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Riot Platforms Expands Operations with $92.5 Million Acquisition of Block Mining
Riot Platforms has acquired Kentucky-based Block Mining in a $92.5 million deal to boost its mining capacity. The acquisition adds 60 megawatts (MW) of operational capacity immediately and aims for an expansion to 110 MW by the end of 2024, potentially increasing Riot's total capacity to 2 gigawatts. The deal, paid with $18.5 million in cash and $74 million in Riot stock, will help diversify Riot's operations and advance its growth targets. Riot's stock closed down 5.31% on the day of the announcement, reflecting a 24.79% decline year-to-date.
Bitcoin-Focused App Fold to Go Public Through SPAC Merger
Bitcoin rewards app Fold plans to go public through a merger with FTAC Emerald Acquisition Corp., a Nasdaq-listed SPAC. The deal values Fold at $365 million and is expected to close in Q4 2024, pending regulatory and shareholder approvals. Fold, which offers Bitcoin cashback on purchases and various crypto-related features, has processed over $2 billion in transactions and distributed $45 million in rewards since its 2019 launch. The merger will see Fold listed on Nasdaq under a new ticker, with Fold CEO Will Reeves continuing to lead the company. The funds from the deal are intended to fuel growth and expansion.
Ferrari Expands Crypto Payment Options to Europe Following US Success
Ferrari is expanding its cryptocurrency payment system to Europe after a successful debut in the United States in 2023, in partnership with BitPay. Starting from the end of July 2024, Ferrari will extend this feature to its European dealers, with plans to further expand to other countries by the end of 2024 where cryptocurrencies are legally accepted. Ferrari’s system converts customers’ cryptocurrencies into fiat currencies immediately, ensuring secure transactions and mitigating exchange rate fluctuations.
Trading Desk Insights
Bitcoin bounced back to $66,500 after slipping below $65,500 on Tuesday, but the ongoing pressure from Mt. Gox-related sales is holding back a sustained rally. Mt. Gox's holdings decreased by another $500 million this morning, following a $3 billion move yesterday. There's widespread belief that creditors will sell their BTC as soon as they receive it, which is putting downward pressure on Bitcoin's price. The market is eagerly waiting for a bullish trigger to break out of the current trading range. Donald Trump’s upcoming speech at the Nashville Conference on July 25th could be that catalyst, especially if he announces plans to use BTC in the national reserves.
In the world of US crypto ETFs, BTC ETFs saw a net outflow of $77 million, ending a 12-day streak of inflows. Meanwhile, the new ETH ETFs had a strong debut, amassing $10.2 billion in assets across nine ETFs with over $1 billion in trading volumes. Net flows hit +$107 million, despite a massive -$484 million outflow from ETHE. In comparison, Bitcoin ETFs saw $4.5 billion in trading volume on their first day and $600 million in net flow.
The ETH/BTC pair is testing a bullish trend line drawn from the 2016 lows, hinting at a potential rebound. Since January, this trendline has consistently acted as a support, much like it did in 2019-20, which eventually led to a bull market in early 2021.
On another note, Ferrari started accepting crypto payments in the US last October, accepting BTC, ETH, and USDC. The iconic car maker is now expanding this program to Europe to better meet its clients' evolving needs, according to Reuters. Ferrari plans to roll out this service to other markets by the end of 2024.
Equity futures, particularly the Nasdaq, dipped on Wednesday as investors were disappointed by quarterly reports from tech giants Alphabet and Tesla. These reports provide the first glimpse into how megacap companies performed in the second quarter. Given that these companies have driven most of this year’s gains, their reports are critical for Wall Street. Investors have mostly priced in the likelihood of the Federal Reserve cutting interest rates at its September meeting. Coupled with growing confidence in a soft landing, the market rally continues, with rate-sensitive sectors like small caps and industrials showing strength in recent weeks.
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Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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