Japan studying infrastructure for digital payments as Bloomberg sees bitcoin at $20K
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.
JAPAN STUDYING INFRASTRUCTURE FOR DIGITAL PAYMENTS: Japanese banks Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group (MFG) and Sumitomo Mitsui Financial Group (SMFG) have established a study group that will evaluate the potential of developing a common settlement infrastructure for digital payments, Reuters’ Leika Kihara reported Wednesday. “Japan has numerous platforms for cashless settlement, but they have yet to overwhelm the usage of cash,” said Hiromi Yamaoka, a former central bank executive who will chair the group. “One solution could be to enhance the inter-operability of digital currencies and infrastructure.” East Japan Railway and other non-financial firms will also participate in the group.
BLOOMBERG SEES BITCOIN AT $20K: In a Tuesday note, Bloomberg analysts said bitcoin could double to $20,000 this year as it has so many favorable fundamental and technical factors that "something needs to go really wrong for bitcoin to not appreciate.” The company said that if bitcoin follows 2016’s trend, it should approach the record high of roughly $20,000 in 2020. The cryptocurrency’s maturation, bolstered by the growing acceptance of crypto, the ability to trade bitcoin futures and a steady drop in volatility, should keep it moving toward price appreciation, Bloomberg said. The company, which said the cryptocurrency is benefiting from the coronavirus pandemic, also expects bitcoin to appreciate if the stock market rolls over.
CRYPTO CRIME RISES AMID PANDEMIC: Losses from cryptocurrency thefts, hacks and frauds rose to roughly $1.4B from the beginning of the year until the end of May, according to a Tuesday report from crypto intelligence company CipherTrace. The proportion linked to coronavirus fraud involving digital currencies for the first five months was minimal and the biggest contributor to crypto losses this year was the $1B Ponzi scheme by Wotoken, the company said. The year’s crypto crime is on track to be the second largest on record following 2019’s $4.5B in losses. “Consumers, investors, and users continue to adopt cryptocurrency at a massive rate and it is by far the fastest-growing payment system on the planet,” said Dave Jevans, CipherTrace CEO. “At one trillion dollars in annual payments, cryptocurrency payments have grown from zero to 7% in 10 years, making this volume of funds attractive to bad actors.”
RIOT PURCHASES ADDITIONAL ANTMINERS: Riot Blockchain (RIOT) announced Wednesday it has purchased an additional 1,000 next-generation Bitmain S19 Pro Antminers for $2.3M from BitmainTech. This purchase was funded using available working capital and Riot has no long-term debt. By Q4, without any further miner purchases, Riot estimates its aggregate operating hash rate to be approximately 567 petahash per second consuming 14.2 megawatts of power, assuming full deployment of the total 7,040 next-generation miners. Riot anticipates that the additional S19 Pro & S19 3,040 miners will be deployed as received in the second half of 2020 and are estimated to represent over 56% of Riot's total hashing capacity.
ANDREESSEN GP EXPECTS MORE LIBRA-LIKE PROJECTS: Katie Haun, a general partner at venture capital firm Andreessen Horowitz, said money will be digital in a decade and initiatives like Facebook’s (FB) Libra will be key to getting there, Bloomberg’s Olga Kharif reported Monday. The firm, which has invested in both Libra and competitor Celo, recently started a second $515M fund to invest in cryptocurrencies and blockchain projects. “There will be other entrants in this category,” Haun said. “Fundamentally everybody on the planet has a need to transfer value.”
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 (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 rose roughly 3% this week to $9,715 in U.S. dollars, according to TradeBlock.