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.
FACEBOOK’S LIBRA REBRANDS AS DIEM: The Libra Association, led by Facebook (FB), announced Tuesday that the body behind its cryptocurrency project is being renamed. The group, which was designed to build a legal framework and support the coin itself, has now been rebranded as the Diem Association. In a statement, the body said that the change represented a "new day for the project." It added: "As part of the effort to achieve regulatory approval and progress toward launch, Diem has recently attracted a group of world-class professionals to help lead the Association and Diem Networks, the subsidiary that is the regulated payment system operator. This includes the appointment of Dahlia Malkhi as the Association's CTO, Christy Clark as Chief of Staff, Steve Bunnell as CLO, and Kiran Raj as EVP for Growth and Innovation and Deputy General Counsel. Additionally, Diem Networks has recently announced the appointment of James Emmett as Managing Director, Sterling Daines as CCO, Ian Jenkins as Chief Financial and Risk Officer, and Saumya Bhavsar as General Counsel." With the team now in place, the Diem Association is prioritizing technological and operational readiness for launch.
VISA TO LAUNCH CREDIT CARD WITH BITCOIN REWARDS: Visa (V) will launch a credit card that rewards purchases in bitcoin, instead of the traditional cash or airline miles, in early 2021, cryptocurrency startup BlockFi announced Tuesday. The payments company has partnered with BlockFi for its "Bitcoin Rewards Visa Credit Card," which comes at an annual fee of $200. Users will receive 1.5% of their purchases back in the form of the digital asset. The service will initially be offered only in the United States and the shipping of cards will start in spring next year.
PAYPAL CEO SAYS CRYPTO SET TO GO MAINSTREAM: PayPal (PYPL) CEO Dan Schulman said the use of virtual currencies is on the path to mainstream adoption as more shops implement a “digital first” approach to payments, Bloomberg’s Amy Thomson reported Wednesday. “The entire world is going to come into digital first,” Schulman said, adding retailers are moving to accept payments through smartphones and QR codes and more consumers are beginning to use digital wallets, which “are natural complements to digital currencies.” PayPal announced in October that customers can buy, sell and hold cryptocurrencies and use the digital currency to make purchases at the 26M merchants on its network. When asked about competition, Schulman said he’s watching Ant Financial, an affiliate of Alibaba Group (BABA), as the company has had “tremendous success” in China with a comprehensive digital wallet that includes “all elements of financial services, all elements of shopping.”
PAYPAL PRICE TARGET RAISE: Mizuho analyst Dan Dolev raised the firm's price target on PayPal to $290 from $270 on Tuesday and kept a Buy rating on the shares. Mizuho's PayPal bitcoin user survey shows that nearly one-fifth of PayPal users have already traded bitcoin on the PayPal app and that 65% would use it as currency at PayPal's 28M merchants, Dolev said. Rising engagement can drive a "meaningful lift" to revenue and help offset some eBay headwinds next year, added the analyst. Dolev said that while bears fear mid-teens growth guidance from PayPal, he sees 20% revenue growth in 2021 as plausible.
FIDELITY SAYS BITCOIN NOT A STORE OF VALUE: Fidelity Digital Assets president Tom Jessop said bitcoin in still too volatile to act as a true store of value, though investors hope it will take on that role, Reuters’ Tom Wilson reported Thursday. “We use the word ‘potential store of value’ as bitcoin is still extremely volatile, and by any standard perhaps would not achieve the mantle of a true store of value,” Jessop said. “But aspirationally it is, and that’s one of the reasons why so many investors are now thinking about this space constructively.”
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 rose roughly 13.2% this week at $19,148 in U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Ticker changed to META
-5.87 (-2.04%)
Visa
-2.16 (-1.03%)
PayPal
+1.91 (+0.90%)
Alibaba
+5.71 (+2.19%)
AMD
-1.41 (-1.50%)
Nvidia
-5.715 (-1.06%)
OSTK
+
Ideanomics
-0.19 (-8.15%)
Riot Platforms
+1.115 (+13.06%)
Pareteum
+ (+0.00%)
Srax
-0.1 (-3.70%)