Purpose Investment's launches bitcoin ETF as Blockchain.com raises $120M in financing round
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.
PURPOSE LAUNCHES BITCOIN ETF: Purpose Investments announced Wednesday the world’s first Bitcoin ETF, backed by physically settled bitcoin, is now available to investors. The Canadian dollar denominated ETF non-currency hedged units and U.S. dollar denominated ETF non-currency hedged units of Purpose Bitcoin ETF are trading on the Toronto Stock Exchange under the ticker BTCC.B and BTCC.U, respectively. The company said, “With a management fee of just 1.00% per annum, Purpose believes the ETF represents the simplest, most efficient and most affordable way for investors to gain direct exposure to digital currency with the convenience of registered account eligibility.” The ETF will invest directly in physically settled bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency without the associated risk of self-custody within a digital wallet. Similar to physically backed gold or silver products, the ETF will be backed directly by physically settled Bitcoin holdings. Purpose worked in close coordination with the Ontario Securities Commission through a confidential pre-filing process through a series of meetings and presentations over the course of many months to finalize the launch of the ETF.
BLOCKCHAIN.COM RAISES $120M: Blockchain.com announced Wednesday it had closed on a strategic financing round, securing $120M from investors including Moore Strategic Ventures, Kyle Bass, Access Industries, Rovida Advisors, Lightspeed Venture Partners, GV, Lakestar, Eldridge and more. CEO Peter Smith said, “Bitcoin just crossed the monumental price target of $50k. Over 65M Wallets have been created in 200+ countries. And 28% of all Bitcoin transactions since 2012 have occurred via Blockchain.com, representing billions in transaction volume. What excites me most about this moment is the immense optimism about cryptocurrency from serious, institutional investors. In fact, the current bull run is dominated by stories of Fortune 500 companies, investment funds, and institutions driving net inflows into crypto. The fact that the best macro investors in the world participated in our latest fundraise is further proof that institutions are taking a serious look at their crypto strategy. Our Institutional Markets business is growing exponentially, and while the Wallet remains the core of our business, our Institutional business is now significant enough to cover the entire operating cost of the business globally while also delivering additional operating profits.”
ROBINHOOD TO ALLOW CRYPTO DEPOSITS, WITHDRAWALS: In a Tuesday tweet, the company said, “So much interest in Crypto! To be crystal clear, we fully intend to provide the ability to deposit and withdraw cryptocurrencies, including DOGE. Robinhood Crypto does NOT currently invest in cryptocurrency or use any customer cryptocurrency for our own benefit.” The move comes after Robinhood had temporarily disabled a feature on its app in January that enabled users to buy crypto securities instantly.
NVIDIA UNVEILS CRYPTO MINING PROCESSOR LINE: In a Thursday blog post, Nvidia said in part, "To address the specific needs of Ethereum mining, we're announcing the NVIDIA CMP, or, Cryptocurrency Mining Processor, product line for professional mining. CMP products - which don't do graphics - are sold through authorized partners and optimized for the best mining performance and efficiency. They don't meet the specifications required of a GeForce GPU and, thus, don't impact the availability of GeForce GPUs to gamers."
MICROSTRATEGY TO BUY BITCOIN: MicroStrategy (MSTR) announced Friday the closing of its previously announced offering of 0% convertible senior notes due 2027. The aggregate principal amount of the notes sold in the offering was $1.05B and he notes were sold in a private offering to qualified institutional buyers. The notes are convertible into cash, shares of MicroStrategy's class A common stock, or a combination of cash and shares of MicroStrategy's class A common stock, at MicroStrategy's election. The conversion rate for the notes is initially 0.6981 shares of MicroStrategy's class A common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $1,432.46 per share. MicroStrategy estimates that the net proceeds from the sale of the notes will be approximately $1.03B, after deducting the initial purchasers' discounts and commissions and estimated offering expenses payable by MicroStrategy. MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin.
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), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and SRAX (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 13.5%% this week at $53,541 in U.S. dollars, according to TradeBlock.