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.
1. MORGAN STANLEY SEES ‘NEW INSTITUTIONAL INVESTMENT CLASS’: In a report titled “Rapidly Morphing Thesis”, Morgan Stanley (MS) said bitcoin, which turned ten on Wednesday, and other cryptocurrencies will act as a “new institutional investment class,” Business Insider reported Thursday. The company estimated that hedge funds, venture capital firms and private equity houses have helped the total number of crypto funds rise by over 11% in 2018 alone, adding the number of funds has risen from 45 in 2016 to an estimated 220 this year. The bank noted that the value of assets managed at the funds has increased to $7.1B, from $675M in January 2017, meaning a $6.4B boom in crypto assets under management in under two years.
2. NASDAQ EYES CRYPTO MARKET MANIPULATION: Nasdaq (NDAQ) said it has spent decades developing tools to police securities, currencies and other markets and can use them to crack down on manipulation and other scams in the crypto market, Bloomberg reported Thursday. “Regulators, brokers and exchanges have surveillance teams that monitor activity constantly and advanced technologies to help capture and analyze abusive behaviors including pump-and-dump schemes, insider trading, wash trading as well as spoofing and layering,” the company said. Nasdaq licenses its market-surveillance technology to exchanges, including crypto exchange Gemini, which was founded by the Winklevoss twins.
3. COINBASE VALUED AT $8B: U.S. crypto exchange Coinbase raised an additional $300M in a funding round led by Tiger Global Management, valuing the firm at over $8B, Reuters reported Tuesday. The company, which booked revenue of $1B in 2017 and is expected to bring in $1.3B this year, will use the financing to expand operations and offer more crypto assets.
4. OVERSTOCK SUBSIDIARY, RWANDA SIGN MOU: Overstock.com (OSTK) announced Thursday that its blockchain-meets-property rights subsidiary, Medici Land Governance, has signed its second memorandum of understanding with an African nation to develop a blockchain-based platform to manage land governance and property rights. The latest MOU was signed with the Rwanda Land Management and Use Authority and the Rwanda Information Society Authority to implement MLG's technology to move Rwanda to a paperless, secure, corruption-proof, blockchain-based system of land governance.
5. CRYPTO CHATTER: JPMorgan (JPM) CEO Jamie Dimon said while blockchain technology is “real”, he does not “really give a s—t” about bitcoin and said it “is not the same as a fiat currency,” Business Insider reported Thursday. In addition, CNBC reported Thursday that BlackRock (BLK) CEO Larry Fink said the firm is “a huge believer in blockchain” but will not offer a bitcoin exchange-traded fund until cryptocurrencies become “legitimate.” “I do see one day where we could have electronic trading for a currency that could be a store of wealth,” Fink said. “But right now the world doesn’t need a store of wealth unless you need that store of wealth for things you should not be doing.” Meanwhile, Reggie Browne, senior managing director and global head of ETF trading at Cantor Fitzgerald, said he believes a bitcoin ETF will be approved “no time soon,” Business Insider reported Thursday. “It’s very difficult for the Securities and Exchange Commission to wrap their heads around a positive approval because there’s no data yet… the markets just aren’t here,” he 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, DPW Holdings (DPW), Kodak (KODK), Ideanomics (SSC), Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (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 0.9% this week to $6,375 in U.S. dollars, according to CoinDesk.
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Bitcoin
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Bitcoin
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Morgan Stanley
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Nasdaq
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OSTK
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JPMorgan
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BlackRock
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AMD
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Ault Global Holdings
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Eastman Kodak
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Riot Platforms
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Pareteum
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Srax
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