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Here’s what you missed in crypto this week
As bitcoin, ethereum and other cryptocurrencies attract more and more attention from investors, Wall Street and its traditional banks continue to adapt to the change. Catch up on this week’s top stories highlighting the intersection between these areas of old-guard and new-school finance with this roundup compiled by The Fly.
ROBINHOOD WILL ACQUIRE BITSTAMP FOR CRYPTO EXCHANGE: Robinhood Markets (HOOD) announced Thursday that it has entered into an agreement to acquire Bitstamp, which was founded in 2011 and has offices in Luxembourg, the United Kingdom, Slovenia, Singapore and the United States. The company said: “The acquisition of a global exchange will significantly accelerate Robinhood Crypto’s expansion around the world. Bitstamp holds over 50 active licenses and registrations globally and will bring customers across the EU to Robinhood, in the UK, US and Asia. This acquisition will introduce Robinhood’s first institutional business. Its institutional clients rely on Bitstamp for reliable trade execution, deep order books and industry-leading API connectivity. With Bitstamp’s other institutional offerings such as the Bitstamp-as-a-service white label solution, institutional lending and staking, Robinhood will enter the space with active and established relationships, industry-leading infrastructure and products, with over 85 tradable assets and products such as staking and lending, will enhance Robinhood’s Crypto offering… The Bitstamp team will join forces with Robinhood, promoting collaboration, innovation and knowledge sharing across continents. Robinhood and Bitstamp customers can expect the same level of service, security and reliability, and as we move forward, we are committed to maintaining transparency throughout this process.” Robinhood expects the final consideration in the deal to be approximately $200 million in cash, subject to customary purchase price adjustments. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. (To know more)
KERRISDALE PROBLEMS REVOLT SHORT RELATIONSHIP: Kerrisdale Capital announced a short position in Riot Platforms on Wednesday (REVOLT), stating that the company “does a much better job playing energy arbitrage games and issuing stock than generating shareholder value by mining cryptocurrencies.” The firm said that “with numerous low-cost bitcoin ETFs and ETPs, why own shares of a company like Riot, which has seen bitcoin holdings per share and bitcoin production per share decline steadily, instead of simply owning bitcoin same.” According to Kerrisdale, the company “represents a fundamentally poor way for investors to express a view on bitcoin and over the long term the shares are more likely to be diluted into dust than to outpace the gains of new digital gold.” (To know more)
Riot announced Wednesday that it has acquired ownership of 1,460,278 shares of Bitfarms common stock (BITF) which represent approximately 0.37% of the ordinary shares issued and outstanding. The shares were purchased through normal purchases on the Nasdaq Stock Market and other open market transactions for a weighted average price of approximately $2.45 per share for an aggregate amount of $3,580,455.63. Immediately prior to the share acquisition, Riot owned 46,370,162 shares of common stock, representing approximately 11.63% of its issued and outstanding common shares. Following the completion of the Acquisition, Riot owned 47,830,440 shares of common stock, representing approximately 12.00% of the issued and outstanding common shares. Riot currently intends to call for a special meeting of the company’s shareholders, at which Riot intends to appoint several independent directors to the company’s board of directors. (To know more)
On Tuesday, JPMorgan lowered the firm’s price target on Riot to $12 from $15.50 and maintained an Overweight rating on the stock. The company updated its bitcoin mining models and price targets to reflect first-quarter results, increased hashrate targets for 2024 and modest changes in bitcoin spot prices. The analyst has a less constructive view on a post-halving bitcoin rally, which will lead to a reduction in December 2024 price targets and estimates. JPMorgan had previously forecast a gradual 30% rise in bitcoin in the months following the halving. However, he now sees a gradual 15% increase in bitcoin’s price in the third quarter, as he believes some of the rally may have been brought forward in this cycle. (To know more)
JPMorgan also lowered the company’s price target on Marathon Digital (MARA) to $14 from $16.50 and maintained an Underweight rating on the stock (To know more) and on CleanSpark (CLSK) to $12.50 from $15 and maintained a Neutral rating on the shares. (To know more) Meanwhile, the firm increased its price target on Iris Energy (IREN) to $11 from $10 and maintained an Overweight rating on the stock. (To know more)
Also Tuesday, HC Wainwright took coverage of Bitfarm with a Buy rating and $4 price target. Bitfarms is a global, vertically integrated pure-play bitcoin mining company with operations spanning 12 mining facilities in four countries, including Canada, the United States, Paraguay and Argentina, the analyst said. The company is optimistic about the price of bitcoin in the medium to long term, as it expects the price to cross the six-figure mark in this cycle. He believes Bitfarms shares provide investors with superior exposure to bitcoin “in this next phase of the bull cycle.” (To know more)
BITDEER ACQUIRES DESIWEMINER: Bitdeer Technologies Group (BTDR) announced on Thursday that it has entered into a stock purchase agreement with FreeChain, known as Desiweminer, a fabled cryptocurrency ASIC design company, to acquire all of its issued and outstanding shares for a consideration of 20 million Class A common shares. A portion of the Bitdeer shares to be issued under the agreement will vest in equal installments over a period of five or seven years, subject to the terms and conditions set forth therein. Additionally, 50% of the Bitdeer shares issued to certain sellers under the agreement cannot be transferred for a period of six months after closing, and the remaining 50% of the Bitdeer shares issued to such sellers cannot be transferred for a period twelve months. following the closure. The strategic acquisition, subject to customary closing conditions, follows a ten-month due diligence period, during which Bitdeer carefully evaluated Desiweminer’s technology, engineering team and supply chain. The company said: “Desiweminer’s cutting-edge chip designs are highly complementary to those developed by Bitdeer and are ideal for advanced semiconductor processes at 4nm and below. With this acquisition, the Desiweminer team will join Bitdeer’s ASIC design team in Singapore, further strengthening the company’s capabilities and accelerating its time to market. Products with integrated technologies are expected to be released imminently.” (To know more)
CORE SCIENTIFIC REJECTS THE COREWEAVE PROPOSAL: Core Scientific Thursday (CORZ) confirmed that it received an unsolicited, non-binding proposal on June 3 from CoreWeave to acquire all of the company’s outstanding shares on a fully diluted basis for $5.75 per share in cash. This unsolicited proposal immediately followed Core Scientific and CoreWeave entering into a series of 12-year contracts for Core Scientific to provide approximately 200 MW of infrastructure to host CoreWeave’s high-performance computing services. The company’s board of directors, in consultation with its independent financial and legal advisors, has carefully reviewed the proposal. The company said: “The board evaluated the company’s growth prospects and short- and long-term value creation potential, including in relation to both the previously announced CoreWeave agreements and the proposal. The board determined that the CoreWeave proposal significantly undervalues the company and is not in the best interests of the company and its shareholders. Core Scientific continues to focus on capitalizing on its valuable high-powered digital infrastructure portfolio to expand its HPC hosting business, including through the execution of recently announced contractual projects with CoreWeave. With over 300 MW of additional HPC capacity available, the company is pursuing potential future transactions with CoreWeave or other HPC customers, while maintaining its strong bitcoin mining franchise. (To know more)
Also on Thursday, BTIG raised the company’s price target on Core Scientific to $10 from $8 and maintained a buy rating on the stock. The AI-driven “data center gold rush” that has accelerated and highlighted the growing need for data centers is “in its infancy,” the analyst said. The company said the access or lack of power “hit the market in the face.” (To know more)
COINBASE DEBUT WITH SMART WALLETS: In a blog post on Wednesday, Coinbase (CURRENCY) said: “At Coinbase, we have always envisioned a world where everyone can seamlessly participate on-chain. Today we launch the next evolution of self-custodial wallets. Smart wallets represent a revolutionary step forward in our mission to bring more than 1 billion users onchain. These next-generation wallets address the biggest pain points in today’s crypto experience: complex onboarding, network fees, and recovery phrases, making the transition to onchain smoother than ever. Smart wallets offer a streamlined, gas-free onchain experience. This simplicity, combined with multi-chain support and integration with major applications, will make blockchain onboarding as easy as logging into your favorite website.” On purpose;MARA;MSTR;SQ;RIOT-Coinbase-debuts-Smart-Wallets-to-expedite-crypto-onboarding&utm_source=https://thefly.com/news.php%3Fsymbol=RIOT&utm_medium=referral&utm_campaign=referral_traffic” target=”_blank”>(read about more )
Additionally, Needham maintained a buy rating and $260 price target on Coinbase on Wednesday. The company’s May volume was the lowest since December 2023 as the month was volatile for cryptocurrency prices and the lack of sustained movement led to a cooling of retail on the platform, the analyst said. The firm added, however, that it remains bullish on the stock given the improved regulatory outlook, possible upcoming Ether ETFs, and increased meme coin activity with the return of “Roaring Kitty” to the forums. (To know more)
CRYPTO STOCK GAMES: Publicly traded companies in the sector include Bit Digital (BTBT)Coinbase, Core Scientific, Greenidge Generation (GRE)Digital Marathon, MicroStrategy (MSTR)Riot Control Platforms, Fortress Digital Mining (SDIG) and TeraWulf (WULF).
PRICE ACTION: As of this writing, bitcoin is up about 6% this week to $71,285 in US dollars, according to CoinDesk.