PayPal's Venmo launches 'crypto on Venmo' as Binance.US hires former top bank regulator
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.
VENMO LAUNCHES ‘CRYPTO ON VENMO’: PayPal’s (PYPL) Venmo announced the launch of crypto on Venmo on Tuesday, a new way for Venmo's over 70M customers to buy, hold and sell cryptocurrency directly within the Venmo app. The company said, “crypto on Venmo offers customers a way to start their crypto journey alongside the many ways they already use Venmo to spend and manage their money. With crypto on Venmo, customers can view cryptocurrency trends, buy or sell crypto, and access in-app guides and videos to help answer commonly asked questions and learn more about the world of crypto.” Customers using crypto on Venmo can choose from four types of cryptocurrency: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. When they make transactions, customers can also choose to share their crypto journey with their friends through the Venmo feed. Additionally on Tuesday, Maximillian Friedrich, a top fintech analyst for Cathie Wood, said he found PayPal's Venmo is the "least competitive" crypto trading app. After comparing key features of Cash App, Venmo, and Coinbase (COIN), the analyst said that Venmo is the least appealing app because it offers fewer currencies and has higher fees. "Venmo seems least competitive given mostly higher fees than Cash App/Coinbase while offering signific. less currencies than Coinbase," Friedrich said.
BINANCE.US HIRES FORMER TOP BANK REGULATOR: Binance.US announced Tuesday that former Acting Comptroller of the Currency Brian Brooks is joining the company as CEO, effective May 1, 2021. From May 2020 to January 2021, Brooks served as Acting Comptroller of the Currency, where he was the administrator of the federal banking system and the chief executive of the 3,500-employee federal agency responsible for chartering and supervising banks comprising 70% of all banking activity in the United States. Changpeng Zhao, Founder and CEO of Binance, the world’s largest cryptocurrency exchange which licenses its matching engine and wallet technologies to Binance.US, said, “Brian is an esteemed leader with an unparalleled blend of experience across traditional financial services, government, and the digital assets industry. Binance.US’s ability to attract an executive of Brian’s caliber is a testament to the strength of its platform. His knowledge and expertise will be invaluable as Binance.US continues to expand.”
COINBASE INITIATIONS: Rosenblatt analyst Sean Horgan initiated coverage of Coinbase on Tuesday with a Buy rating and $450 price target. The analyst is "bullish" on the stock over the long term as the company benefits from the growing adoption and acceptance of cryptocurrency, even though he is "more cautious" as the stock faces downside risk from a drawdown in the price of crypto. Horgan adds that while sustainable long-term growth is less uncertain, his expectations could also be "potentially conservative" given upside risk from institutional adoption and subscription revenue growth. Additionally, Mizuho analyst Dan Dolev initiated coverage on Wednesday of Coinbase with a Neutral rating and $285 price target. The company is "major share gainer" and offers "best in class" user engagement, but the risk of pricing pressure is offsetting the "abundant" opportunities for the stock, the analyst said. Dolev added that 80% of the company's total revenue is reliant on retail transaction fees, and that Coinbase has a "significant user overlap with PayPal and Square's (SQ) Cash App”.
BAILLIE GIFFORD BACKS BLOCKCHAIN.COM: Blockchain.com CEO Peter Smith announced in a Tuesday blog post that Baillie Gifford has invested $100M in the company, the largest single investment in Blockchain.com to date. The CEO said, “For those who aren’t familiar, Baillie Gifford is a storied 110 year-old asset management firm who were early investors in some of the biggest tech-enabled companies over the last 20 years. They keep a low profile, have exacting standards, and are invaluable partners to Blockchain.com as we grow. As one of their first investments in a crypto company, we’re honored to include them on our journey to bring the next 1B people into crypto. It’s also a validation that a balanced and diversified retail/institutional business has incredible growth potential in the coming years. With additional resources and support we’ll continue to relentlessly improve our product, grow the business, and evangelize the crypto space.”
CLEANSPARK PRODUCES OVER 144 BITCOINS: CleanSpark (CLSK) announced an update on Monday on its unaudited bitcoin production and holdings through March 31 and April 18. In the quarter ended March 31, the company produced more than 144 bitcoins and has produced 205 bitcoins since acquiring its mining operations on December 10, 2021. As of April 18, CleanSpark is holding more than 143 bitcoins on its balance sheet, all of which have been produced by its mining operations. Total hashrate capacity is expected to increase to over 1.1 EH/s by August and exceed 3.2EH by September 2022. At current difficulty rates, 1.1 EH/s would represent 6-7 bitcoins a day and a hashrate at 3.2 EH/s it would represent 18-20 bitcoins per day. The growth from 1.1 EH/s to 3.2 EH/s is expected to occur at an average rate of 160 PH/s per month from September 2021 to September 2022. At current difficulty rates, this would result in bitcoin production increasing by approximately one additional bitcoin per day every month.
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 dropped roughly 22% this week at $48,694 in U.S. dollars, according to TradeBlock.