The second-largest cryptocurrency, ether, which powers the Ethereum blockchain, has abruptly caught up to bitcoin's rally, driven by digital asset treasury companies accruing over 2 million ether since June.

Why it matters: In past bull markets, the prices of ether and bitcoin have made very similar moves, but that broke down quite a bit over the last year.

• Catch up quick: Bitcoin started to tick up in late 2023 as it became clear it would get spot ETFs, and that upward trend has basically continued (in BTC's volatile way), setting new all-time highs every few months.
• Ether's last all-time high, meanwhile, remains back in 2021.

The big picture: Bitcoin is just money. Ethereum is basically a giant tech company, except it doesn't have a CEO, office or a board.

• "Several of the biggest narratives that drove Ethereum's 2021 performance had decayed significantly in 2024, such as NFTs, web3 and metaverse," Alex Thorn, head of research at Galaxy Digital, says.
• Over the past month, however, ether has benefited from some of the same factors that have been fueling bitcoin.

Driving the news: Ether decisively broke the $4,000 price barrier last week, a level it had only touched twice before — briefly — in the past three-plus years. This morning, it is trading at over $4,400.

• There's been a lot of buying going on. Yesterday, more than a billion dollars worth of exchange-traded ether products were purchased, according to CoinShares. A record.
• Such purchases this year have already nearly doubled from last year.

What's happening: Certain companies pursuing a cryptocurrency accumulation strategy have started buying piles of ether, led by Bitmine Immersion Technologies (BMNR) and Sharplink Gaming (SBET).

• The theory of these companies is that they can accrue more cryptocurrency per share over time using financial engineering, without diluting investors.
• Which means that, in theory, one purchase of stock will grow its holdings of an underlying cryptocurrency over time.
• Collectively, these companies are approaching 2% of total supply with a giant new purchase of 317,000 ETH announced by Bitmine.

A friendlier SEC also looks likely to approve ether ETFs, earning a small yield for token holders on-chain, which should make the products a bit more attractive to investors.

What they're saying: "For years, Ethereum has lived in the shadow of its elder sibling, Bitcoin," Houston Morgan, from multichain investing platform ShapeShift, says.

• "But that era is ending. ETH is on the cusp of stepping into its own spotlight. Ethereum price action is increasingly driven by its own fundamentals."

By the numbers: Bitcoin and ether have seen roughly similar gains since the start of the year, despite ETH lagging for most of that period.

• However, ETH has a ways to go to truly catch up. Bitcoin is closing in on 300% in appreciation since the beginning of 2024.
• Ether is close to doubling its price over the same period, which is very good, but still a long way behind bitcoin.

The bottom line: Ether remains 9% away from setting a new all-time high, but it's risen that much in the last few days.

• However, Bitcoin is about 3% away from setting its own fresh record.

"We should take concrete steps to protect people's ability not only to communicate privately, but to transfer value privately, as they could have done with physical coins in the days in which the Fourth Amendment was crafted."

Circle just completed its first quarter as a public company, reporting $658 million in returns on its stablecoin reserves — its main source of profit — while holding onto $251 million of that after distribution costs.

Why it matters: Circle, based in the U.S., is the world's second-largest stablecoin issuer after Tether, one that is moving fast to establish a beachhead in a new regulatory landscape as many larger players are expected to enter the space.

Between the lines: Circle's largest distribution cost is to Coinbase, where it splits any revenue earned on the reserves for stablecoins that are held on the crypto exchange.

• So the more USDC is held on Coinbase, the more it cuts into Circle's earnings.
• Circle's margin, after distribution costs, was 38%.

How it works: Circle's profits are largely derived from earnings on the assets that it holds — mainly short-term U.S. Treasuries and cash — to back its stablecoin, USDC, in circulation.

• It also earned $23.8 million in other revenue for the quarter.

By the numbers: There was an average of $61 billion in USDC in circulation through the quarter, with 90% growth from last year's second quarter.

• Circle's revenue increased 53% year-over-year.
• It recorded a loss of $482 million for the quarter, driven primarily by costs incurred by running its initial public offering.

The impact: Circle's stock is trading up around 3.5% at noon ET. Its market cap of $41 billion amounts to around 63% of the value of the market cap of USDC.

Flashback: In June, the company completed an IPO in which it sold 19.9 million shares at $31, earning net proceeds of $583 million.

The bottom line: Its chief competitor, Tether, which is not publicly traded, reported in a quarterly attestation that it earned $4.9 billion in profit in Q2, on a circulating supply of $157 billion in USDT, so Circle has a long way to go to catch up.

🌪️ Tornado Cash developer Roman Storm was found guilty on one of three counts. (DL News)

👋 Bo Hines, the crypto point man under David Sacks in the White House, will return to the private sector. (X.com)

👨‍🏫 Harvard and Brown universities bought bitcoin ETF shares, totaling over $100 million. (Decrypt)

💵 Stablecoin issuer Paxos has applied for a national trust charter. (Decrypt)