The Intersection: Crypto And Wall Street This Week - Saturday, May 15

Blockchain, Technology, Smart, Bitcoin, Money

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.

TESLA SUSPENDS BITCOIN PAYMENTS

Tesla (TSLA) CEO Elon Musk posted the following statement to Twitter on Wednesday: "Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainably energy. We are also looking at other cryptocurrencies that use less than1% of Bitcoin's energy/transaction."

Following the news, Wedbush analyst Daniel Ives said Musk made a major U-turn on crypto in a head scratching move. Musk is now concerned about the use of fossil fuels in Bitcoin mining and transactions, yet the nature of Bitcoin mining has not changed in the last three months, which speaks to why backtracking on the crypto transaction three months later is a "very surprising and confusing move" to both Tesla and crypto investors, Ives said. The analyst believes that for Tesla and the stock, not accepting Bitcoin does not change the thesis or growth trajectory for the EV story. However, it does add to the noise and volatility around the name at a time in which risk assets are under enormous selling pressure on the Street with Tesla leading the charge, he added. Ives has an Outperform rating and a price target of $1,000 on the shares.

Musk said via Twitter on Thursday, "To be clear, I strongly believe in crypto, but it can't drive a massive increase in fossil fuel use, especially coal."

COINBASE REPORTS Q1 EARNINGS

On Thursday, Coinbase (COIN) reported first quarter earnings per share of $3.05 on a revenue of $1.8B, which compared to analyst estimates of $3.09 and $1.81B respectively. The company also reported verified users of 56M and Q1 monthly transacting users of 6.1M. Coinbase also announced assets on platform of $223B, representing 11.3% crypto asset market share. Reports Q1 trading volume of $335B. The company said, "Our strong Q1 2021 results reflect the strength of the crypto price cycle we entered in Q4 2020. We saw many crypto assets reach all time high prices, high levels of volatility, and increased interest across the entire crypto economy. Crypto market capitalization reached nearly $2 trillion at the end of Q1 2021 compared to $782 billion at the end of Q4 2020. By the end of Q1, the price of Bitcoin had nearly doubled to approximately $59,000 compared to the end of 2020, and the price of Ethereum more than doubled during this same period to approximately $1,900. This market environment drove strong engagement with the Coinbase platform, reflected in retail, institutional and ecosystem partner growth across all key metrics including our Verified Users, retail Monthly Transacting Users, Trading Volume, and Assets on Platform."

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