Sweden's Riksbank begins crypto testing as Riot suspends RiotX Exchange development
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.
SWEDEN BEGINS CRYPTO TESTING: The Riksbank announced Thursday it is conducting a pilot project with Accenture (ACN) to develop a technical solution for an e-krona that can work as a complement to cash. The bank said, “The aim of the project is to show how an e-krona could be used by the general public. A digital krona should be simple, user-friendly as well as fulfill critical requirements for security and performance.” In the test environment, simulated users will be able to hold e-kronor in a digital wallet and make payments, deposits and withdrawals via a mobile app. The user shall also be able to make payments via wearables, such as smart watches, and cards. The pilot project runs until the end of February 2021, with the option to extend and further develop the technical solution. The pilot project’s technical solution will be based on Distributed Ledger Technology. There is currently no decision on issuing an e-krona, how an e-krona might be designed or what technology might be used.
RIOT SUSPENDS CRYPTO EXCHANGE DEVELOPMENT: Riot Blockchain (RIOT) announced Thursday that it has opted to sunset further development of Riot's U.S.-based digital currency exchange, known as the RiotX Exchange, originally initiated in early 2018. The move comes in an effort to concentrate the company’s focus on cryptocurrency mining. Riot considered a number of factors when evaluating the RiotX decision including the evolving regulatory environment, cybersecurity risks, and the current competitive landscape facing U.S. based cryptocurrency exchanges. Riot is considering opportunities to divest the limited assets associated with the RiotX in the best interest of the company and its stockholders. The company also announced it has engaged XMS Capital Partners to assist in evaluating strategic growth opportunities. XMS will help Riot navigate the bitcoin landscape and advise the company on potential strategic transactions in bitcoin mining related operations.
FORTRESS RAISES OFFER TO BUY MT. GOX CLAIMS: Fortress Investment Group raised its offer to purchase creditor claims from the defunct MT. Gox crypto exchange amid this year’s bitcoin rally, Bloomberg’s Olga Kharif reported Wednesday. The firm sent letters to creditors offering $1,300 per bitcoin, or 88% of its estimated account value, up from a $600 per bitcoin offer last March. Mt. Gox was a Japanese bitcoin exchange that shuttered in early 2014 after losing the coins of thousands of customers. Thousands of bitcoins have since been found and a trustee is working to reimburse creditors.
DPW RECEIVES PURCHASE ORDER: DPW Holdings (DPW) announced Friday that its global defense business Gresham Worldwide has received a $1.4M order from defense and aerospace customer of its wholly owned subsidiary Enertec Systems 2001. After receiving a $2.9M order in 2019 to develop testing system, Enertec recently received a follow-up order of an additional $1.4M related to thesystem. Enertec's management believes this customer has the potential to order over $10M of Enertec products per year.
NOVOGRATZ SEES BITCOIN ALL-TIME HIGH: Crypto investor Michael Novogratz said bitcoin’s liquidity-driven rally is likely to continue throughout 2020, CNBC reported last Friday. “Right now bitcoin feels a little frenzied, and we could see it surge up, but I think by the end of the year we certainly take out the old highs,” Novogratz, head of cryptocurrency merchant bank Galaxy Digital, said. “Or at least we go to the old highs.” He added that he is optimistic amid large amounts of monetary stimulus globally, specifically in China as a response to the coronavirus. “The Chinese are about to pull two giant bazookas out and stimulate the heck out of the second-largest economy in the world. That’s going to be good for Chinese stocks at one point, but that stimulus always finds its way around the world. So oil prices end up coming back up, and you get another surge of growth,” Novogratz said, adding bitcoin could reach his estimated levels by the “halving,” which is expected to take place in May.
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, Kodak (KODK), Ideanomics (IDEX), Riot Blockchain, 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 dropped roughly 5.3% this week to $9,717 in U.S. dollars, according to TradeBlock.