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.
SENATOR WARREN BUILDS ANTI-CRYPTO ARMY: Massachusetts Senator Elizabeth Warren is putting together an anti-crypto army, with some conservatives getting on the cause, Politico’s Zachary Warmbrodt reported Tuesday. The senator is working to build support for a bill that would have sweeping impacts for the space through stricter anti-money laundering rules, including requirements that more crypto providers verify user identities. Sen. Roger Marshall, a Kansas Republican, co-sponsored the legislation. National security concerns are the focal point for Warren as she evaluates potential crypto legislation, Politico said, adding she has also raised red flags about a number of problems in the industry, from consumer protections to environmental impact.
BAKKT TO DISCONTINUE CONSUMER-FACING APP: Bakkt Holding (BKKT) announced Monday that it is furthering its focus on providing scalable business-to-business technology solutions and will be sunsetting its consumer-facing app. Bakkt will continue its core focus of providing businesses with crypto and loyalty experiences for their customers through SaaS and API solutions on a secure and compliant platform.
“As we continue to gain traction with our B2B2C strategy, we are laser focused on providing our partners and clients with seamless solutions that best serve their needs. The discontinuation of the app ensures we are supporting the relationship our partners and clients have with their customers,” said CEO Gavin Michael. “With this move, we are focusing our investment on our core solutions that have product-market fit and are positioned to scale quickly.”
Current Bakkt App users will retain access to all their crypto and cash on the Bakkt platform via a new web experience that is accessible from all devices. Users will still be able to view crypto balances and access crypto transaction reports for tax purposes. The app will officially sunset on March 16.
INTERACTIVE BROKERS LAUNCHES CRYPTO TRADING IN HONG KONG: Interactive Brokers (IBKR) announced Monday its launch of cryptocurrency trading in Hong Kong, enabling Professional Investor clients to trade bitcoin and ethereum. Eligible clients including individuals with over HKD 8M in investable assets or institutions with assets greater than HKD 40M who are residents of Hong Kong, can now trade cryptocurrency alongside other asset classes available on the Interactive Brokers platform. Cryptocurrency trading through Interactive Brokers Hong Kong is powered by OSL Digital Securities and has commissions of 0.20% – 0.30% of trade value, depending on monthly volume, with a $2.25 minimum per order, with no added spreads or markups.
“Investor demand for digital assets continues to grow in Hong Kong and around the world, and we are pleased to introduce cryptocurrency to address the trading objectives of clients in this important market,” said David Friedland, Head of APAC at Interactive Brokers. “Eligible clients will benefit from our low costs and the ability to trade crypto alongside many other global products from a single unified platform.”
CLEANSPARK PURCHASES 20,000 MINING MACHINES: CleanSpark (CLSK) announced Thursday the purchase of 20,000 new Antminer S19j Pro+ units for $43.6M. After coupons, the company expects to pay $32.3M, for a discount of 25% or a total price per terrahash of approximately $13.25. The Pro+ will be shipped in batches, with deliveries starting as early as next month. All batches are expected to be delivered by the manufacturer to the company’s mining campuses by the end of May. After they are fully operational, they are expected to add 2.44 EH/s to CleanSpark’s existing 6.6 EH/s of bitcoin mining computing power, constituting a 37% increase.
"Building and owning our own mining campuses at multiple locations provides us with a level of agility and reliability that cannot be achieved otherwise," said CEO Zach Bradford. "As machines are delivered to us we will have rackspace waiting for them at one of our sites. This is the advantage of proprietary mining or the ‘prop mining’ model. We exercise tremendous control over our infrastructure and, therefore, our ability to be highly efficient in the way we allocate our resources."
COINBASE UPGRADE: Compass Point analyst Chase White upgraded Coinbase (COIN) to Buy from Neutral on Friday with a price target of $100, up from $75, after updating estimates ahead of the company’s Q4 earnings report due on February 21. The firm believes Coinbase is well positioned to gain market share when the crypto bull market returns, which it expects to start in late 2023 and continue through 2024, especially among U.S. retail investors. Coinbase currently faces regulatory uncertainty related to several aspects of its business, but the firm believes "most of the issues are unlikely to have a materially negative impact on operations when all said and done," the analyst added.
Meanwhile on Monday, Barclays analyst Benjamin Budish raised the firm’s price target on Coinbase to $57 from $45 and kept an Equal Weight rating on the shares. The analyst said that since the firm published its Q4 earnings previews earlier in January, crypto asset prices and spot trading volumes have increased materially. That said, Barclays remains "somewhat cautious," as data indicates the pickup is not being driven by retail activity.
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 10% this week to $23,970 in U.S. dollars, according to TradeBlock.
Published first on TheFly
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