Coinbase hits public market via direct listing as Riot Blockchain produces 187 bitcoin in March
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 HITS PUBLIC MARKET: Bitcoin services provider and marketplace operator Coinbase (COIN) made its public market debut on Wednesday via a direct listing on the Nasdaq exchange, opening for trading at $381. The direct listing reference price was $250. The shares climbed as high as $429 during the session, valuing the company at $112B, before dropping below their debut price. Following the move, BTIG analyst Mark Palmer initiated coverage of Coinbase with a Buy rating and $500 price target. Coinbase is positioned to be a primary beneficiary of the increased adoption of bitcoin and other digital assets as it continues to scale in the U.S. and internationally, Palmer said. The analyst believes the company has "several avenues through which it could build upon its first-mover advantage as an on-ramp for mainstream crypto investors" by diversifying its revenue stream away from transaction fees and leveraging its "increasingly robust" platform for institutional investors. Palmer's price target is based on 16-times estimated fiscal 2024 net revenue of $8.2B. Meanwhile, DA Davidson analyst Gil Luria raised the firm's price target on Coinbase to $650 from $440 and kept a Buy rating on the shares. The stock debuted on the Nasdaq with a wide trading range before closing well above its $250 reference price, the analyst said, adding that its preliminary Q1 results also "far exceeded" expectations as bitcoin trading volumes held up better than expected. Coinbase has emerged as a leader in facilitating the on-ramp from government currency into crypto because of its "superior user experience, security and strong compliance", Luria said. Additionally, Loop Capital analyst Kenneth Hill initiated coverage of Coinbase with a Buy rating and $394 price target. The company is a "leading crypto exchange" at its "most basic level", but at its core, it is a "customer acquisition story", the analyst said. The success of Coinbase will be driven by how effectively it is able to add customers and gather assets on its platform over time, Hill adds, stating that crypto adoption is still in its "early days".
RIOT PRODUCES 187 BITCOIN IN MARCH: Riot Blockchain (RIOT) announced Monday an operations update that includes an unaudited bitcoin production and an unaudited BTC holdings update, through March 2021. In March 2021, Riot produced 187 BTC, an increase of 80% over its pre-halving March 2020 production of 104 BTC. In 1Q21, the Company produced 491 BTC, an increase of 75% over its pre-halving 1Q20 production of 281 BTC. As of March 31, 2021, Riot holds over 1,565 BTC on its balance sheet, all of which was produced by its mining operations. On Tuesday, Andrew Left’s Citron Research said via Twitter that Riot Blockchain should trade to its net asset value of $2 per share, noting the company has no intellectual property. The firm recommends bitcoin exposure through Bitcoin Investment Trust (GBTC), which it says trades at a 7% discount to net asset value versus Riot Blockchain's 3,000% premium. The firm said, “If U want BTC exposure -BUY BTC or $GBTC at a 7% discount. The 3000% premium of $RIOT to NAV will historically look more ridic than 80%-100% premiums $GBTC traded to $NAV in 2017. While Cit loves $BTC, $RIOT should trade to NAV $2 [BTC+PP&E]. NO IP." Shares of Riot are off the day's highs but remain up 4% to $53.43 in morning trading.”
HSBC BLOCKS MICROSTRATEGY BUYS: HSBC (HSBC) is prohibiting customers of its online share-trading platform from purchasing or moving into their accounts MicroStrategy (MSTR) shares, calling the stock a "virtual currency product," Reuters' Tom Wilson reported Monday. The lender told InvestDirect clients that it will not facilitate the trading of products related to or referring the performance of virtual currencies.
WISDOMTREE LISTS BITCOIN ETP ON BORSE XETRA: WisdomTree (WETF) announced Wednesday its physically-backed Bitcoin ETP has listed on Germany's Borse Xetra. The WisdomTree Bitcoin ETP has a total expense ratio of 0.95% and is already listed on SIX, the Swiss Stock Exchange. The listing of the WisdomTree Bitcoin ETP on Borse Xetra follows approval from the Swedish regulator to distribute this ETP across the European Union. Following the listing, Morgan Stanley analyst Michael Cyprys said he is more positive on the growth outlook for WisdomTree after the company received regulatory approval to cross-list their European Bitcoin ETP. The cross-listing expands the potential customer set to retail and institutional investors in the EU, said Cyprys, who also notes that WisdomTree recently applied with the SEC for approval of a Bitcoin ETF in the U.S. Cyprys has an Equal Weight rating and $6.75 price target on WisdomTree shares.
CLEANSPARK PURCHASES BITCOIN MINERS: CleanSpark (CLSK) announced Thursday it has secured multiple contracts for mining equipment. The company has now secured contracts for all of the equipment necessary for CleanSpark's mining operation to increase its bitcoin mining capacity to meet its stated objective of a total hash rate capacity of more than 1.1 EH/s by summer. Additionally, CleanSpark has now secured a total of 22,680 S19j Pro and S19 Pro Antminers for future delivery under annual contracts. These annual contracts are expected to provide an additional 2.23 EH/s in hash rate capacity. The units purchased under these contracts are expected to be delivered at an average rate of approximately 1,620 units per month over a 14-month period, with the first batch scheduled for delivery in August. The company expects that these new units will enable CleanSpark to increase its total mining production capacity to over 3.2 EH/s, following the delivery and deployment of all the equipment.
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, 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 3.7% this week at $61,208 in U.S. dollars, according to TradeBlock.