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.
COINBASE ACQUIRES FAIRX: In a Wednesday blog post, Coinbase (COIN) announced the acquisition of FairX, a CFTC-regulated derivatives exchange or Designated Contract Market. "Through this acquisition, we plan to bring regulated crypto derivatives to market, initially through FairX's existing partner ecosystem," Coinbase said. "Over time, we plan to leverage FairX's infrastructure to offer crypto derivatives to all Coinbase customers in the US. We want to make the derivatives market more approachable for our millions of retail customers by delivering an easy-to-use user experience that Coinbase is known for." The acquisition is subject to customary closing conditions and reviews and is expected to close in Coinbase's first fiscal quarter.
Additionally in a Monday blog post, Coinbase Chief People Officer L.J. Brock said the company is giving employees four “recharge” weeks off this year. The move will see nearly the entire company shut down to avoid work piling up. The goal of the time off is to balance out the company's "intense work culture" and long hours, Brock said, adding that "Four weeks of coordinated recharge time might sound like a lot of time off for a company in hypergrowth, but given the intensity of our work throughout the year, we think this is the best way to ensure our pace is sustainable for the long term."
TESLA TO ACCEPT DOGECOIN FOR MERCH: Tesla (TSLA) CEO Elon Musk said in an early Friday tweet that the company is accepting payment for some merchandise with dogecoin. "Tesla merch buyable with Dogecoin," Musk tweeted.
RIOT INITIATED WITH OUTPERFORM: Northland analyst Mike Grondahl initiated coverage of Riot Blockchain (RIOT) on Thursday with an Outperform rating and $30 price target. Grondahl believes Riot is a thought leader in the asset mining space and is well-positioned for robust growth in the near future.
Meanwhile on Tuesday, DA Davidson analyst Christopher Brendler kept his Buy rating and $45 price target on Riot Blockchain. The drop in bitcoin from $65K to $42K will slow down the company's top-line growth, but its gross margins remain "quite healthy" around 85%, the analyst said. Brendler adds that the downshift in capital availability should benefit the incumbents in crypto mining, supporting his "Survive and Thrive" thesis.
VOYAGER INITIATED WITH OUTPERFORM: Keefe Bruyette analyst Kyle Voigt initiated coverage of Voyager Digital (VYVGF) on Sunday with an Outperform rating and C$19 price target. Voyager offers investors "unique exposure" to growth in the underlying crypto market and "holds a number of meaningful, idiosyncratic opportunities ahead," Voigt said. The analyst sees potential for "material upside" in the stock from the company's international expansion, the launch of an equities brokerage, as well as from new services such as traditional lending.
BAKKT PRICE TARGET LOWERED: Jefferies analyst Trevor Williams lowered the firm's price target on Bakkt (BKKT) to $7 from $13.50 on Wednesday and kept a Hold rating on the shares, citing among other factors the impact to high-growth multiples from a rising ten-year bond yield. He is taking a more selective approach to 2022 in Payments, Processors & IT Services as "the competitive disruption narrative may take a breather," Williams added.
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, 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 1.5% this week at $42,513 in U.S. dollars, according to TradeBlock.
