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, MASTERCARD PARTNER FOR NFT PURCHASES: In a Tuesday blog post, Prakash Hariramani, senior director of product at Coinbase (COIN), said, “Coinbase wants to simplify the user experience to allow more people to join the NFTs community. Just as we helped millions of people access Bitcoin for the first time in an easy and trusted way, we want to do the same for NFTs. That’s why we’re working with Mastercard (MA) to classify NFTs as 'digital goods,' allowing a broader group of consumers to purchase NFTs. And, coming soon we’ll 'unlock' a new way to pay using Mastercard cards. Coinbase recently announced Coinbase NFT, a peer-to-peer marketplace that will make minting, purchasing, showcasing, and discovering NFTs easier. Thanks to our work with Mastercard, we’ll be able to provide a better customer experience on Coinbase NFT, and plan on working to find ways to bring this opportunity to the broader ecosystem through Mastercard’s scale and global network.”
Citi analyst Peter Christiansen lowered the firm's price target on Coinbase on Wednesday to $300 from $415 and kept a Buy rating on the shares. The analyst's estimates and target price dropped to reflect the recent decline in digital asset prices. Since mid-November, total crypto market cap has declined 33%, from $2.95T to $1.98T, Christiansen said.
Additionally on Thursday, Reuters’ Mrinmay Dey and Hannah Lang reported that New York City Mayor Eric Adams said that his first paycheck from the job, which he is set to receive Friday, will be converted into cryptocurrency via Coinbase. The paycheck will arrive in ethereum and bitcoin.
ROBINHOOD DEBUTS CRYPTO WALLETS: In a Thursday blog post, Robinhood (HOOD) said, “We're excited to announce that the next phase of our Wallets program, the Beta program, is officially live. Starting today, we'll begin rolling out crypto Wallets to 1,000 customers from the top of the Wallets waitlist…By March, we will expand the program to 10,000 customers before rolling out to the rest of the WenWallets waitlist. This is the second major milestone in our Wallets rollout, which will enable Robinhood customers to send and receive their crypto from Robinhood to external crypto wallets, and fully connect Robinhood crypto holders to the greater blockchain ecosystem for the very first time... Over the duration of the Beta program, we will finalize the send and receive flows, add delightful QR scanning experiences, improve the transaction history interface, and add block explorer support to provide more insights into their on-chain transactions. We will also add the ability for customers to calculate the dollar amount of crypto to send/receive in terms of dollar amounts. Beta testers will have a daily limit of $2999 in total withdrawals and 10 transactions and will need to enable two-factor authentication.”
BAKKT, NEXO PARTNER FOR CRYPTO CUSTODY: Bakkt Holdings (BKKT) announced Wednesday a partnership with digital assets institution Nexo to custody cryptocurrency assets in the Bakkt Warehouse, the company's regulated custodian, which allows for safe and secure storage of bitcoin and ethereum. "The cryptocurrency market continues to expand at a robust pace, leading reputable crypto companies to diversify custody of assets. We are pleased that Nexo has chosen the Bakkt Warehouse as a trusted solution," said Dan O'Prey, Chief Product Officer, Crypto at Bakkt.
MARATHON INITITATED WITH BUY: BTIG analyst Gregory Lewis initiated coverage of Marathon Digital (MARA) on Tuesday with a Buy rating and $50 price target. Mara was an early mover in the bitcoin mining sector having started mining in 2017, Lewis said. The company currently has hash capacity of 33,000 rigs, which points to 1.9% of current global hash capacity, making it one of the largest publicly traded bitcoin miners by capacity, added the analyst. He believes the company is well positioned for the ongoing bitcoin mining up-cycle.
FED RELEASES PAPER ON U.S. CBDC: The Federal Reserve Board released a discussion paper on Thursday that examines the pros and cons of a potential U.S. central bank digital currency, or CBDC. It invites comment from the public and is the first step in a discussion of whether and how a CBDC could improve the safe and effective domestic payments system. The paper does not favor any policy outcome, the central bank said. The paper summarizes the current state of the domestic payments system and discusses the different types of digital payment methods and assets that have emerged in recent years, including stablecoins and other cryptocurrencies. It concludes by examining the potential benefits and risks of a CBDC and identifies specific policy considerations. "We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States," Federal Reserve Chair Jerome Powell said.
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 10% this week at $38,843 in U.S. dollars, according to TradeBlock.