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.
TESLA TO STEER CLEAR OF CRYPTO: Tesla (TSLA) chief executive officer Elon Musk said bitcoin is "interesting" and may be a valuable way to transfer money, but the company is not looking to get involved in cryptocurrency, CNBC's Kate Rooney reported Tuesday. "Bitcoin's structure is brilliant but I don't think it would be a good use of Tesla's resources to get involved in crypto," Musk said. "Paper money is going away and crypto is a much better value for a transfer of value than pieces of paper but it has its pros and cons. It's very energy intensive to create bitcoin at this point."
CAMBRIDGE SAYS INSTITUTIONS SHOULD CONSIDER CRYPTO: Pensions and endowments consultant Cambridge Associates said institutional investors should start to mull exploring cryptocurrencies in a research note, Bloomberg’s Alastair Marsh reported Monday. “Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term,’’ the firm said. “Though these investments entail a high degree of risk, some may very well upend the digital world…The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them. Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.’’
BITGO ANNOUNCES INSURANCE PROTECTIONS: On Tuesday, crypto startup BitGo, which is backed by Goldman Sachs (GS), announced insurance protections for cryptocurrencies and digital assets held in their Business Wallet and Custody offering. Custodial assets held by either BitGo or BitGo Trust Company are insured for up to $100M through Lloyd’s. BitGo Business Wallet clients will be able to purchase theft insurance and Lost Key Cover, a key recovery service, for their assets through Digital Asset Services, an insurance provider overseen by the Financial Conduct Authority. CEO Mike Belshe, CEO said, “This is the most complete insurance offering in the industry…Transparency and accuracy is essential for building trust in the market.”
DRAPER SAYS BITCOIN IS THE FUTURE: Billionaire and veteran investor Tim Draper said, “We’re probably two years away before everybody is buying coffee” with bitcoin, Fox Business’ Jade Scipioni reported Monday. “It’s just a matter of, as the lightning network, which is the network that is now added to bitcoin that speeds it up, as that starts permeating the system, it is going to make it much easier for us to just use our phone” for payments, he said. “In five years, we will try to go in and buy coffee for fiat money and the barista will laugh at you…Cash will be used for criminals.” Draper added that he believes his money in the bank is less secure than his bitcoin as banks are constantly under hacking attacks. “The future is in bitcoin and other cryptocurrencies,” he said.
IDEANOMICS NAMES CEO: On Thursday, Ideanomics (IDEX) announced several strategic management changes, including the return of Bruno Wu as chairman and naming of Alfred Poor, currently chief operating officer, as CEO. Brett McGonegal, Evan Kalimtgis, and Uwe von Parpart will be leaving the company to pursue other interests. In addition, the company said, “While we exceeded our topline revenue guidance earlier in the year, we do not expect to generate profit in the fourth quarter due to the Company's transformation towards fintech services and the build-up in infrastructure needed to support our long-term strategy and path to profitability…the overall market for token offerings slowed dramatically in 2018. The Security Token Offering related legal and regulatory landscape is still evolving and has moved slower than the market anticipated. We fully embrace these market changes and believe they present significant opportunities for Ideanomics.”
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), DPW Holdings (DPW), Kodak (KODK), Ideanomics, Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (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 10.8% this week to $3,938, in U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Tesla
+ (+0.00%)
Goldman Sachs
+ (+0.00%)
Ideanomics
+ (+0.00%)
AMD
+ (+0.00%)
Nvidia
+ (+0.00%)
OSTK
+
Ault Global Holdings
+ (+0.00%)
Eastman Kodak
+ (+0.00%)
Riot Platforms
+ (+0.00%)
Pareteum
+ (+0.00%)
Srax
+ (+0.00%)