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Riot Platforms Buys 9.25% Stake in Bitfarms After Rejected Takeover Offer
Bitcoin mining firm Bitfarms rejected a $950 million acquisition proposal from Riot Platforms, which aimed to buy all outstanding shares at a 24% premium. Despite the rejection, Riot acquired a 9.25% stake in Bitfarms, becoming its largest shareholder. Riot plans to call a special meeting to add new independent directors to Bitfarms' board. The rejected proposal followed the recent firing of Bitfarms' CEO Geoffrey Morphy, who has filed a lawsuit against the company. Bitfarms' stock rose 10% following the news, while Riot's stock increased by 3.8%.
BlackRock Bitcoin ETF Surpasses GBTC in Under 100 Trading Days
BTC holdings in less than 100 trading days. As of Tuesday, IBIT held 288,671 BTC, surpassing GBTC's 287,454 BTC following significant inflows to IBIT and outflows from GBTC. This shift is part of a larger trend, with Bitcoin funds globally now holding a combined 1 million BTC. The competition has been fueled by IBIT's lower fees compared to GBTC's, which charges 1.5%. Grayscale had anticipated some outflows due to forced liquidations and has recently announced the upcoming departure of its CEO, Michael Sonnenshein.
Israel Launches Digital Shekel CBDC Experiment for Payments
The Bank of Israel has initiated a CBDC experiment inspired by the BIS Innovation Hub's Project Rosalind, aiming to accelerate the development of a digital shekel. The experiment, called the "Digital Shekel Challenge," involves various service providers in co-developing a digital payments ecosystem. Participants will use a sandbox environment with APIs to create real-time CBDC payment systems. The initiative, involving private, public, and academic sectors, aims to innovate the payments landscape and potentially bridge the gap between the Web3 industry and government. The BoI believes that the digital shekel could stimulate competition and public support, although concerns about privacy remain.
Trading Desk Insights
Bitcoin continues its pullback towards the 20-day moving average near 66,500, as anticipated. The support range of 65,000 - 66,000 remains robust for now. Since 4am EST, open interest has increased by approximately 3.5%, representing around $500 million. With the current low levels of Cumulative Volume Delta (CVD), it appears that shorts are entering the market. As long as the Dollar Index and the 10-year yield trend higher, we expect continued pressure on risk assets.
In the realm of US BTC ETFs, the market experienced inflows totaling $45 million, led by BlackRock’s $102.5 million. Notably, the Bitcoin ETF flippening has arrived: BlackRock’s IBIT has surpassed Grayscale’s GBTC to become the largest spot bitcoin ETF in the U.S. IBIT now holds nearly $20 billion worth of BTC, while GBTC holds $19.7 billion. BlackRock added IBIT to its income and bond-focused funds on Tuesday.
The New York Stock Exchange plans to list index options tracking the price of BTC, bringing another traditional finance giant into the cryptocurrency space. Additionally, the Volatility Shares 2x Ether ETF (ETHU) will become the first leveraged ETH ETF available in the US, with trading set to begin on June 4.
Stock futures declined on Wednesday, as rising Treasury yields continued to pressure the broader market, despite gains from Nvidia. The 10-year Treasury note yield increased for a second day, last trading around 4.6%. On Tuesday, the yield exceeded 4.5%, a worrisome level for investors, following a Treasury Department auction that saw weak demand.
The major averages are on track to close the month with impressive gains, bolstered partly by enthusiasm over a better-than-expected quarterly earnings season. The S&P 500 is up 5.4% this month, the Dow has advanced 2.7%, and the Nasdaq has climbed 8.7%.
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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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