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.
MASSMUTUAL BUYS $100M OF BITCOIN: Bitcoin provider NYDIG announced Thursday that Massachusetts Mutual Life Insurance Company has purchased a minority stake in the company. Along with a $5M equity investment in NYDIG, MassMutual has also purchased $100M in bitcoin for its general investment account in a transaction facilitated by NYDIG. The firm’s bitcoin position is held on NYDIG’s secure, audited, and insurgsed custody platform. MassMutual’s equity investment comes during a period of substantial growth for NYDIG, which now has over $2.3B of digital asset balances under custody. Tim Corbett, CIO of MassMutual said, “We believe that having an equity stake in NYDIG as well as a Bitcoin position in our general investment account will help us deliver long-term value to our policyowners. We look forward to further exploring additional ways to work with NYDIG, consistent with our ongoing focus on innovation and diversification.”
G7 FINANCE OFFICIALS BACK NEED FOR CRYPTO REGULATION: Group of Seven finance ministers and central bankers strongly supported the need to regulate digital currencies in a virtual meeting of officials, Reuters' Andrea Shalal and Christian Kraemer reported Monday, citing the U.S. Treasury Department. German Finance Minister Olaf Scholz raised concerns about authorizing the launch of Facebook’s (FB) Diem, which recently changed its name from Libra to stress a simpler, revamped structure. "A wolf in sheep's clothing is still a wolf,” he said, “It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed. We must do everything possible to make sure the currency monopoly remains in the hands of states.” The G7 finance officials discussed ongoing responses to “the evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities…There is strong support across the G7 on the need to regulate digital currencies.”
SINGAPORE’S DBS TO ESTABLISH CRYPTO EXCHANGE: DBS Group Holdings (DBSDY) will start a members-only digital exchange for cryptocurrencies for firms and wealthy customers, while enabling fund raising via asset tokenization, Bloomberg’s Chanyaporn Chanjaroen reported Thursday. The exchange is a partnership with the Singapore Exchange (SPXCF), which will own 10%, and services will include asset tokenization, secondary trading of digital assets and custody services. The Monetary Authority of Singapore gave an in-principle approval to the bourse to trade assets from shares, bonds and private-equity funds. Trading will start as early as next week.
CITI DOWNGRADES MICROSTRATEGY: Citi analyst Tyler Radke downgraded MicroStrategy (MSTR) on Tuesday to Sell from Neutral with a price target of $250, up from $200. The recent rally in the shares is "overextended," said Radke, who sees "incremental risks to the story" following an announced $400M convertible note to fund even more bitcoin purchases. Recent insider selling has been "significant and broad based," and suggests shares may be overvalued, the analyst said. Much of the management team may not be as optimistic on bitcoin or MicroStrategy's fundamentals as CEO Michael Saylor, he added. Radke said he is concerned that the company could be losing focus on execution with CEO Saylor's "disproportionate focus" on bitcoin.
MARATHON PURCHASES 10,000 MINERS: Marathon Patent Group (MARA) announced Wednesday it has entered into a contract with Bitmain to purchase 10,000 Antminer S-19j Pro ASIC Miners. Under the terms of the agreement, Marathon will receive an initial batch of 6,000 S-19j Pro Miners in August 2021 and the remaining 4,000 miners will be delivered in September 2021. Once all of Marathon's purchased miners are delivered and fully deployed, the company's mining portfolio will consist of 33,560 state of the art ASIC miners, generating 3.56 EH/s. As a result, the company will be consuming approximately 100 MWs of power, the maximum amount available at the company's data center in Hardin, MT. To continue expanding its operations, the company is working with its energy partner to open a renewable energy powered data center in the northeastern United States.
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 5.6% this week at $17,938 in U.S. dollars, according to TradeBlock.
MicroStrategy
+0.12 (+0.04%)
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Ticker changed to META
-0.13 (-0.05%)
DBS Group
+ (+0.00%)
Singapore Exchange
+ (+0.00%)
Marathon Digital
+ (+0.00%)
AMD
+ (+0.00%)
Nvidia
-0.205 (-0.04%)
OSTK
+
Ideanomics
+ (+0.00%)
Riot Platforms
+ (+0.00%)
Pareteum
+ (+0.00%)
Srax
-0.04 (-1.56%)