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.
FIDELITY SEES MARCH LAUNCH FOR BITCOIN CUSTODY SERVICE: Fidelity Investments is aiming for a March launch date for its bitcoin custody service after announcing in October it would offer a range of crypto products for large investors, Bloomberg reported Tuesday. Bitcoin storage will be the first service available and ether custody is expected to follow. In a Thursday blog post, the company said, “We have continued to build the technical and operational capabilities needed for securing, trading and supporting digital assets with the exacting oversight required by institutional investors. We are currently serving a select set of eligible clients as we continue to build our initial solutions…Our initial clients are an important part of our final testing and process refinement periods, which will eventually enable us to provide these services to a broader set of eligible institutions…We are committed to exceeding the requirements and standards of existing solutions with both our custody platform and trading venue — providing a combination of security and a central point of market access, disrupting the obfuscated nature of trading digital assets today.”
BINANCE ENABLES CREDIT CARD CRYPTO PURCHASES: On Thursday, cryptocurrency exchange Binance announced it would allow debit and credit card payments for digital currencies through its partnership with Simplex. In a statement, the company said, “As part of Binance’s larger mission to increase the adoption and mainstream accessibility of crypto, Binancians are now able to use Visa (V) and MasterCard (MA) to buy BTC, ETH, LTC and XRP, and start trading on Binance.com within minutes.”
NASDAQ WORKS WITH 7 CRYPTO EXCHANGES: Nasdaq (NDAQ) has granted access to its proprietary surveillance technology to seven cryptocurrency exchanges, including Gemini and SBI Virtual Currency, Forbes reported Wednesday. A team of roughly 20 people assisted in a due-diligence process to ensure that any exchange that wants to use the technology, which scans for fraudulent transaction patterns, is technically able and morally inclined to use the software wisely. Tony Sio, Nasdaq’s head of exchange and regulator surveillance, said, “Historically, we don’t do such a large vetting process for our clients because they are much more well-known. But as we started working with less well-known names, startups, then we realized we needed to do this check process.”
CRYPTO STARTUP ANNOUNCES LAYOFFS: On Thursday, nonprofit crypto startup NEM Foundation released a statement saying that it had restructured the organization and proposed a budget to cut its burn rate by 60%. The company said it only has enough funds to operate for one additional month meaning itwon’t be able to support the current headcount, partnerships and projects. “When the new council arrived on January 1, 2019, we opened the books and saw the results of 2018. We saw a lot of talented people who were working hard, but not aligned with the same goals. We saw efforts being duplicated, and inconsistent metrics of success. We saw very little accountability for funds and questionable ROI, leading to a burn rate of 9M XEM per month. In terms of running an effective organization, the existing structure failed. Maybe that didn’t seem like a big problem when the XEM price was high, but it’s a very big problem as we seek to sustain a viable organization in the ‘Crypto Winter’’, the company said. “The XEM exchange rate has suffered catastrophic drops from this time a year ago, just as many other ambitious cryptocurrency projects have suffered, now the NEM Foundation is facing challenging budget decisions.”
NVIDIA LOWERS REVENUE VIEW: In a Monday announcement, NVIDIA (NVDA) lowered its revenue guidance for the fourth quarter to $2.2B from previous guidance of $2.7B. The company said the cut reflected weaker than forecasted sales of its Gaming and Datacenter platforms, noting previous guidance in Gaming had embedded a sequential decline due to excess mid-range channel inventory following the crypto-currency boom. The reduction in that inventory and its impact have proceeded largely inline with management's expectations, however deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs, the company said. Following the announcement, Benchmark analyst Gary Mobley lowered his price target for Nvidia to $190 from $240 saying the shortfall was attributed to more aggressive inventory clearing from the crypto mining bust and slower than expected sales of Nvidia's latest RTX 2K Turing GPU cards. In addition, BMO Capital analyst Ambrish Srivastava lowered his price target on Nvidia to $130 from $175 noting that he was already modeling no growth in 2019 and Nvidia's gaming business had previously benefited from "an unprecedented uplift in ASPs and units from a 'not to-be repeated' crypto-mania".
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia in select research. Overstock (OSTK), DPW Holdings (DPW), Kodak (KODK), Ideanomics (IDEX), 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 3.5% this week to $3,428 in U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Visa
+4.22 (+3.13%)
MasterCard
+2.3 (+1.09%)
Nasdaq
+0.28 (+0.32%)
Nvidia
+1.71 (+1.19%)
AMD
-0.1 (-0.41%)
OSTK
+
Ault Global Holdings
+ (+0.00%)
Eastman Kodak
-0.02 (-0.69%)
Ideanomics
+ (+0.00%)
Riot Platforms
+ (+0.00%)
Pareteum
+0.03 (+1.19%)
Srax
-0.14 (-4.05%)