Daily Flash | Facebook Reality Labs Suffered $2.81B Losses in Q2, Crypto Market Back On Track For The Bulls After Wednesday Rate Hike

Today's Headline - Meta Loses $2.8B on its Metaverse Division in Q2 Amid Monopoly Lawsuit From the FTC

When Zuckerberg changed Facebook’s name to Meta in the latter half of 2021, he essentially re-oriented the entire company’s ethos towards dominating the metaverse, which is to build an immersive, future version of the internet navigated by digital avatars.

The CEO of Meta is betting his version of the Metaverse will become central to commerce, work, entertainment, and social interaction.

Yesterday in its Q2 earnings call, Meta disclosed that its metaverse-specific division (Facebook Reality Labs) suffered losses of $2.81 billion this quarter. That puts the division’s year-to-date losses at $5.77 billion.

FRL generated revenue of $452 million in Q2, down from $695 million in Q1. That was a small fraction of the $28.4 billion generated in the same quarter from Meta’s family of apps, which includes Facebook, Instagram, and WhatsApp.

Meta’s adjusted quarterly earnings per share for Q2 of $2.46 missed the average estimate of $2.54, while its overall revenue of $28.8 billion fell just short of estimates of $28.9 billion. The company’s overall revenue improved by just over 3% this quarter.

Additionally, on the same day, the FTC filed suit against Meta Platforms in the U.S. District Court for the Northern District of California to block the company’s announced purchase of Within, the VR game developer behind the popular fitness app, Supernatural.

The FTC alleged that Meta is attempting to stifle VR fitness competition from independent studios by purchasing the studio behind the leading app in the space, rather than developing its own rival program. The commission voted 3-2 in favor of filing suit to block the deal.

Meta's shares fell close to 4% to $163.25 in after-hours trading on Wednesday on the results. Shares of Facebook are down more than 50% this year.

Chart of the Day - Top 15 Stablecoins By Market Cap

As of this writing,
Bitcoin (BTC) is changing hands at around $21,821, up 7.89% in the past 24 hours,
while Ether (ETH) is trading at $1,620, or up 12.33% during the same period.
Major altcoins are also showing stellar gains, with Cardano (ADA) up by 8.8%, Solana (SOL) +10.45%, Polkadot (DOT) +15.32%, Avalanche (AVAX) +12.31%, and Cosmos (ATOM) +11.06%.

Notable gainers include:
Lido DAO (LDO) at $2.03 (+40.5%),
Ethereum Classic (ETC) at $32.33 (+28.14%),
Uniswap (UNI) at $8.05 (+21.97%).

Notable losers include:
Chrono.tech (TIME) at $71.73 (-21.18%),
BarnBridge (BOND) at $11.33 (-41.87%),
Numeraire (NMR) at $16.65 (-12.82%).

On Wednesday, the Federal Reserve delivered an interest rate hike of 75 basis points, lifting the target range of its benchmark interest rate to between 2.25% and 2.5%, which met the expectations of analysts.

Depository institutions like banks maintain balances with the Fed, and the federal funds rate determines how expensive it is for them to borrow from and lend to each other using those funds.

Central banks across the globe have been raising interest rates to restore price stability and get rampant inflation under control. In the U.S., the Fed delivered its steepest interest rate hike since 1994 to combat rising prices, which are increasing at their fastest pace in over 40 years.

Katie Talati, head of research at asset management firm Arca, told Coindesk,

"A lot of people are saying that the rate hike right now is baked in just because the Fed has telegraphed for quite a while...and even equity markets have been setting quite a bit.”

Bitcoin and Ethereum were up over the past 24 hours, continuing their two-day streak, increasing by 7.68% and 12.35%, respectively, according to Messari. Bitcoin jumped by 3% in the last hour following the Fed's announcement while ETH increased in price by 4.8%.

Influencer of the Day - Bitcoin Maximalist Michael Saylor Casts Doubt On Ethereum

MicroStrategy CEO and Bitcoin maximalist Michael Saylor spoke remotely at Blockchain Economy Istanbul on Wednesday, elaborating on the question of what he thought of Ethereum.

MicroStrategy holds a stash of 129,218 Bitcoin (BTC) worth about $2.8 billion at current prices. At the conference, he pointed out that Ethereum co-founder Vitalik Buterin said that Ethereum was 40% done and had laid out a roadmap of three to four years, which implies the "protocol doesn’t look like it's going to be completed or stable for another 36 months.”

In addition, Saylor expresses doubt on the ethical soundness of Ethereum,

"'Ethically sound' means I need to know that nobody could change [the protocol], which includes Vitalik. I need to know that no one at the Ethereum foundation, no individual can change the protocol because if they could change the protocol, it makes it a security and if it makes it a security, then it’s not going to become global money.”

Buzzes of Yesterday - #Ethereum Tenth Shadow Fork Goes Live, #Harmony Faces Backlash On Hack Reimbursement Proposal

Solana Set to Open IRL Retail Store and Web3 'Embassy' in New York

Ethereum’s Mainnet Tenth 'Shadow Fork' Goes Live Ahead of September Merge

Curve Finance Seeks One Million OP Token Grant from Optimism

Tether says it holds zero Chinese commercial paper, denies 85% exposure

Harmony Faces Backlash On Proposal To Mint 4.97B Tokens To Reimburse Horizon Bridge Victims

Algorand CEO Steven Kokinos Departs, Interim Replacement Named

Crypto ATM market value to hit $472 million by 2027 per new data

UPenn’s Wharton School Launches Metaverse-Focused Business Course

Japan’s Crypto Lobby Groups Call for Tax Cuts to Stem Talent Outflow

UK Law Commission Sees Crypto as a New Type of Property

Author: Gate.io Researcher Peter L.
This article represents only the researcher's views and does not constitute any investment advice. Gate.io reserves all rights to this article.
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