Here’s What You Missed in Crypto This Week

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 INTERNATIONAL TO LAUNCH SPOT MARKETS: On Wednesday, Coinbase (COIN) announced that Coinbase International Exchange will launch and expand spot trading.  The company said, “As we continue to expand our global presence with Coinbase International Exchange, spot markets will deliver a seamless, enhanced trading experience for perpetual futures traders and provide global users with greater access to a trusted non-US spot exchange. By locating our servers in more accessible locations globally, we aim to significantly lower latency barriers and deliver a best-in-class trading experience for crypto users worldwide.  The launch and expansion of spot trading on Coinbase International Exchange will occur over several phases. On Thursday, December 14, we are listing BTC-USDC and ETH-USDC pairs via API access for non-US institutional clients only. Our primary focus at the outset will be to build liquidity and create a robust foundation. In the coming months, we plan to expand the product to include retail users, additional assets, and features that enable new trading strategies and enhance capital efficiency.” (read more)

Additionally on Friday, the Securities and Exchange Commission denied a Petition for Rulemaking filed on behalf of Coinbase, according to Chair Gary Gensler. He added, “I was pleased to support the Commission’s decision for three reasons. First, existing laws and regulations apply to the crypto securities markets. Second, the SEC addresses the crypto securities markets through rulemaking as well. Third, it is important to maintain Commission discretion in setting its own rulemaking priorities…The investing public benefits when they receive disclosures and related protections about a project’s prospects and business. The investing public benefits when intermediaries are registered and overseen. The investing public benefits when all industry participants compete on a level playing field. The existing securities regime appropriately governs crypto asset securities. I agree with the Commission’s decision to deny the petition.” (read more)

IRIS ENERGY INCREASES MINING CAPACITY: Iris Energy (IREN) announced Friday the acquisition of 1.6 EH/s of Bitmain T21 miners to increase self-mining capacity to 10 EH/s.  Iris Energy is acquiring 8,380 new-generation T21 miners from Bitmain Technologies for a purchase price of $14/TH or $22.3M. Shipping is scheduled for 2Q24 and the newly acquired S21 and T21 miners, once installed, will improve overall fleet efficiency from 29.5 J/TH to 24.8 J/TH. The company’s 80MW data center expansion at Childress remains on track to be progressively delivered from January 2024 through to Q2, supporting the increase in operating hashrate from 5.6 EH/s to 10 EH/s. Early works and procurement for the next 100MW of data centers at Childress are ongoing, with 500MW of additional power immediately available on site. (read more)

ANALYST RAISES PRICE TARGETS: On Monday, BTIG raised the firm’s price target on MicroStrategy (MSTR) to $690 from $560 and kept a Buy rating on the shares. The company’s acquisition of 16K additional bitcoins proved to be timely as the cryptocurrency has jumped about nearly 20% to $44,000, making the company’s total 174,530 bitcoin holdings worth $7.7B, the analyst said. The increased equity puts less of an emphasis on MicroStrategy’s $2.2B of outstanding debt as of Q3, as it is covered by $7.7B of bitcoin and a software business that generates about $90M of adjusted EBITDA, the firm added. (read more)

BTIG also raised the firm’s price target on CleanSpark (CLSK) to $12 from $10 and kept a Buy rating on the shares. The firm is citing the bitcoin price rally continuing to “gain steam”, with miners looking to be taking advantage by selling BTC at a higher price and potentially issuing more equity capital to fund growth. BTIG further noted that CleanSpark had recently reported its FY23 results, and the company has grown its hash rate by 142% over the past year to its current level of about 10 EH, with an eye on about 22 EH by the end of 2024. (read more)

BITFARMS INITIATED WITH BUY: On Thursday, B. Riley initiated coverage of Bitfarms (BITF) with a Buy rating and $4 price target. Bitfarms is a bitcoin mining company operating in four countries with a current hash rate of 6.4 EH/s and 240 MW of operational capacity across its sites, the analyst said. With a near-term hash rate target of 12.0 EH/s by June 2024, Bitfarms’ growth plans “are both timely and accretive,” the analyst said. The firm views the company as a competitive player with a low-cost footprint, little financial leverage, and a growth profile that improves fleet efficiency into and beyond the halving. (read more)

KUCOIN TO EXIT NEW YORK IN $22M SETTLEMENT: New York Attorney General Letitia James announced Tuesday that she secured more than $22M from crypto trading platform KuCoin for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange. The consent order resolves Attorney General James’ lawsuit against KuCoin and requires the company to refund over 150,000 New York investors more than $16.7M and pay more than $5.3M to the state. KuCoin is also banned from trading securities and commodities in New York and is prohibited from making its platform available to New Yorkers. “Unregistered offshore crypto platforms pose a risk to investors, consumers, and the broader economy,” said James. “Crypto companies should understand that they must play by the same rules as other financial institutions, and my office will hold them accountable when they don’t. This settlement will ensure every New Yorker who put their money into KuCoin can get it back and that KuCoin won’t be able to put other New York investors at risk. I will continue to take action against any company that brazenly disregards the law and jeopardizes New Yorkers’ savings and investments.” (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Marathon Digital (MARA), MicroStrategy, Riot Platforms (RIOT), Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin dropped roughly 5% this week to $42,124 in U.S. dollars, according to CoinDesk.