The Intersection: Crypto And Wall Street This Week - Saturday, May 1

Four Assorted Cryptocurrency Coins

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.


Cryptocurrency platform Gemini announced details on Tuesday of a cryptocurrency rewards credit card, including a partnership with Mastercard (MA) and WebBank. Since it was first introduced in early 2021, the Gemini Credit Card has amassed more than 140,000 people on its waitlist. Gemini has teamed up with Mastercard as the exclusive card network to offer a number of features for this upcoming offering. Cardholders will earn up to 3% back on qualifying purchases in bitcoin or any of the more than 30 cryptocurrencies available on Gemini. Crypto rewards will automatically be deposited into the cardholders’ Gemini account. Gemini is building a rewards platform to deliver crypto rewards in real-time. Gemini cardholders will receive their crypto rewards as the transaction occurs for most of their purchases.  The card will have no annual fee so cardholders can receive the full value of their rewards. Upon approval, cardholders can instantly access the Gemini Credit Card and begin making purchases online, in-app, and at the point of sale by directly adding it to their mobile wallet from the Gemini mobile app.  The Gemini Credit Card will offer real-time crypto rewards available in all 50 U.S. States and will be accepted wherever Mastercard is accepted. The Gemini Credit Card is expected to launch this summer and those who are on the waitlist will receive first access to apply.


Coinbase (COINannounced Friday it is acquiring Skew, an institutional data visualization and analytics platform for crypto markets. "Through this acquisition, Coinbase reinforces our commitment to serving the growing institutional market. We know that access to high quality data is essential for institutions assessing investments in crypto assets," the company announced in a Friday blog post. Coinbase said it will continue to serve customers of Skew's analytics product. Based in London, Skew was co-founded in 2018 by CEO Emmanel Goh and COO Tim Noat. Since then, the company has grown to serve more than 100 customers, including One River Asset Management and Susquehanna International Group, Coinbase noted. The acquisition is subject to customary closing conditions and is expected to close in Coinbase's second fiscal quarter. Terms of the deal were not disclosed.

Following the news, BTIG analyst Mark Palmer said the acquisition of Skew will "further round out" Coinbase's prime brokerage platform which includes such offerings as custody, over-the-counter trading and staking. The analyst believes Coinbase Prime, which launched in January, has been "overlooked by many investors but has significant upside as institutional adoption of crypto increases." He keeps a Buy rating on the shares with a $500 price target.


In a Thursday blog post, Coinbase product manager Eddie Lo said, "We are now offering millions of customers in the US a simple and speedy way to buy crypto on Coinbase using your debit cards and bank accounts linked to PayPal (PYPL). Buying crypto should be simple and easy. However, moving money in the traditional world of finance can be anything but. ACH and wire transfers can take time and effort, and we know you are expecting faster and more seamless ways to make crypto purchases. Now, you can instantly fund crypto purchases with PayPal in just a few taps. Funding crypto purchases through PayPal offers a familiar and trusted experience as you explore the world of crypto. Working with the payments ecosystem, PayPal has built up the knowledge and implemented the proper tools in order to assure transparency, performance and security in all services. We're now one step further in bringing everyone easy and secure access to the crypto-economy.”


On Thursday, MicroStrategy (MSTR) reported first quarter earnings per share of $1.54 on a revenue of $122.9M, which compared to analyst estimates of 54c and $111.92, respectively. CEO Michael Saylor said, “We continue to be pleased with our bitcoin strategy. We successfully raised more than $1 billion of additional capital in the quarter to expand our bitcoin holdings, which now exceed 91,000 bitcoins. We also hosted a very successful ‘Bitcoin for Corporations’ track at MicroStrategy World where we utilized our thought leadership in the cryptocurrency market to show how organizations can incorporate digital assets into their balance sheet management. We will continue to acquire and hold additional bitcoin as we seek to create additional value for shareholders.” As of April 28, MicroStrategy held approximately 91,579 bitcoins.


Back in February, Tesla (TSLA) said it had purchased $1.5B in bitcoin. On Monday, the company's CFO said the EV maker had sold 10% of that holding. Bitcoin was used while "looking for a place to store cash that wasn't immediately being used" and preserve liquidity, Tesla said. Roth Capital analyst Craig Irwin noted Tuesday that Tesla reported a headline beat quarter with pretax income of $533M that included $518M in regulatory credits, and a $101M benefit from a short-term trade in bitcoin. On a fully adjusted basis, financial results were clearly a miss, Irwin said, noting that ASPs were pressured on the absence of Model S/X deliveries, with modest price cuts in 2021. Production of the refreshed Model S has yet to start, and management is now saying May versus the initial guide for Feb, he added. The analyst has a Neutral rating and a price target of $150 on the shares.


Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) 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.


As of time of writing, bitcoin rose roughly 4% this week at $55,950 in U.S. dollars, according to TradeBlock.

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