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 FINED EUR 3.3M: De Nederlandsche Bank, the Dutch central bank, announced Thursday that on January 8, it imposed an administrative fine of EUR 3,325,000 on Coinbase Europe Limited (COIN). The fine was imposed because Coinbase provided crypto services in the Netherlands in the past without registration with DNB, which is in non-compliance with the law, DNB said in a statement.
Additionally on Tuesday, Mizuho analyst Dan Dolev said a Mizuho survey suggests that, despite January’s bitcoin rally, retail investors continue to shy away from crypto. The survey, coupled with "disappointing" market share data and potential signs of take rate pressure in Q4, may all mean that "more headwinds are brewing" for Coinbase’s 2023 revenue, the analyst said. The firm reiterated an Underperform rating on the shares with 45% potential downside to its $30 price target. With take rates 50-100 times higher than institutional, retail transaction revenue accounted for 83% of Coinbase’s total revenue in 2021, the analyst said.
AKERNA TO MERGE WITH GRYPHON: Akerna Corp. (KERN) announced Friday it will merge with Gryphon Digital Mining in an all-stock deal.
The company said, "Gryphon, a leading net carbon neutral bitcoin miner, will be merging with Akerna by way of an Agreement and Plan of Merger to create a leading, ESG-committed, carbon-neutral bitcoin miner. Upon completion of the merger, Akerna will change its name to Gryphon Digital Mining. The merger is expected to provide Akerna shareholders with access to the bitcoin mining industry with one of its premier operators. Gryphon brings a top-tier bitcoin mining operation to Akerna shareholders. Since it commenced bitcoin mining operations in September 2021, Gryphon has consistently ranked among the top three miners on a bitcoin efficiency basis according to publicly available data and has finished at or tied for first place in nine of the 12 months of 2022. Through its self-mining operations and royalty stream, Gryphon has a potential revenue generating profile of 1.1 exahash per second on a cost basis of 0.75 EH/s."
The deal is an Agreement and Plan of Merger, pursuant to which Gryphon will become a wholly-owned subsidiary of Akerna in an all-stock transaction. Upon completion of the proposed merger, on a pro forma basis and based upon the number of Akerna shares to be issued in the proposed merger, current Gryphon equityholders are expected to own approximately 92.5% of the combined company and current Akerna equityholders are expected to own approximately 7.5% of the combined company. The combined company is expected to continue to be publicly traded on Nasdaq. Upon closing of the proposed merger, Akerna Corp. will be renamed Gryphon Digital Mining, Inc., and will be headquartered in Las Vegas, Nevada. Rob Chang will serve as CEO of the combined company. The merger agreement provides that the Board of Directors of the combined company will comprise of seven members of which a minimum of five will be filled upon completion of the merger, one designated by Akerna, being Jessica Billingsley, its current CEO, and the remaining six positions to be designated by Gryphon.
BITCOIN DEPOT PARTNERS WITH CONVENIENCE STORES: Lux Vending, dba Bitcoin Depot, announced Tuesday multiple partnerships with convenience store brands with locations spanning across several states, including FastLane, Gas Express, High’s, Majors Management and Stinker Stores.
"We are seeing more retailers understand the potential value of providing their customers access to Bitcoin through Bitcoin Depot ATMs and these partnerships reinforce our value proposition for notable retailers in the U.S.," said CEO Brandon Mint
Including the partnerships announced, Bitcoin Depot signed 440 additional retailer locations across North America in the second half of 2022. On August 24, 2022, Bitcoin Depot and GSR II Meteora Acquisition Corp (GSRM), a special purpose acquisition corporation, entered into a definitive agreement for a business combination that would result in Bitcoin Depot becoming a public company listed on the Nasdaq under the ticker symbol "BTM."
BIT BROTHER SIGNS LOI WITH BLOCKWORX1: Bit Brother (BTB) announced Wednesday that it has signed a letter of intent with Blockworx1 or the potential sale of assets and services for total purchase price of $1,200,000. Blockworx1 is offering to sell a two-acre tract of land zoned for industrial use located at 5418 Lockheed Way, Abilene, TX 79603 that includes 5 MW of existing electrical load capacity with a potential to be scaled up to 10 MW of total electrical load capacity. Blockworx1 will also provide development services to complete the build out of the aforementioned property for the purpose of cryptocurrency mining, including site design, selection and oversight of contractors, coordination in obtaining project approval and final inspection sign-off, negotiation and procurement of power purchase agreement for 5 MW of electrical load, advisory and support for cryptocurrency mining hardware, and post-electrification site management to operationalize 5 MW of mining capacity.
RIOT PRICE TARGET LOWERED: BTIG analyst Gregory Lewis lowered the firm’s price target on Riot Blockchain (RIOT) on Friday to $12 from $15 but kept a Buy rating on the shares. The analyst is positive on the company’s ability to manage their hash capacity buildout, which should see Riot Blockchain continue to deliver increasing hash capacity. The firm added that Riot is one of the few BTC miners that could actually see its hash capacity "surprise to the upside".
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. Ideanomics (IDEX), Riot Blockchain, Overstock (OSTK), 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 9% this week to $23,019 in U.S. dollars, according to TradeBlock.
Published first on TheFly
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