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.
NASDAQ ESTABLISHES DIGITAL ASSETS BUSINESS: Nasdaq (NDAQ) announced Tuesday the launch of "Nasdaq Digital Assets," a new business that will power the digital asset ecosystem. "Nasdaq Digital Assets builds upon the successful solutions we have introduced in recent years to serve the digital assets ecosystem, including marketplace technology for digital asset exchanges, crypto-native anti-financial crime offerings, and crypto-related index solutions for tradable products," said Adena Friedman, President and CEO. "The technology that underpins the digital asset ecosystem has the potential to transform markets over the long-term. To deliver on that opportunity, our focus will be to provide institutional-grade solutions that bring greater liquidity, integrity, and transparency to support the evolution." Nasdaq Digital Assets will initially develop an advanced custody solution that will incorporate liquidity and execution services to address industry challenges around connectivity, availability, and efficiency. Nasdaq Digital Assets will be led by Ira Auerbach, Senior Vice President, Head of Digital Assets, who will oversee the team's strategic roadmap, growth targets, and product development.
MICROSTRATEGY ACQUIRES 301 BITCOIN: In a Tuesday regulatory filing, MicroStrategy (MSTR) announced that, during the period between August 2 and September 19, MicroStrategy acquired approximately 301 bitcoins for approximately $6M in cash, at an average price of approximately $19,851 per bitcoin. MicroStrategy purchased the bitcoins using excess cash. As of September 19, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 130,000 bitcoins, which were acquired at an aggregate purchase price of approximately $3.98B and an average purchase price of approximately $30,639 per bitcoin, inclusive of fees and expenses.
COINBASE IMPLEMENTS NEW FEE STRUCTURE: In a Monday company statement, Coinbase (COIN) said, “On Tuesday, September 20 at approximately 5pm ET, Coinbase Exchange will implement a new fee structure to account for changes in global crypto trading volumes and asset prices, lowering the monthly trading volume required to qualify for the mid and upper tiers of our fee schedule. The new fee schedule will be implemented on Coinbase Exchange, Pro, and Advanced Trade.In order to respond to client needs, Coinbase periodically updates pricing. All fee updates are shared prior to being implemented.”
On Wednesday, Coinbase Cloud announced the launch of Node, a platform for web3 developers. In a blog post, Luv Kothari, group product manager at Coinbase Cloud and Sriram Raman, product manager at Coinbase Cloud said, "Web3 development is complex. One needs to learn new programming languages, blockchain technologies, and on top of that, there are many protocols to support. Coinbase Cloud is committed to helping Web3 developers do what they do best... BUIDL. That's why we're taking our experience developing Web3 products for DeFi, staking and blockchain infrastructure and making this technology accessible for free to developers around the world, starting with the launch of Node. Node empowers developers to build and monitor their Web3 applications from an easy-to-use platform with instant read/write access to blockchains and powerful data indexers to speed up responses.”
Additionally on Thursday, Coinbase responded to a Wall Street Journal article highlighting Coinbase's client-driven activities, which Coinbase said "they seem to confuse with proprietary trading”. In a blog post, the company said: "Unlike many of our competitors, Coinbase does not operate a proprietary trading business or act as a market maker. In fact, one of the competitive strengths of our Institutional Prime platform is our agency only trading model, where we act only on behalf of our clients. As a result, our incentives and our clients' incentives are aligned by design. Coinbase does, from time to time, purchase cryptocurrency as principal, including for our corporate treasury and operational purposes. We do not view this as proprietary trading because its purpose is not for Coinbase to benefit from short-term increases in value of the cryptocurrency being traded."
WINTERMUTE LOSES $160M IN DEFI HACK: Wintermute founder and CEO Evgeny Gaevoy disclosed in a series of Tuesday tweets that the crypto market maker has lost roughly $160M in a hack. He said, "Short communication on the ongoing Wintermute hack...We've been hacked for about $160M in our defi operations. Cefi and OTC operations are not affected...We are solvent with twice over that amount in equity left...If you have a MM agreement with Wintermute, your funds are safe. There will be a disruption in our services today and potentially for next few days and will get back to normal after...Out of 90 assets that has been hacked only two have been for notional over $1 million (and none more than $2.5M), so there shouldn't be a major selloff of any sort. We will communicate with both affected teams asap...If you are a lender to Wintermute, again, we are solvent, but if you feel safer to recall the loan, we can absolutely do that.
MARATHON CUT TO NEUTRAL: BTIG analyst Gregory Lewis downgraded Marathon Digital (MARA) to Neutral from Buy on Friday. The analyst stated that the announcement of bankruptcy by the company's primary hosting provider Compute North creates too much uncertainty around Marathon Digital's hash capacity targets. While he expects Compute North to continue to operate through its restructuring as this is a Chapter 11 restructuring rather than Chapter 7 liquidation, at a minimum, its growth strategy will be put on hold, the analyst said. Lewis still contended however that longer term, the bankruptcy of Compute North could provide an opportunity for Marathon Digital to build a data center infrastructure footprint at distressed pricing.
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 (RIOT), 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 dropped about 5% this week to $18,715 in U.S. dollars, according to TradeBlock.
Bitcoin
+
Bitcoin
+
Bitcoin
+
Ethereum
+
Litecoin
+
Dogecoin
+
Nasdaq
-0.18 (-0.31%)
MicroStrategy
-5.45 (-2.82%)
Coinbase
-1.49 (-2.37%)
Marathon Digital
-0.81 (-7.69%)
AMD
-1.26 (-1.81%)
Nvidia
-1.49 (-1.19%)
Ideanomics
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Riot Platforms
-0.25 (-3.95%)
OSTK
+
Pareteum
+
Srax
+0.035 (+1.77%)