Crypto Currents: Cathy Wood's ARK Files To Form Bitcoin ETF

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 compiled by The Fly.

ARK INVESTMENT TO LAUNCH BITCOIN ETF

Cathie Wood's ARK Investment announced in a Monday regulatory filing the ARK 21Shares Bitcoin ETF, an exchange-traded fund that issues common shares of beneficial interest that trade on the Cboe BZX Exchange, Inc. The Trust's investment objective is to seek to track the performance of bitcoin, as measured by the performance of the S&P Bitcoin Index, adjusted for the Trust's expenses and other liabilities. S&P Dow Jones Indices LLC is the publisher and index administrator for the Index.

The Index is designed to reflect the performance of bitcoin in U.S. dollars. In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the Index. 21Shares US LLC is the sponsor of the Trust, Delaware Trust Company is the trustee of the Trust, and Coinbase Custody Trust Company, LLC is the custodian for the Trust, and will hold all of the Trust's bitcoin on the Trust's behalf. ARK Investment Management LLC provides assistance in the marketing of the Shares, according to the filing.

HIVE BLOCKCHAIN BEGINS NASDAQ TRADING HIVE Blockchain (HVBTannounced Tuesday it would begin trading the company’s common shares on the Nasdaq’s Capital Markets Exchange on Thursday, July 1. The company announced on Thursday that it had joined the NVIDIA (NVDA) Partner Network Cloud Service Provider program and entered into purchase agreements for NVIDIA GPU's with a total contract value of more than $66. These cards will be delivered over the remaining months of calendar 2021 with deliveries arriving each month, the company said.

Additionally on Friday, HIVE announced its long-term high performance computing strategy beyond Ethereum 2.0. The company said, “HIVE’s current ethereum production is over 3,000 Gigahash per second and has the potential to almost double after card upgrades of over 5,500 GH/s by the end of December 2021, and our current bitcoin production is 544 Petahash per second, which we expect to double by early September 2021 to 1.0 Exahash per second and double again by Christmas 2021 to 2.3 EH/s.  Based on current ETH and BTC prices and difficulty in mining our revenue could be $30M per month when we have all our machines installed and mining.”

COINBASE RECEIVES CUSTODY LICENSE FROM BAFIN

BaFin, the Federal Financial Supervisory Authority, has granted permission on June 28 to Coinbase (COIN) Germany GmbH to conduct a crypto custody business, according to a translation of a German-language notice posted by the financial regulatory authority for Germany. "Coinbase Germany GmbH is therefore the owner of the first license issued by BaFin for the crypto custody business that was newly introduced as a financial service.

Since this is a novel business model, shortly after the law implementing the amendment to the fourth EU Money Laundering Directive came into force, BaFin put together an interdisciplinary, cross-divisional and cross-departmental team to deal with the complex issues relating to crypto custody business," the translated notice states. 

Following the news, Mizuho analyst Dan Dolev said he expects Coinbase to post a 15%-20% revenue beat versus consensus estimates following "outsized" trading volumes in April and May. However, the Q2 beat may be coupled with a "killjoy" as Q3 consensus estimates may require downward revisions, Dolev said. June's "subdued" cryptocurrency volatility bodes poorly for Coinbase in Q3, said the analyst, who kept a Neutral rating on the shares with a $225 price target.

UK REGULATOR CRACKS DOWN ON BINANCE

In a Saturday consumer warning, the UK's Financial Conduct Authority said, "Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group. Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK. The Binance Group appear to be offering UK customers a range of products and services via a website, Binance.com."

ANALYST RAISES RIOT, MARATHON PRICE TARGETS

B. Riley analyst Lucas Pipes raised the firm's price target on Riot Blockchain (RIOTon Thursday to $51 from $44 and kept a Buy rating on the shares. He also raised the firm’s price target on Marathon Digital (MARA) to $54 from $47 and reiterated a Buy rating on the shares. The declines in network hash rate since the start of June following the reported crackdown on crypto mining in China is bullish for North American miners, Pipes said. The sudden decrease in miner competition has created an "enhanced profitability window" for the companies, which could drive outperformance versus Street expectations over the next couple of quarters, said the analyst. Pipes believes that the events in China are particularly positive for miners that are long power and data center space.

CRYPTO STOCK PLAYS

Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia 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 rose roughly 4% this week to $33,456 in U.S. dollars, according to TradeBlock.

Disclaimer: TheFly's news is intended for informational purposes only and does not claim to be actionable for investment decisions. Read more at  more

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