Goldman reboots cryptocurrency trading desk as Charles Schwab mulls crypto brokerage
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.
GOLDMAN REBOOTS CRYPTO TRADING DESK: Goldman's (GS) cryptocurrency trading desk is back up and will be a dealer for bitcoin futures and non-deliverable forwards for customers in the near future, Reuters’ Anna Irrera, Iain Withers and Lawrence White reported Monday. Goldman's crypto trading unit is part of the bank’s activities within the growing digital assets sector, which also includes projects involving blockchain technology and central bank digital currencies. Goldman is also evaluating the potential for a bitcoin exchange traded fund and has issued a request for information to consider digital asset custody. The trading desk restart comes amid growing institutional interest in bitcoin, which has soared more than 470% over the past year.
CHARLES SCHWAB MULLS CRYPTO BROKERAGE: Charles Schwab (SCHW) is considering the possibility of launching a crypto brokerage, The Block's Frank Chaparro reported Thursday. The service would rely on the tech of a crypto-native partner and the company is reportedly mulling several different digital asset companies to white-label the services. If successful, the new services will launch by the end of this year.
PAYPAL IN PROCESS OF BUYING CURV: PayPal (PYPL) is in the process of buying Curv, CoinDesk's Ian Allison reported Tuesday, citing three sources familiar with the matter. While Israeli news outlet Calcalist previously said that Curv was being sold to an unnamed buyer for $200M-$300M, one source within the digital asset custody space said that PayPal will acquire the technology firm for $500M. The company reportedly turned its attention to Curv after negotiation to acquire crypto custody and trading firm BitGo collapsed last year.
MICROSTRATEGY BUYS BITCOIN: MicroStrategy (MSTR) announced Thursday that it had purchased approximately 205 bitcoins for $10M in cash, at an average price of approximately $48,888 per bitcoin, inclusive of fees and expenses. As of March 5, 2021, the company holds approximately 91,064 bitcoins that were acquired at an aggregate purchase price of $2.196B and an average purchase price of approximately $24,119 per bitcoin, inclusive of fees and expenses. The move comes after the company announced Monday that it purchased approximately 328 bitcoins for $15M in cash, at an average price of approximately $45,710 per bitcoin, inclusive of fees and expenses.
COINBASE INITIATED WITH BUY: DA Davidson analyst Gil Luria initiated coverage of Coinbase (COIN) on Wednesday with a Buy rating and $195 price target. The company's direct listing is an "Amazon moment" for crypto, representing a milestone when the world of crypto and the traditional financial system become "truly intertwined", the analyst said. Luria added that Coinbase is in the lead with the "highest level of regulated liquidity", though he also warned that the stock is a "more speculative investment" than other that he recommends.
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 1% this week at $48,275 in U.S. dollars, according to TradeBlock.