As bitcoin, ethereum and other cryptocurrencies get increaspang 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.
COINDESK ACQUIRES TRADEBLOCK: CoinDesk announced Tuesday it has acquired TradeBlock, a provider of digital asset reference rates. The company said, “With this acquisition, CoinDesk is positioned to be the leading source of crypto news, information and data for the financial industry. Currently, more than $20B of investment products use TradeBlock indexes, and billions of dollars in monthly trading volume is quoted against them.” CoinDesk will invest in the index and data business and in TradeBlock’s order management platform and enterprise trading tools, building for the long-term to serve TradeBlock's growing list of institutional clients. At the same time, it will continue to invest in expanding its mass global audience for news and events, as well as TradeBlock’s institutional-grade data and reference rates. With the acquisition, TradeBlock becomes a wholly owned subsidiary of CoinDesk that will operate completely independently of the media operation. This will allow both firms to maintain TradeBlock's existing commitment to data security and confidentiality for its clients and to safeguard the integrity of CoinDesk’s journalism in keeping with our independence guidelines. The entire TradeBlock team will stay with the company in the acquisition. CoinDesk's parent company, Digital Currency Group, was a minority shareholder in TradeBlock prior to the deal.
PAYPAL, COINBASE INVEST IN TAXBIT: TaxBit, which offers cryptocurrency tax automation software targeted for crypto users, exchanges and merchants, announced Thursday investment from PayPal Ventures (PYPL), Coinbase Ventures (COIN) and Winkelvoss Capital. The company said, “We are excited to announce new investments from PayPal Ventures, Coinbase Ventures, and existing investor, Winklevoss Capital. These new investments from major fintech companies reinforce the importance of tailored software solutions, like TaxBit, in driving widespread cryptocurrency adoption. Our solutions automate all aspects of cryptocurrency tax compliance for consumers, businesses, and exchanges…This investment will help us achieve our aim of being the most innovative and trustworthy provider of cryptocurrency tax technology.”
BITCOIN PRICES ‘BOON’ TO SQUARE: Mizuho analyst Dan Dolev said rising bitcoin prices are a "boon" to Square's (SQ) revenue in a Thursday note. The analyst estimated that if bitcoin reaches $100,000 by year-end, it could drive nine-times growth in Square's bitcoin gross profit. However, if bitcoin dropped to $10,000, its profit may still double, helped by growing user base and higher engagement, Dolev said. The analyst raised estimates amid bitcoin's recent rally and reiterated a Buy rating on Square with a $300 price target. The note comes after Square posted its federal comment letter regarding FinCEN's proposed rulemaking for transactions involving convertible virtual currency or digital assets on its website on Monday. The company said, “Square would be required to collect unreliable data about people who have not opted into our service or signed up as our customers. This creates unnecessary friction and perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions, driving them to use non-custodial wallets or services outside the U.S. to transfer their assets more easily.”
MARATHON, DMG BLOCKCHAIN TO FORM DCMNA: Marathon Patent Group (MARA) and DMG Blockchain Solutions announced Tuesday they have entered into a non-binding memorandum of understanding to form Digital Currency Miners of North America. The organization will be a U.S.-based non-profit entity whose mission is to create a better mining environment for North American miners, to help improve their financial performance and to create North America's first cooperative mining pool. Marathon Patent Group and DMG's U.S. subsidiary, Blockseer, are working together to establish DCMNA. DCMNA's principal initiative is to create North America's first cooperative mining pool by licensing Blockseer's mining pool to all DCMNA members in a cooperative structure. Mining partners who are members will receive rebates based on the hash rate they contribute to the overall pool, thus improving the mining profitability of DCMNA members. As a founding member of DCMNA and one of North America's largest enterprise Bitcoin mining companies, Marathon will put all of its mining hashrate into the pool.
CLEANSPARK PRODUCES 31 BITCOIN: CleanSpark (CLSK) announced updated total bitcoin mining numbers and revenues on Tuesday following its acquisition of its wholly owned subsidiary, ATL Data Centers. From December 10, 2020, the first full-day of mining following the acquisition, through the end of the calendar year, CleanSpark produced just over 31 bitcoins from its mining activities. Production since the first of the year has exceeded 4.3 bitcoins. bitcoin prices have rapidly escalated to as high as $34,366 over the holiday weekend. The company's bitcoin mining activities have resulted in roughly $873,000 of revenue since the closing of the transaction.
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 (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 40% this week at $41,498 in U.S. dollars, according to TradeBlock.
