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.
U.S. TREASURY OUTLINES CRYPTO REGULATION FRAMEWORK: The U.S. Department of the Treasury adopted a fact sheet on working with foreign regulators to monitor the cryptocurrency market. The Treasury Department said on Thursday: "The Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Commerce, the Administrator of the U.S. Agency for International Development... delivered to President Biden a framework for interagency engagement with foreign counterparts and in international fora as directed in the President's Executive Order on Ensuring Responsible Development of Digital Assets...The Executive Order outlined an interagency approach to address the risks and harness the potential benefits of digital assets and their underlying technology, including through international engagement to adapt, update, and enhance adoption of global principles and standards for how digital assets are used and transacted. The Executive Order also directs the Administration to promote development of digital asset and central bank digital currencies, CBDC, technologies consistent with our values and legal requirements."
VOYAGER FILES FOR CHAPTER 11, DELISTS: Voyager Digital (VYGVF) announced Wednesday that it has commenced a voluntary Chapter 11 process to "maximize value for all stakeholders." As part of this process, the company and its main operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the Southern District of New York. The company intends to seek recognition of the Chapter 11 case of Voyager in the Ontario Superior Court of Justice pursuant to the Companies' Creditors Arrangement Act. The proposed plan of reorganization would, upon implementation, resume account access and return value to customers. Under this plan, which is subject to change given ongoing discussions with other parties, and requires court approval, customers with crypto in their account will receive in exchange a combination of the crypto in their account, proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens. The company continues to evaluate all strategic alternatives to maximize value for stakeholders.
Voyager announced Thursday that it has given notice to the Toronto Stock Exchange that the company will voluntarily delist its common shares from the TSX. "This action is being taken by the company in response to the TSX notifying the company that the TSX would be conducting a review of the eligibility for continued listing on TSX of the company's common shares as a result of the company and its main operating subsidiaries filing voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the Southern District of New York," Voyager said in a statement. Due to this review, trading in Voyager shares has been suspended by the TSX. Voyager has also been notified that, due to its bankruptcy filing, the company no longer qualifies for the OTCQX International. Voyager plans to apply to the Canadian Securities Exchange to transition the trading of its common shares from the TSX to the CSE.
Additionally on Thursday, the Wall Street Journal’s David Benoit reported The Federal Deposit Insurance Corporation is looking into Voyager Digital's marketing after customers learned they didn't have the protection they thought on their deposit accounts for cryptocurrency purchases. Voyager froze all activity, including withdrawals on $350M in customer deposits that are stored at Metropolitan Commercial Bank (MCB). The funds are expected to be paid in full to the customers, but that may not be the case for crypto assets held at Voyager.
COINBASE DOWNGRADE: Atlantic Equities analyst Simon Clinch downgraded Coinbase (COIN) on Wednesday to Neutral from Overweight with a price target of $54, down from $95, telling investors that he is changing his rating and lowering his target "materially" given incremental concerns for Coinbase and the cryptoeconomy in the near- to medium-term. He has worries about the company's ability to attract talent and competitive concerns regarding the spread of misinformation over the company's financial strength and consumer asset protections. Having seen his hopes for some stabilization in crypto prices and volumes "dashed," he has reviewed the downside risk of a prolonged and more severe crypto winter and reduced expectations in his base case, Clinch said.
CANAAN INITIATED WITH BUY: H.C. Wainwright analyst Kevin Dede initiated coverage of Canaan (CAN) on Wednesday with a Buy rating and $5 price target. The company is a Chinese-domiciled manufacturer of bitcoin mining machines and artificial intelligence-directed semiconductors, Dede said. He thinks self-mining may bolster the company's results starting later this year when artificial chip development "may carry less influence over the immediate future." The analyst likes Canaan's "technical skill and rising profile."
MINER UPDATES: Marathon Digital Holdings (MARA) published unaudited bitcoin production and miner installation updates for June on Thursday. The company produced 707 self-mined bitcoin during Q2, an 8% increase from 654 bitcoin mined in Q2 2021. Year-to-date through June 30, the company produced 1,966 bitcoin, a 132% increase over the same time period in the prior year. Total bitcoin holdings are 10,055 bitcoin with a fair market value of $198.9M.
CleanSpark (CLSK) released its unaudited bitcoin production and operations update for the calendar year-to-date ending June 30 on Wednesday. June monthly production was 339, calendar year-to-date production ending June 30 was 1863, total bitcoin holdings as of June 30 were 561 and total bitcoin converted for operations and growth in June were 328.
Hut 8 Mining (HUT) announced Wednesday that it increased its bitcoin holdings by 328 in the period ending June 30. A total of 328 Bitcoin were mined, resulting in an average production rate of 10.9 bitcoin per day and 100% of the self-mined bitcoin in June were deposited into custody, consistent with the company’s longstanding HODL strategy. Total bitcoin balance held in reserve is 7,406 as of June 30.
Sphere 3D (ANY) provided results of its bitcoin mining operation on Thursday as of June 30. From June 1 through June 30, Sphere 3D's mining operation produced 12.19 bitcoin, or an average of 0.41 bitcoin daily. The daily production level remained flat compared to May. Since the company began its mining operations during the first quarter of 2022, it has produced 55.26 coins and held 49.23 bitcoin on June 30. This represented a valuation of about $1M based on the bitcoin price of $19,889 on June 30, 2022. The company continues to employ a HODL strategy and has not liquidated bitcoin since commencing mining operations.
BitNile Holdings (NILE) published an unaudited update on bitcoin production and miner deliveries on Wednesday. During the month of June 2022, BitNile self-mined 46.4 bitcoin. To date, BitNile has mined a total of 256.5 bitcoin. As of June 30, 2022, BitNile held 140.8 bitcoin and currently has no plans to sell.
Core Scientific (CORZ) announced production and operational updates for June on Tuesday. Core Scientific's self-mining operations produced 1,106 bitcoins in June, averaging 36.9 bitcoins per day, a slight increase from the prior month. During the month of June, the company sold 7,202 bitcoins at an average price of approximately $23,000 per bitcoin for total proceeds of approximately $167M. As of June 30, the company held 1,959 bitcoins and approximately $132M in cash on its balance sheet.
Riot Blockchain (RIOT) announced production and operations update for June on Wednesday. In June 2022, Riot produced 421 bitcoin, an increase of approximately 73% vs. June 2021 production of 243 bitcoin. As of June 30, 2022, Riot held approximately 6,654 bitcoin, all produced by the company's self-mining operations. In June 2022, Riot sold 300 bitcoin, generating net proceeds of approximately $6.2M.
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. Ideanomics (IDEX), Riot Blockchain, Overstock (OSTK), 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 about 10% this week to $21,338 in U.S. dollars, according to TradeBlock.
Bitcoin
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Bitcoin
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Bitcoin
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Ethereum
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Litecoin
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Dogecoin
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Metropolitan Bank
-1.33 (-1.98%)
Coinbase
-2.53 (-4.40%)
Canaan
-0.085 (-2.29%)
Marathon Digital
-0.165 (-2.36%)
CleanSpark
-0.145 (-3.23%)
Hut 8 Corp.
-0.06 (-3.75%)
Sphere 3D
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BitNile
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Core Scientific
-0.06 (-3.28%)
Riot Platforms
-0.185 (-3.50%)
AMD
-1.49 (-1.88%)
Nvidia
-4.03 (-2.54%)
OSTK
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Pareteum
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Srax
-0.115 (-3.74%)
Voyager Digital
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