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.
SEC SAYS COINBASE NOT ENTITLED TO CRYPTO CLARITY: The Securities and Exchange Commission issued a response on Monday to Coinbase’s (COIN) April mandamus petition, in which the company urged federal courts to instruct the agency to issue clear guidelines for cryptocurrency exchanges and business.
The SEC said the company has no right to mandamus, stating that, “Perhaps recognizing this, Coinbase instead asserts that this Court should compel the Commission to act on Coinbase’s recently filed rulemaking petition. But no statute or regulation requires the Commission to take such action on a specific timeline.” The agency said, “Mere months have passed since Coinbase’s petition was filed and even less time has elapsed since Coinbase supplemented the record…Deliberating over the kind of significant changes sought by Coinbase, which could affect both crypto assets and the securities markets more generally, takes time—including, as here, time to weigh whether or not to initiate a rulemaking proceeding about such topics in the first instance. This is particularly true given the Commission’s active regulatory and enforcement agenda in this area.”
Following the response on Monday, Coinbase chief legal officer Paul Grewal tweeted, “Today the SEC responded to Coinbase’s petition for a writ of mandamus — asking the court to require the SEC to respond just yes or no to whether it will undertake rulemaking for our industry. The SEC’s answer? A resounding maybe…The SEC told the court that rulemaking may take years and they’re in no rush. The SEC acknowledged that it will continue to use enforcement actions as a substitute for rulemaking for the foreseeable future, but not to worry — those enforcement actions may eventually ‘inform’ not-yet-planned rulemaking…Overall the SEC’s response reinforces Coinbase’s longstanding concern that our industry does not have clarity on what the SEC may consider to be within or outside its jurisdiction at any time, and it is likely to continue changing its mind along the way.”
Meanwhile announced Thursday that it has finalized an agreement to expand the company’s bitcoin mining presence into Iceland. This expansion will allow Bit Digital to tap into Iceland’s abundant renewable energy resources and further diversify its hosting operations. Following this agreement, Bit Digital will have mining operations in three countries: the United States, Canada, and Iceland. Bit Digital has finalized a two-year agreement with GreenBlocks for approximately 8.25 megawatts of incremental hosting capacity at a facility in Reykjanesbaer, Iceland. The company will fill the capacity with approximately 2,000 S19j Pro+ and 500 S19 mining units that were recently purchased for approximately $3.6M. The mining units are expected to be delivered to the facility by the end of May 2023.
Sam Tabar, Bit Digital’s CEO, commented, "We are pleased to announce our partnership with GreenBlocks and our entry into the Icelandic market. Our experience with GreenBlocks has been exceptional, and we appreciate their professionalism in facilitating our entry into the country. This partnership aligns well with our sustainability goals and our mission to diversify our hosting portfolio across different geographies and jurisdictions. Iceland’s clean energy abundance and supportive government policies provide an ideal environment for our mining operations, and we anticipate a productive and successful collaboration for years to come."
BITFARMS REPORTS Q1 EARNINGS: On Monday, Bitfarms (BITF) reported first quarter loss per share of 1c on a revenue of $30.05M, which compared to earnings per share of 2c on a revenue of $40.32M for the same period last year. During Q1, Bitfarms mined 1,297 bitcoin.
“Focused on maintaining financial and operating discipline, we have built strength and flexibility to drive growth and accelerated our 6.0 EH/s target from the end of Q4 2023 to the end of Q3 2023,” said CEO Geoff Morphy. “With our foundation and momentum, we expect to seize opportunities both today and around the next Bitcoin halving which is approaching in April 2024.”
On Friday, Cantor Fitzgerald analyst Josh Siegler initiated coverage of Bitfarms with an Overweight rating and $2 price target. Bitfarms is a vertically integrated bitcoin mining company that is "uniquely positioned" to increase its hash rate by 26% over the next year with minimal cash outlays, the analyst said. Despite the "strong line of sight" to its target hash rate and improving free cash flow, the stock is down 41% year-over-year, said the firm. Cantor believes Bitfarms’ story "may be underappreciated by investors."
BIT MINING, CHAIN REACTION ENTER COLLABORATION: BIT Mining (BTCM) announced Friday that it has entered into a collaboration with Chain Reaction, a semiconductor company focused on blockchain and privacy hardware, to produce next-generation systems for bitcoin mining. The systems, expected to launch later this year, will be based on Chain Reaction’s EL3CTRUM ASIC solution.
The companies said, “Together, BIT Mining and Chain Reaction are poised to leverage their expertise and knowledge to develop and create a new generation of hardware that will deliver industry leading performance with relatively low power consumption.”
RIPPLE ACQUIRES METACO FOR $250M: Ripple announced Wednesday it has acquired Metaco, a Swiss-based provider of digital asset custody and tokenization technology.
The company said, “Diversifying into custody solutions is a milestone in Ripple’s business and product strategy, bringing new revenue opportunities to the company. Ripple and Metaco share strong crypto DNA, top-tier institutional customers, and a long history of working with regulated entities to create secure enterprise-grade solutions. With this acquisition, Ripple will expand its enterprise offerings, providing customers with the technology to custody, issue, and settle any type of tokenized asset. Metaco will dramatically accelerate its growth trajectory through access to Ripple’s established base of hundreds of customers, capital to address new demand, and resources to continue delivering on its commitment to banking and institutional clients.”
Metaco’s technology solutions are currently offered across various jurisdictions, including Switzerland, Germany, Turkey, France, the United Kingdom, the United States, Singapore, Australia, Hong Kong and the Philippines, among others. Ripple will become the sole shareholder of Metaco, which will continue to operate as an independent brand and business unit led by Founder and CEO Adrien Treccani.
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 Platforms (RIOT), 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 2% this week to $26,917 in U.S. dollars, according to TradeBlock.
Published first on TheFly
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