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.
PAYPAL ALLOWS USERS TO TRANSFER, RECEIVE CRYPTO: In a Tuesday company post, Jose Fernandez da Ponte, senior vice president and general manager of blockchain, crypto and digital currencies at PayPal (PYPL), said, “We are thrilled to announce that starting today, PayPal supports the native transfer of cryptocurrencies between PayPal and other wallets and exchanges. This feature has been consistently ranked by users as one of the most requested enhancements since we began offering the purchase of crypto on our platform. Available now to select U.S. users starting today and rolling out to all eligible U.S. customers in the coming weeks, this new functionality lets PayPal customers: Transfer supported coins into PayPal. Move crypto from PayPal to external crypto addresses including exchanges and hardware wallets. Send crypto to family and friends on PayPal in seconds, with no fees or network charges to send or receive. Allowing PayPal customers the flexibility to move their crypto assets into, outside of, and within our PayPal platform reflects the continuing evolution of our best-in-class platform and enables customers to interact with the broader crypto ecosystem. Customers who transfer their crypto into PayPal can extend the utility of their crypto by spending using our Checkout with Crypto product at millions of merchants. PayPal has also been granted a full Bitlicense by the New York Department of Financial Services, becoming the first company to convert a conditional Bitlicense into a full Bitlicense, signaling our commitment to responsible innovation and expanding the accessibility and utility of digital currencies while fully complying with regulatory guidelines and best practices.”
BITNILE INVESTS $12M IN ECOARK: BitNile (NILE) announced Thursday a strategic partnership and investment into Ecoark Holdings (ZEST). BitNile's subsidiary, Digital Power Lending, has agreed to purchase $12M of a new series of convertible preferred stock of Ecoark, which will be paid no later than June 29. Ecoark intends to deploy significant proceeds via its subsidiary White River towards an oil drilling program across its cumulative 30,000 acres of active mineral leases at both shallow, intermediate, and deep levels. Ecoark will also deploy additional proceeds via its subsidiary Agora Digital to provide BitNile with up to 78 MW of power within the State of Texas for digital asset mining capacity, subject to BitNile proceeding with this facility after having conducted the requisite due diligence. The Agora Digital power capacity would expedite BitNile's recently announced plans to significantly expand its Bitcoin mining production capacity, including growing its number of deployed bitcoin miners to 20,600, an expected mining production capacity of 2.24 exahashes per second.
MARATHON DIGITAL PRODUCES 268 BITCOIN IN MAY: Marathon Digital Holdings (MARA) published unaudited bitcoin production and miner installation updates on Thursday for May 2022. Total number of miners installed and awaiting energization increased to 19,000 miners. Current operating mining fleet consists of 36,830 active miners producing approximately 3.9 EH/s. The company increased total bitcoin holdings to 9,941 bitcoin with a fair market value of $315.1M and produced 268 self-mined bitcoin during May 2022. Production was lower than expected due to ongoing maintenance and downtime at the power plant in Hardin, MT. These issues, which included problems between the induced draft and forced draft fans, the buildup of particulate matter that required cleaning, and GSU transformer testing, in aggregate reduced Marathon's potential bitcoin production by approximately 47% during the month. As previously announced, Marathon plans to transition out of Hardin, MT to more sustainable sources of power during the third quarter of 2022. Cash on hand was approximately $59.6M and total liquidity, now defined as unrestricted cash and available credit facilities, was approximately $86M. Given the current construction and installation schedules coupled with the Ccmpany's pipeline of potential new hosting and power arrangements, Marathon continues to expect all 199,000 miners, producing approximately 23.3 EH/s, to be installed and energized by early 2023.
SILVERGATE ASSUMED WITH EQUAL WEIGHT: Morgan Stanley analyst Manan Gosalia assumed coverage of Silvergate Capital (SI) on Thursday with an Equal Weight rating and $88 price target. In the near-term, the company is a rate play with a growing low-cost deposit base and rising asset yields, Gosalia said. Longer term, the bank is working to unlock value from a stablecoin offering using the recently acquired Diem platform, said the analyst. Silvergate's "strong correlation to crypto prices amid volatile markets" drives the analyst's neutral rating.
BENCHMARK STARTS CANAAN WITH BUY: Benchmark analyst Michael Legg initiated coverage of Canaan (CAN) on Tuesday with a Buy rating and $9 price target. Canaan offers an "indirect way" to invest in the growth of bitcoin as it is the second largest player in the "oligopolistic" bitcoin mining equipment industry, Legg said. The analyst added the company is well positioned with a $400M cash position and a new mining initiative that is gaining traction.
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. Ideanomics (IDEX), Riot Blockchain (RIOT), Overstock (OSTK), 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 about 1% this week at $29,401 in U.S. dollars, according to TradeBlock.