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.
ANALYST SAYS FACEBOOK COIN COULD ADD $19B IN SALES: Any attempt by Facebook to build out revenue streams outside of Advertising, especially those that don't abuse user privacy, are likely to be very well received by shareholders, Barclays analyst Ross Sandler said in a Monday research note. The analyst points out that Facebook "has a long history" in Payments dating back to the original FB Credits, which in 2012 represented approximately 16% of company revenue. If Facebook Coin proves successful in reinvigorating the company's micro-payment strategy for digital content distribution, it could add as much as $19B in additional revenue by 2021, Sandler says, citing his "upside case." His "base case," which he admits is "more conservative," has Facebook Coin adding an incremental $3B in revenue by 2021. The analyst keeps an Overweight rating on Facebook with a $210 price target.
CANADA CONSIDERS CRYPTO RULES: The Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada are considering creating new rules for crypto trading platforms after the death of Quadriga CX founder Gerald Cotten, which led to roughly $135M in frozen cryptocurrencies, Reuters’ John Benny reported Thursday. “We must adapt to innovation and provide clarity to the market about how regulatory requirements might best be tailored and applied to these unique business models, while maintaining investor protection,” IIROC chief executive officer Andrew Kriegler said.
NASDAQ LICENSES TECH TO CRYPTO PLATFORM: Nasdaq (NDAQ) and Bcause announced Wednesday that Bcause’s markets will operate on Nasdaq’s matching engine, clearing and market surveillance technology via the Nasdaq Financial Framework platform. The technology is expected to go live in the first half of 2019 with the launch of the new Bcause spot cryptocurrency market. In addition, Bcause has filed with the U.S. Commodity Futures Trading Commission to become a designated contract market and to establish a derivatives clearing organization.
WINKLEVOSS TWINS CALL FOR TRUST, MORE REGULATION: Tyler and Cameron Winklevoss, the twins who run the Gemini Trust Exchange, said developing trust is key to regaining confidence among cryptocurrency traders following the death of Quadriga CX founder Gerald Cotten, Bloomberg’s Olga Kharif reported Saturday. “There are a lot of carcasses on the road of crypto that we’ve seen and learned from. At the end of the day it’s really a trust problem. You need some kind of regulation to promote positive outcomes,” Cameron Winklevoss said, adding better oversight and compliance will also help bitcoin’s price to recover.
ANALYST CALLS OVERSTOCK ‘COMPELLING’: DA Davidson analyst Tom Forte kept his Buy rating and $58 price target on Overstock.com (OSTK) in a Wednesday research note, maintaining his view that the stock is "compelling" with e-commerce and blockchain assets as mis-priced. The analyst estimates $31 per share valuation in e-commerce "unlocked through sale to a strategic buyer" and $27 per share for the company's Medici ventures blockchain portfolio. Ahead of next week's earnings call, Forte forecasts Overstock.com to post a 6% revenue growth. The analyst adds that he is looking forward to the company allowing all investors, not just accredited ones to trade its tZERO security tokens.
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, DPW Holdings (DPW), Kodak (KODK), Ideanomics (IDEX), 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 remained roughly flat this week to $3,884, in U.S. dollars, according to TradeBlock.
Keywords: bitcoin, ethereum, crypto, cryptocurrency, cryptocurrencies, token, stocks, blockchain, stablecoin, regulation