Coinbase rolls out crypto card in the U.S. as JPMorgan launches blockchain division
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 ROLLS OUT CRYPTO CARD IN THE U.S.: Coinbase announced Wednesday that U.S. customers can join the waitlist for Coinbase Card, a Visa (V) debit card that allows crypto to be used for payments and purchases as well as ATM cash withdrawals. The company said, “Coinbase Card holders can spend directly from their Coinbase accounts without having to move funds to their bank accounts. Cryptocurrency is converted to U.S. dollars prior to completing purchases and ATM withdrawals…Earn up to 4% back in crypto rewards: Earn rewards using cryptocurrency through daily spending. At launch, customers can opt to earn 4% back in Stellar Lumens or 1% back in Bitcoin…Manage spending and rewards preferences directly through the Coinbase app. Customers can opt to spend stablecoins like USD Coin or other specific cryptocurrencies with the touch of a button.” The first customers will be approved this winter.
JPMORGAN LAUNCHES BLOCKCHAIN DIVISION: A large technology client is using JPMorgan’s (JPM) digital currency JPM Coin commercially for the first time this week to send payments globally, CNBC’s Hugh Son reported Tuesday, citing Takis Georgakopoulos, the bank’s global head of wholesale payments. The move convinced the bank to form Onyx, a new business to house it blockchain and digital currency initiatives with over 100 dedicated employees. “We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” Georgakopoulos said.
FORMER NYSE REGULATOR TAKES CRYPTO JOB AT ANDREESSEN HOROWITZ: In a Wednesday blog post, Andreessen Horowitz general partner Katie Haun announced Anthony Albanese, former chief regulatory officer of the New York Stock Exchange, has joined the firm as an operating partner on the crypto team. Haun said, “Crypto is at a fascinating point in its development. Sensible regulation of this emerging field will be a major factor in its success. We believe innovation and regulation can coexist, just as they did with the development of the Internet, but to do so both sides must fully understand each other’s points of view. That’s where Anthony, like he did with us, will bring a long-term approach to his relationships with both regulators and entrepreneurs. There’s an immense need for highly skilled and experienced lawyers who are passionate about crypto and want to see regulation applied in a modern way that lets innovation flourish…Anthony will be steering our network operations efforts, regulatory outreach, and, of course, working directly with our portfolio projects to help them think through strategy, hires, and much more.”
OVERSTOCK REPORTS EARNINGS:On Thursday, Overstock (OSTK) reported third quarter earnings per share of 50c on a revenue of $732M, which compared to a loss per share of 89c on a revenue of $342M in 3Q19. The company also reported Q3 tZERO net revenue of $11M, an increase of 97% year-over-year, and volume on the tZERO ATS up 856% to 4M shares. Additionally on Wednesday, tZERO announced it has signed an agreement with Tynton Capital to provide digitization services for its planned data infrastructure technology fund, which will be issued on the Tezos Blockchain. The fund has a planned offering size of $300M and is expected to trade on the tZERO ATS. The company also announced Wednesday that Medici Ventures made an $8M equity purchase in Bitt, giving it a controlling interest in the company. Medici Ventures said, “The additional equity will enable Bitt to pursue market opportunities that accelerate the adoption of digital currencies in developing countries…Bitt was founded in 2013 to provide infrastructure to support a digital financial ecosystem throughout the Caribbean, stimulating economic growth and financial access for this and future generations. Bitt's financial software and mobile application platform utilize blockchain and distributed ledger technology to facilitate secure peer-to-peer transactions.” Medici Ventures first purchased $4M of equity in Bitt in early 2016, followed by an additional $3M equity purchase in 2018.
MARATHON PURCHASES PRO MINERS: Marathon Patent Group (MARA) announced Monday that it has entered into a contract with Bitmain to purchase an additional 10,000 next generation Antminer S-19 Pro ASIC Miners. Each miner produces 110 TH/s adding 1.10 EH/s to the company's existing operation of 2,560 miners. 500 additional S-19 Pro Miners will arrive at Marathon's Hardin, MT facility in November 2020. Beginning in 2021, the Company will receive the following shipments of S-19 Pro Miners: 4,000 in January, 6,300 in February, 4,800 in March, 1,800 in April, 1,800 in May and finally 1,800 in June.
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, 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 rose roughly 2.6% this week at $13,292 in U.S. dollars, according to TradeBlock.