Square developing bitcoin-focused business as PayPal raises U.S. crypto purchase limits
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.
SQUARE CREATING BITCOIN-FOCUSED BUSINESS: Square (SQ) CEO Jack Dorsey said via Twitter on Thursday: "Square is creating a new business (joining Seller, Cash App, & Tidal) focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services. Our primary focus is #Bitcoin. Its name is TBD. Like our new #Bitcoin hardware wallet, we're going to do this completely in the open. Open roadmap, open development, and open source. @brockm is leading and building this team, and we have some ideas around the initial platform primitives we want to build. How is this different from @SqCrypto? Square doesn't give direction to @SqCrypto, only funding. They chose to work on LDK, and are doing an incredible job! TBD will be focused on creating a platform business, and will open source our work along the way."
PAYPAL RAISES U.S. CRYPTO PURCHASE LIMITS: Jose Fernandez da Ponte, VP & GM, Blockchain, Crypto and Digital Currencies at PayPal (PYPL), said in a Thursday post to the company's site: "Since launching our cryptocurrency capabilities in the U.S. in October 2020, we have been actively engaging with our customers to better understand their needs to help ensure we are providing a trusted and secure platform to buy, hold, sell and checkout with cryptocurrency. As part of our efforts to meet the ever-changing needs of our customers, we are pleased to announce that we have recently raised the purchase limits of cryptocurrency for eligible PayPal customers in the U.S. to $100,000 per week with no annual purchase limit. These changes will enable our customers to have more choice and flexibility in purchasing cryptocurrency on our platform."
The move comes after Susquehanna analyst James Friedman raised the firm's price target on PayPal on Wednesday to $360 from $330 and kept a Positive rating on the shares. The analyst met with management and raised estimates following commentary on its recently announced pricing changes, crypto engagement, and potential innovative wallet features.
HIVE BLOCKCHAIN PURCHASES MINING COMPUTERS: HIVE Blockchain Technologies (HVBT) announced Monday the purchase and immediate hashing of 3,019 MicroBT WhatsMiner M30S dedicated mining computers. These new machines have an aggregate hash power of 264 Petahash per second. The integration of these miners into HIVE's systems will be immediate upon closing and will increase HIVE's overall bitcoin operating hashrate by approximately 46%. With the addition of these 3,019 MicroBT M30S miners, HIVE's aggregate operating hash rate increases from approximately 566 PH/s to 830 PH/s. The miners to be acquired in the transaction are already located onsite at HIVE's facilities in Lachute, Quebec and Grand Falls, New Brunswick. The miners are being purchased from Foundry Digital. As part of the partnership, HIVE will contribute its bitcoin hashpower to Foundry USA Pool going forward, whose other major customers include Blockcap, Hut8, Bitfarms and Foundry itself, among others. As consideration for the sale of the miners, Foundry will be issued cash and 1.5M warrants of the company, subject to regulatory approval. Each full warrant will entitle the holder to acquire one common share for C$3.11 for a period of two years.
CLEANSPARK PARTNERS WITH COINMINT: CleanSpark (CLSK) announced Wednesday that it has entered into an agreement with a new partner, Coinmint, pursuant to which it expects to deploy nearly 25 MW of its Bitmain S19 Pro miners at a location operated by Coinmint. CleanSpark plans to deploy approximately 750 PH/s in hashrate capacity at Coinmint's facility in Massena, New York between July and September. To support this hashrate, Coinmint has agreed to provide 25 MW of power, provide operations support and commit to 98% uptime. The company expects this agreement to rapidly increase its overall hashrate across all bitcoin mining locations to 1.2 EH/s upon installation and believes that it will allow CleanSpark to maximize its bitcoin production.
BNY MELLON NAMED ASSET PROVIDER BY GRAYSCALE: Grayscale Investments announced Tuesday that it has selected BNY Mellon (BK) as an asset servicing provider for Grayscale Bitcoin Trust (GBTC), the flagship product of Grayscale Investments. Through this agreement, BNY Mellon will provide Grayscale Bitcoin Trust with fund accounting and administration effective October 1. Additionally, it is anticipated that BNY Mellon will provide transfer agency and ETF Services for the Grayscale Bitcoin Trust upon its conversion to an ETF.
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 6% this week to $31,907 in U.S. dollars, according to TradeBlock.