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.
GRAYSCALE TOPS $10B IN ASSETS: Grayscale, the world’s largest virtual currency asset manager, announced that assets under management jumped to over $10B amid increased investment inflows and the surge in bitcoin’s price, Reuters’ Gertrude Chavez-Dreyfuss reported Wednesday. Grayscale’s assets soared from $5.9B at the end of Q3 and the company’s bitcoin fund reached roughly $9B in assets on Wednesday. The investment manager reported it largest ever inflows of over $1B in Q3 and since the start of 2020 to Q3, investments into the firm reached $2.4B. “While we’re only midway through the fourth quarter, I can certainly share that momentum has continued to carry through to the fourth quarter and probably accelerated a bit to what we have seen in Q3,” Michael Sonnenshein.
DALIO SAYS HE ‘MIGHT BE MISSING SOMETHING’ ABOUT BITCOIN: Ray Dalio, the billionaire founder of Bridgewater Associates, tweeted on Tuesday that he may be missing something about bitcoin as its price continued to surge. Dalio laid out his concerns with bitcoin in a series of posts, saying, “It’s not very good as a store-hold of wealth because its volatility is great and has little correlation with the prices of what I need to buy so owning it doesn’t protect my buying power.” He added governments could eventually prohibit the digital currency if it begins to compete with the currencies they control. “I can’t imagine central banks, big institutional investors, businesses or multinational companies using it,” he said. “If I’m wrong about these things I would love to be corrected.”
MARATHON SEES POTENTIAL TO PRODUCE 15-20 BITCOINS/DAY: Marathon Patent Group (MARA) released an investor presentation on Wednesday. The presentation's highlights included a balance sheet with $24.6M in cash and no debt, an overview of exclusive partnerships with Beowulf and Bitmain that provide low energy costs and consistent access to the miners and insights into the company's growth strategy. Once all 23,560 miners are deployed in Q2, the company sees potential to produce 15 to 20 bitcoins per day at an average production cost of $3,863 per bitcoin, potential to generate $8.8M in revenue per month and $6.7M in gross profit per month and to produce 2.6 EH/S, which will account for approximately 2% of the global bitcoin hashrate.
PRICE TARGET RAISED AT MICROSTRATEGY: BWS Financial analyst Hamed Khorsand raised the firm's price target on MicroStrategy (MSTR) on Tuesday to $230 from $200 and keeps a Buy rating on the shares. The company used its first investor day to introduce hyperintelligence and its new approach to winning more customers to investors, Khorsand said. The analyst increased the price target to reflect the value of MicroStrategy's bitcoin holdings along with "greater prospects of sales momentum going into what is usually a seasonally strong fourth quarter."
SRAX REPORTS Q3 EARNINGS: On Monday, SRAX (SRAX) reported Q3 loss per share of 45c on a revenue of $2.6M, which compared to a loss per share of 67c on a revenue of $1M for the same period last year. “As the Sequire platform continues to grow and adapt to customer needs, we are seeing a tremendous increase in our recurring revenue stream. Sequire is changing the way public issuers interact with and engage their investors, and it shows. We are pleased to report our first quarter of positive EBITDA from our Sequire segment,” said CEO Chris Miglino. “The whole company is very proud of everything we’ve accomplished this quarter and is excited about the momentum we have going into quarter four. We acquired LD Micro, moved BIGToken to its own public company, and successfully sold our remaining MD asset, which was not on our balance sheet. Additionally, as we are seeing continued addition of our Sequire platform, SRAX is providing guidance of $4M in revenue for the fourth quarter.”
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), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and 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 rose roughly 14% this week at $18,400 in U.S. dollars, according to TradeBlock.
