As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
SEC’S CLAYTON NEEDS UPGRADES BEFORE BITCOIN ETF APPROVAL: Securities and Exchange Commission chairman Jay Clayton said he has a few concerns that need to be addressed before he is “comfortable” approving the first-ever bitcoin exchange-traded fund, CNBC reported Tuesday. “What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation,” Clayton said. “It’s an issue that needs to be addressed before I would be comfortable…We’ve seen some thefts around digital assets that make you scratch your head. We care that the assets underlying that ETF have good custody, and that they’re not going to disappear.”
COINBASE LAUNCHING INSTITUTIONAL CRYPTO TRADING DESK: Coinbase's head of coverage Christine Sandler said that the company is launching an agency-only OTC desk to let its "Prime" clients execute high volume orders without causing volatility in the public market, Cheddar reported Tuesday. Coinbase, unlike competitors, will not act as a counterparty to trades and will instead match client orders.
AMAZON LAUNCHES AMAZON MANAGED BLOCKCHAIN: On Wednesday, at the re:Invent event, Amazon Web Services (AMZN) announced two new services to help companies manage business transactions that require full auditability. Amazon QLDB is a transparent, immutable, and cryptographically verifiable ledger for applications that need a central, trusted authority to provide a permanent and complete record of transactions. For customers who want to build applications where multiple parties can execute transactions without the need for a trusted, central authority, Amazon Managed Blockchain makes it easy to create and manage scalable blockchain networks using the popular, open source Ethereum and Hyperledger Fabric frameworks.
NASDAQ TO PROCEED WITH BITCOIN FUTURES: Nasdaq (NDAQ) is proceeding with a plan to list bitcoin futures betting on sustained interest despite the cryptocurrency's significant fall over the past year, Bloomberg reported Tuesday. Nasdaq has been working to satisfy the concerns of the Commodity Futures Trading Commission prior to launching the contracts and wants to allow trading in the first quarter of 2019.
OHIO ACCEPTS BITCOIN FOR TAXES: Ohio became the first state where businesses can pay their taxes in bitcoin on Monday, CNBC reported. Ohio’s state treasurer Josh Mandel said the decision will increase “options and ease” for taxpayers and also opens the door to software engineers and tech start-ups. “We’re doing this to plant the flag in Ohio as a national and international leader in blockchain technology,” Mandel said. “We really want to roll out the red carpet and welcome all sorts of blockchain companies to Ohio — not just in the cryptocurrency space but in a variety of different use cases.”
DPW TO SPIN OFF SUPER CRYPTO MINING: On Tuesday, DPW Holdings (DPW) announced that its Board of Directors has authorized the officers of DPW to pursue a spinoff of DPW's wholly-owned subsidiary Super Crypto Mining. The company said the “action demonstrates its confidence in the long-term viability of crypto-mining and the cryptocurrency marketplace and endeavors to provide Super Crypto's management team the tools and independence necessary to achieve and surpass its goals in 2019 and beyond.” The company intends to declare a distribution of shares of common stock of Super Crypto to the stockholders of DPW.
U.S. EXPOSES BITCOIN ADDRESSES OF IRANIANS: U.S. officials will sanction two Iranians and will look to prosecute two others for the “SamSam” cyberattacks that allegedly hacked into servers at over 200 institutions, demanded bitcoin as ransom and laundered the money via online exchanges, the Wall Street Journal reported Wednesday. The Justice Department said the scheme generated over $6M in ransom and led to economic damages of over $30M and The Treasury Department said it hopes the decision will establish new standards for the cryptocurrency industry. The Treasury’s action marks the first time the U.S. has used virtual currency addresses to identify sanctioned targets.
NYSE CHAIR STILL BULLISH ON BITCOIN: Jeff Sprecher, chairman of the New York Stock Exchange and chief executive officer of Intercontinental Exchange (ICE), said that digital currencies have a future in regulated markets despite the recent fall in prices, CNBC reported Wednesday. “Will digital assets survive?” he said, “The unequivocal answer is yes. As an exchange operator it’s not our objective to opine on prices.” Intercontinental Exchange, along with Starbucks (SBUX), Microsoft (MSFT) and BCG, is launching Bakkt, a company that will facilitate bitcoin futures trading by 1Q19. The company was initially expected to launch in November but announced it was delaying the debut to January last week. “To give it the best chance for success we pushed it back to the holidays to give people more time to get on board,” Bakkt CEO Kelly Loeffler said. “It’s a positive indication of the interest and it gives people time to learn. We have a responsibility to do that so we’re taking that extra time…We’re creating that infrastructure that doesn’t exist today, which we think is a big opportunity for institutional investors to come in.”
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), DPW Holdings, Kodak (KODK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin was down about 5.9% this week to $3,970 in U.S. dollars, according to TradeBlock.
