a disciplined approach by avoiding dilution of shareholder equity and refraining from accruing debt. This strategy could position the company well as it navigates its ambitious plans for growth.
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