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.
BAKKT TO BECOME PUBLIC: Bakkt and VPC Impact Acquisition (VIH) announced Monday that they have entered into a definitive agreement for a business combination that will result in Bakkt becoming a publicly traded company with an enterprise value of approximately $2.1B. The combined company will be renamed Bakkt and will be listed on the New York Stock Exchange. The companies said, “Since its founding nearly three years ago, Bakkt has enabled institutions and consumers to buy, sell, store and spend digital assets. Bakkt's platform, soon to be made widely available through the new Bakkt App, will enable incremental consumer spending, reduce traditional payment costs and bolster loyalty programs, adding value for all key stakeholders within the payments and digital assets ecosystem. In building its platform, Bakkt leveraged IntercontinentalExchange's (ICE) ability to create secure and regulated market infrastructure, to make Bakkt a trusted platform for digital assets.” Leading Bakkt as CEO will be Gavin Michael, whose appointment takes effect immediately. Michael, who served most recently as head of technology for Citi's (C) global consumer bank, succeeds David Clifton, Bakkt's interim CEO, who will join the combined company's board at the closing of the business combination. The business combination values the combined company at an enterprise value of approximately $2.1B and is expected to result in over $500M of cash on the combined company's balance sheet. The business combination is expected to close in Q2.
WINKLEVOSS TWINS CONSIDER TAKING GEMINI PUBLIC: Cameron and Tyler Winklevoss, the billionaire twins behind digital asset firm Gemini Trust Co., said they are mulling taking the firm public as cryptocurrency interest surges, Bloomberg’s Olga Kharif reported Thursday, citing Cameron Winklevoss. “We are definitely considering it and making sure that we have the option,” he said. “We are watching the market and we are always having internal discussions on whether it makes sense for us at this point in time. We are certainly open to it.” An initial public offering, direct listing or merger with a special purpose acquisition company would be the latest attempt by early bitcoin advocates like the Winklevoss twins to unlock digital wealth. The remarks come after Gemini announced the launch of the Gemini Credit Card, which will offer up to 3% back in bitcoin or other cryptocurrencies on every purchase made.
GRAYSCALE INFLOWS HIT $3.3B IN Q4: Grayscale Investments released its 4Q20 Grayscale Digital Asset Report as well as a summary of 2020 activity for the firm on Thursday. Interest in Bitcoin investment products soared in 2020, with each consecutive quarter setting a new record for the firm’s inflows. In the final quarter of 2020, Grayscale raised $3.3B in total, more than tripling its previous record of $1.05B raised in 3Q20. Notably, Grayscale raised nearly $1B in the last week of December before the quarter closed. In 2020, Grayscale raised more than $5.7B across its family of investment products, more than four times the $1.2B cumulative inflows the firm received from its inception in 2013 through the end of 2019. While the firm began 2020 with $2B in assets under management, it now holds more than $24.7B in assets as of January 13, 2021. Institutional investors participated meaningfully in 4Q20, with 93% of capital inflows to Grayscale’s products coming from this segment of investors. The average commitment of institutions also rose dramatically, from an average of $2.9M in 3Q20 to $6.8M in 4Q20.
BITGO HIRES CCO: Digital asset financial services provider BitGo announced Wednesday it has appointed Jeff Horowitz as chief compliance officer to oversee the company’s Compliance and AML programs across the entire enterprise. For the past two years, Jeff was the CCO for Coinbase (COIN), where he led the firm’s global compliance program, managed regulatory and bank partner relationships and helped to shape Crypto, AML and FATF regulation with both foreign and domestic regulators. “Jeff brings an extraordinary level of experience and insight that is vital to BitGo’s future growth, helping us gain even greater traction into new markets, expand our product offerings and strengthen our compliance and risk framework,” said CEO Mike Belshe.
BITCOIN COULD HIT $112,000: Standpoint Research analyst Ronnie Moas announced Wednesday a $56,000 to $112,000 price target range for bitcoin in 2021. The analyst said he sees a "good chance" of bitcoin hitting the top end of the range, saying demand will be significantly higher and the available supply for sale will be significantly lower in 2021. If an exchange traded fund is approved by the SEC, the price of bitcoin could double "overnight," Moas said. The analyst recommends not selling any bitcoin until after an announcement of an ETF and believes the market is expecting the approval before year-end.
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 10.9% this week at $36,832 in U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
VPC Impact Acquisition
+0.47 (+3.10%)
IntercontinentalExchange
-0.6 (-0.52%)
Citi
-2.18 (-3.16%)
Coinbase
+ (+0.00%)
AMD
+0.21 (+0.23%)
Nvidia
+2.72 (+0.52%)
OSTK
+
Ideanomics
+0.27 (+8.21%)
Riot Platforms
-2.25 (-7.79%)
Pareteum
+ (+0.00%)
Srax
-0.04 (-1.22%)