Bitcoin mining company PrimeBlock to go public via $1.25B SPAC merger

April 1, 2022 Coin Telegraph

Bitcoin mining company PrimeBlock to go public via .25B SPAC merger

The company forecasts it will generate up to $98 million in annual revenue.

On Friday, Bitcoin (BTC) mining company PrimeBlock announced that it is merging with special purpose acquisition vehicle (SPAC) company 10X Capital Venture Acquisition Corp II. The deal places PrimeBlock at an enterprise value of $1.323 billion and is expected to close in the second half of the year.

The company has installed 1.8 exahash per second of BTC self-mining equipment, accounting for approximately 0.89% of the Bitcoin network's overall hash rate. According to PrimeBlock, its break-even price for mining is $9,000 per coin. Back in 2020, up to 59% of its energy sources were carbon-free. The firm seeks to become carbon-neutral on a net-zero basis by the year 2050.

Last year, PrimeBlock brought in $21.8 million in revenue through mining 356.8 BTC. But in 2022, the firm expects to generate $220.1 million in revenue, or a forecasted 3,629 BTC, partly via rapidly expanding its mining capacities to over 10 exahash per second. It also has a small Ethereum (ETH) mining operation, extracting 699 of such digital assets in 2021.

Regarding the business agreement, Hans Thomas, chairman and CEO of 10X Capital, commented:

"Gaurav and the leadership team [...] have successfully deployed over 110 megawatts of data center capacity and generated more than $24 million of revenue in the fourth quarter. They have built strong relationships with key partners [...] with a commitment to net-zero carbon emissions by 2050."

Bitcoin beats owning COIN stock by 20% since Coinbase IPO

March 19, 2022 Coin Telegraph

Bitcoin Price

Investing directly in Bitcoin turned out to be a better bet than owning Coinbase stock since its IPO.

Buying a Coinbase stock (COIN) to gain indirect exposure in the Bitcoin (BTC) market has been a bad strategy so far compared to simply holding BTC.

Notably, COIN is down by nearly 50% to almost $186, if measured from the opening rate on its IPO on April 14, 2021. In comparison, Bitcoin outperformed the Coinbase stock by logging fewer losses in the same period — a little over 30% as it dropped from nearly $65,000 to around $41,700

*BTC/USD (orange) vs. COIN price (blue). Source: TradingView*

What's bothering Coinbase?

The correlation between Coinbase and Bitcoin has been largely positive to date, however, suggesting that many investors consider them as assets with similar value propositions. That is primarily due to the buzz around how COIN could become a simpler onboarding experience for investors into the crypto sector compared to buying Bitcoin, Ether (ETH), and other digital assets.

*COIN's correlation with BTC on daily basis. Source: TradingView*

But the COIN product is facing increasing competition with the arrival of crypto-based exchange-traded products (ETP), mining stocks, and similar crypto-enabled firms listed across Wall Street indexes. This may have reduced its demand as the go-to asset for gaining crypto exposure.

Additionally, COIN faces downside risks due to its depressive forecasts for FY22. Coinbase stated in its latest earnings report that the crypto volatility could turn 2022 into an unprofitable year, noting their adjusted EBITDA losses could come to be around $500 million if its monthly transaction users come at the lower end of its guidance range.

*Coinbase's adjusted EBITDA margins. Source: JR Research*

Jere Ong, the principal analyst and founder of JR Research, noted that 96% of Coinbase's total revenue in Q4/2021 came from the fees charged on retail transactions, which highlights its business model's "inherent weakness." Excerpts from his report:

"We believe it offers a short-term buying opportunity for speculative investors. But, we do not encourage investors to hold COIN stock for the long term unless you have a very high conviction of its execution.

Bitcoin's risks are entirely different

Bitcoin is a different beast when compared to the shares of centralized company like Coinbase.

Absolute scarcity, censorship-resilient decentralized ledger, and gold-like properties as a potential hedge against-inflation in the digital age are just some of the concepts driving up BTC price today.

With 7.5% inflation and real inflation numbers at 19.5% (shadowstats) the fed is doing a great job! Just 100x more, and they will be at Paul Volcker's level of 30% interest rates!!! Got #Bitcoin? pic.twitter.com/qesZ2iU0Mv
— Davinci Jeremie (@Davincij15) March 17, 2022

As a result, analysts and strategists predict Bitcoin to reach anywhere from zero to "millions" per 1 BTC, depending on who you ask.

Elsewhere, most of the crypto-exposure stocks have also suffered more compared to Bitcoin. Namely, Nasdaq-listed mining firms Canaan, whose stock value fell by nearly 80% year-over-year, and Riot Blockchain, which dropped 67.55% in the same period.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Coinbase Shares Declined 50% From All-Time High, Stock Follows Bitcoin’s Ups and Downs

February 3, 2022 Bitcoin.com

Elon Musk offloads $1.1B in Tesla stock

November 11, 2021 Coin Telegraph

Bitcoin

The eccentric billionaire polled his Twitter followers but already had the sale planned due to tax obligations.

Tesla CEO Elon Musk has offloaded more than one billion dollars worth of shares according to recent financial filings.

Filings submitted on Nov. 11 to the Securities and Exchange Commission confirm the sale of more than 934,000 Tesla shares worth around $1.1 billion.

Musk sold the shares at an average price of around $1,170, locking in almost 180% in gains in prices over the past year. It is just the third time Musk has sold company stock since Tesla went public on the Nasdaq in 2010, and it is his largest transaction.

The filings show that Musk planned to sell the stock as part of his tax obligations back in September. He polled his 63 million followers at the weekend, asking whether he should sell 10% of his Tesla holdings. Of the 3.5 million respondents, almost 58% said yes. However the Tesla CEO has sold less than 1% in this sale and still holds more than 170 million shares.

Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.

Do you support this?
— Elon Musk (@elonmusk) November 6, 2021

In response to the poll, he noted “I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”

In the days following the poll, Tesla stock slumped 16% to dip below $1,000 briefly on Nov. 10. TSLA had hit an all-time high of $1,230 on Nov. 4 and it is currently around 11% down from that peak.

There has been speculation — hopium really — in crypto circles that he may put some of that cash into digital assets. Mr. Whale asked his 357,000 followers: “Which cryptocurrency should he buy to make himself the first-ever trillionaire?”

MicroStrategy CEO Michael Saylor suggested he buy more Bitcoin following the Twitter poll but before the news emerged about this sale:

“If the goal is diversification, an alternate strategy to consider is converting the $TSLA balance sheet to a Bitcoin Standard and purchasing $25 billion in $BTC. That would deliver diversification, inflation protection & more upside for all investors in a tax efficient manner.”

According to BitcoinTreasuries, Tesla currently holds 43,200 BTC worth an estimated $2.79 billion at current prices.

Citi’s bullish Coinbase target: ‘Buy crypto’s general store’

October 27, 2021 Coin Telegraph

Citi

Multinational investment bank thinks Coinbase stock is worth 30% more than its current price.

Financial services multinational Citi initiated coverage of U.S. crypto exchange Coinbase’s stock this week with a very bullish price target.

Citi analyst Peter Christiansen told investors that they could “buy crypto’s general store,” in a research note published on Tuesday, Oct. 26. Citi has given COIN a bullish price target of $415 which is substantially higher than Monday’s closing price of $319.

The analyst stated that the stock offers investors “direct exposure to increased retail and institutional adoption of cryptocurrencies.”

The multinational banking giant sees the potential in Coinbase as the company makes continued efforts to expand its operations beyond just a crypto exchange and into other areas such as NFTs and cold wallet storage.

The company accrued more than a million applications for its NFT platform waiting list within a day or so of its announcement on Oct. 13. Christiansen recommended the company, “for its position within the crypto value chain, a ‘networking-based’ business model and strategy, the undeniably very large opportunity set … yes, we believe COIN is investable.”

He also considers Coinbase’s “lean forward approach to regulatory compliance” a competitive advantage.

“To a degree, we think rising regulations could be a positive for Coinbase’s competitive positioning, particularly versus business models that predominantly rely on markets being unregulated.”

Christiansen added that the stock is in place to make “higher highs and higher lows” as crypto asset adoption increases. U.S. investment bank Piper Sandler also raised their target price for the stock to $360.

Not every analyst is on board with JPMorgan's Kenneth Worthington raising his price target on COIN only slightly to $375 from $372. However Lisa Ellis, senior Equity Analyst at MoffettNathanson said COIN was a "must-own stock" that could go to $600 in light of its recent partnership with Facebook on its Novi crypto wallet.

Coinbase went public in April with an opening IPO price of $381, it surged to a peak of $430 on the day before retreating. COIN hit a monthly high of $326 on Monday this week but has fallen 4.3% since to an after-hours trading price of $312 according to MarketWatch.

Shortly after it was listed, reports emerged that Coinbase insiders and executives had begun dumping the stock. The company made around $1.6 billion in profit in Q2, a large portion of that coming from its higher than industry average transaction fees. The Q3 report comes out on November 9.

In August, CNBC ‘Mad Money’ host Jim Cramer recommended Coinbase stock suggesting investors allocate 5% of their portfolios to crypto assets.

Bitcoin slides with S&P 500 as Fed signals tapering $120B monthly bond purchases

August 19, 2021 Coin Telegraph

Bitcoin

The benchmark cryptocurrency retreated alongside risk-on markets as investors shifted their exposure to the U.S. dollar.

Bitcoin (BTC) prices briefly fell below $44,000 on Thursday as the United States Dollar strengthened after the U.S. Federal Reserve policy minutes revealed its intentions to limit its bond-purchasing program this year.

Bitcoin risks $45,000 becoming new resistance

The spot BTC/USD rate dropped 1.71% to a new week-to-date low of $43,955. The pair’s plunge appeared as a part of a technical correction that started after it had reached a three-month high of $48,176 on Saturday, following a 64.42% price rally.

*Bitcoin daily price chart. Source: TradingView*

Bitcoin’s latest price decline also surfaced in line with a similar market bias on Wall Street. For instance, the benchmark S&P 500 index lost 47.81 points, or 1.1%, dropping to 4,400.27 during Wednesday’s final hours of trading.

Similarly, the Dow Jones and the Nasdaq Composite also plunged 1.1% and 0.9%, respectively. In addition, CNBC’s pre-market data revealed that futures tied to Wall Street indexes dropped on Thursday, hinting that the markets will likely continue their declines after the New York opening bell later on Thursday.

Over the past month, #Bitcoin and the #SP500 have been correlating quite strongly, and that includes the mild decline over the past couple of days. Meanwhile, the inverse correlation between $BTC and #gold's price has calmed down significantly. https://t.co/dvQUHVrYEH pic.twitter.com/lpwJBvkpbx
— Santiment (@santimentfeed) August 19, 2021

On the other hand, the U.S. dollar index (DXY) benefited from declining risky markets. The index, which measures the greenback’s strength against a basket of top foreign currencies, surged 0.39% to a six-month high of 93.50 before correcting lower by modest margins.

*U.S. dollar index daily chart highlighting an inverse head and shoulder setup. Source: TradingView*

Tapering alert

The U.S. Federal Reserve’s July 27–28 meeting, released Wednesday, showed an emerging consensus to unwind its $120-billion monthly purchases of Treasury and mortgage-backed securities.

Most central bank officials agreed that the U.S. economic recovery is on the right path, which is an appropriate reason to reduce the pace of asset purchases. But they did not reveal when they should begin the tapering, with only three remaining Federal Open Market Committee meetings left to attend this year.

Officials also agreed that scaling back asset purchases would position them to raise interest rates should the economic recovery persist as anticipated. But they said that they want to see stronger evidence that the labor market has recovered from the aftermaths of the COVID-19 pandemic, the minutes revealed.

On inflation, the minutes showed Fed officials anticipating a temporary burst. They highlighted that their preferred gauge of inflation, after excluding volatile food and energy categories, was at 3.5% in June — a 30-year high — but anticipated declines by calling the upswing in consumer prices transitory.

Bullish exhaustion ahead?

In detail, excessive bond-buying ended up sending U.S. debt yields to a low of 0.66% in 2020. Even the bounce back recorded at the beginning of 2021 kept the yields near their record lows. The trend was the same across the globe, wherein the amount of debt offering negative yields recently stood at $16.5 trillion, a six-month peak.

*Long-term government bond yields are declining across developed economies. Source: FRED*

The lower rate of returns has sparked a series of rotations in the equity market, with indexes logging record highs. The S&P 500 rallied 19.01% year-to-date to hit a lifetime peak of 4,480.26 points, while the Dow Jones jumped 16.30% year-to-date to reach an all-time high of 35,369.87 points.

Bitcoin, which emerged as a safe-haven alternative to the U.S. dollar and gold in 2020, also rose alongside the Wall Street index. In 2021, it has penned a record high near $65,000, with analysts crediting the Fed’s loose monetary policies as one of the leading catalysts behind its price rally.

The biggest helpers for cryptocurrency adoption are central banks. #Bitcoin rises almost in tandem w/the combined balance sheet of the Big3. Combined balance sheet of Fed, BoJ and ECB has risen to almost $25tn. pic.twitter.com/TB8FqeSIqd
— Holger Zschaepitz (@Schuldensuehner) August 13, 2021

But the biggest question remains of whether or not tapering will rotate capital out of the markets, which boomed during the period of quantitative easing, especially now Bitcoin that is sitting atop over 1,000% in profits following the Fed’s loose policy introduction in March 2020.

Jon Ovadia, founder of South Africa-based crypto exchange Ovex, noted that a declining cash flow from the Fed’s coffers would likely halt the growth of Bitcoin and similar risky assets in the near term.

“The factors that support the growth of Bitcoin, in particular, goes beyond just the Fed’s interference in keeping the economy healthy,” he explained, adding:

“However, on the macroeconomic front, Bitcoin investors will have to factor in the prospective impact and hang on to other fundamentals that abound in the crypto market to keep prices at record levels.”

Bitcoin will have refreshed record highs by Q1/2022

James Wo, founder and CEO of Digital Finance Group, called the latest price declines in Bitcoin and the equity market “reactionary” in nature. But he stressed that risk-on assets would continue their upward momentum in the long term due to inflationary pressures.

“Nominal inflation will take time to get back to levels seen before the pandemic,” he said.

“I continue to believe that we are still on track to reach all-time highs by Q4 2021–Q1 2022.”

Intel Discloses Holding Coinbase Stake in Filing With SEC

August 14, 2021 Bitcoin.com

Binance stops stock token sales, ‘effective immediately’

July 16, 2021 Coin Telegraph

Binance

The crypto exchange gave no indication as to the reason, stating only that it would be shifting its “commercial focus to other product offerings.”

Binance’s highly popular stock tokens, a relatively recent offering, are being wound down immediately. In an announcement published on Friday, the exchange announced that “effective immediately,” stock tokens are unavailable for purchase on Binance.com. As of October 14, 2021, at 7:55 pm UTC, the exchange will no longer support stock tokens at all.

Existing stock token holders will have some time to adjust:

“Users who currently hold stock tokens may sell or hold them over the next 90 days. Users will no longer be able to manually sell or close their positions after 2021-10-14 19:55 (UTC). Thereafter all stock token positions on Binance.com will be closed at 2021-10-15 13:30 (UTC).”

While unconfirmed as of the time of writing, Walter Bloomberg has claimed in a tweet that:

HONG KONG'S SFC SAYS NO ENTITY IN THE BINANCE GROUP IS LICENSED OR REGISTERED TO CONDUCT "REGULATED ACTIVITY" IN HONG KONG
— *Walter Bloomberg (@DeItaone) July 16, 2021

If true, the development would confirm that mounting regulatory pressure on the world’s largest cryptocurrency platform is continuing to hit its operations hard.

In late April, there had already been reports that European and British regulators were scrutinizing Binance’s offering of stock tokens — which represent fractions of equity shares in firms such as Tesla and Coinbase — for possible non-compliance with securities laws. While initially not commenting on Binance in particular, Germany’s Federal Financial Supervisory Authority (BaFin) went on record at the time, stating that:

“Fundamentally [...] the following applies: if tokens are transferable, can be traded at a crypto exchange and are equipped with economic entitlements like dividends or cash settlements, they represent securities and are subject to the obligation to publish a prospectus.”

BaFin soon mentioned Binance explicitly, noting its absence of published prospectuses for the stock tokens.

Spring and summer of 2021 have been difficult for Binance on the regulatory front, with multiple countries taking action against it or reportedly investigating its operations from various compliance perspectives.

In the United Kingdom, the Financial Conduct Authority ordered the exchange to halt all “regulated activity” in the country in June. That same month, Japan’s Financial Services Agency accused Binance of operating in the country without proper registration, and new measures against crypto exchanges in the Canadian province of Ontario prompted the exchange to cease all its operations there.

Nasdaq to launch options trading for Coinbase Global

April 20, 2021 Coin Telegraph

COIN

Equity options for COIN stock are coming to Nasdaq today.

Less than one week after the largest crypto exchange in the U.S. was listed, Nasdaq is set to start trading options for Coinbase Global.

According to an April 19 Reuters report, a representative for Coinbase stated that the COIN.O options will start trading on Nasdaq on Tuesday, April 20.

The launch of equity options will offer a new way for investors to bet on the fortunes of Coinbase. Equity options represent the right, but not the obligation, to buy or sell a stock at a certain price, known as the strike price, on or before an expiration date.

The news follows Coinbase’s direct listing, which saw the firm's stock fluctuate between a valuation of $429.54 and $310 on its first day of trading.

Reuters estimates that Coinbase Chief Executive Brian Armstrong sold around $292 million in shares on COIN's first day of trading. According to filings made with the U.S. Securities and Exchange Commission, Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per share for total proceeds of $291.8 million, however, this works out at less than 2% of his total holdings.

Cointelegraph reported that insiders dumped nearly $5 billion in COIN stock shortly after it was listed. Filings on the Coinbase Investor Relations website showed a total of 12,965,079 shares were sold by insiders, worth over $4.6 billion at COIN’s $344 share price at close on Friday.

Yahoo Finance reported the stock has slumped 22.5% from a high of $429.54 on April 14 to a current after-hours trading price of $332.75 where it appears to have settled after Monday’s trading session.

On April 20, Coinbase Pro has announced that will add support for new trading pairs for Basic Attention Token (BAT), Cardano (ADA), Decentraland (MANA), and USDC from April 20. The four assets will be paired with three fiat currencies (USD, EUR, GBP), BTC, and ETH, with limited trading functionality to be made available while market liquidity is assessed at launch.

Coinbase insiders dump nearly $5 billion in COIN stock shortly after listing

April 17, 2021 Coin Telegraph

Coinbase insiders dump nearly billion in COIN stock shortly after listing

Brian Armstrong

After an edict to remain "mission focused," Coinbase executives have succeeded in making themselves a fortune.

Insider activity reports for Coinbase’s COIN stock indicate that multiple early investors and executives dumped billions in equity shortly after COIN’s direct listing, with at least one C-suite director cashing out their stake in the cryptocurrency exchange entirely.

Data from Capital Market Laboratories and confirmed by filings on Coinbase’s Investor Relations website shows a total of 12,965,079 shares sold by insiders, worth over $4.6 billion at COIN’s $344.38 per share Friday close.

Notable transactions include Coinbase CFO Alesia Haas selling all of her 255,500 shares at a price of $388.73, while CEO Brian Armstrong sold 749,999 shares in three transactions at various prices, netting a total of $291,827,966. He retains 300,001 shares worth over $1 billion.

Capital Market Laboratories' data did not indicate that any directors or insiders purchased additional shares, only sold.

The sales prompted jeering and amusement on social media, with many observers likening the sales to a classic “pump and dump” in which insiders and team members dump tokens into retail liquidity shortly after a listing.

lolol wtf pic.twitter.com/ezZx5F8ua9
— Dereck Coatney (@DereckCoatney) April 17, 2021

While early investors and executives looked to cash in, there are at least a handful of major buyers. Hedge fund manager Cathie Wood is placing a big bet on the exchange, having purchased over $350 million in shares for three different Ark ETFs.

Likewise, many Coinbase employees now have stake in the company, as 1,700 Coinbase staff were gifted 100 shares each as a “thank you” from the company.

Earlier this year, Coinbase was embroiled in a string of negative headlines relating to CEO Brian Armstrong's handling of a new policy that restricted focus on political and social issues at work. Armstrong insisted that the company remain "mission focused," and the company's mission includes a goal of becoming “the leading global brand for helping people convert digital currency into and out of their local currency.”

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