Here’s What You Missed in Crypto This Week

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.

ROBINHOOD TO ACQUIRE CRYPTO EXCHANGE BITSTAMP: Robinhood Markets (HOOD) announced Thursday it has entered into an agreement to acquire Bitstamp, which was founded in 2011 and has offices in Luxembourg, the UK, Slovenia, Singapore, and the US. The company said, “Acquiring a global exchange will significantly accelerate Robinhood Crypto’s expansion worldwide. Bitstamp holds over 50 active licenses and registrations globally and will bring in customers across the EU, UK, US and Asia to Robinhood. This acquisition will introduce Robinhood’s first institutional business. Bitstamp has been trusted by its institutional clients for reliable trade execution, deep order books and industry-leading API connectivity. With Bitstamp’s other institutional offerings like white label solution Bitstamp-as-a-service, institutional lending, and staking, Robinhood will enter the space with active and established relationships, infrastructure and industry-leading products. Bitstamp’s core spot exchange, with over 85 tradable assets, and products like staking and lending, will enhance Robinhood’s Crypto offering…Bitstamp’s team will join forces with Robinhood, fostering collaboration, innovation, and knowledge sharing across continents. Robinhood and Bitstamp customers can expect the same level of service, security and reliability and as we move forward, we are committed to maintaining transparency throughout this process.” Robinhood expects the final deal consideration to be approximately $200M in cash, subject to customary purchase price adjustments. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. (read more)

KERRISDALE ISSUES RIOT SHORT REPORT: Kerrisdale Capital announced Wednesday a short position in Riot Platforms (RIOT), saying the company “does a far better job playing energy arbitrage games and issuing stock than generating shareholder value by mining crypto.” The firm said that “with numerous low fee bitcoin ETFs and ETPs, why own shares in a company like Riot, which has seen bitcoin holdings per share and bitcoin production per share steadily decline, versus simply owning bitcoin itself.” The company “is a fundamentally poor way for investors to express a view on bitcoin and over the long-term shares have a much greater chance of being diluted into dust than outpacing gains from the new digital gold,” according to Kerrisdale. (read more)

Riot announced Wednesday that it acquired ownership of 1,460,278 common shares of Bitfarms (BITF) representing approximately 0.37% of the issued and outstanding common shares. The shares were acquired through normal course purchases on the Nasdaq Stock Market and other open market trades for a weighted average price of approximately $2.45 per share for an aggregate amount equal to $3,580,455.63. Immediately prior to the acquisition of shares, Riot beneficially owned 46,370,162 common shares, representing approximately 11.63% of the issued and outstanding common shares. Following completion of the acquisition, Riot beneficially owned 47,830,440 common shares, representing approximately 12.00% of the issued and outstanding common shares. Riot currently intends to requisition a special meeting of the company’s shareholders, at which Riot intends to nominate several independent directors to join the company’s board of directors. (read more)

On Tuesday, JPMorgan lowered the firm’s price target on Riot to $12 from $15.50 and kept an Overweight rating on the shares. The firm updated its bitcoin miner models and price targets to reflect the Q1 results, increased 2024 hashrate targets and modest changes in spot bitcoin prices. The analyst is taking a less constructive view on a post-halving bitcoin rally, which drive lower December 2024 price targets and estimates. JPMorgan previously modeled a 30% stair-step increase in bitcoin in the months following the halving. However, it now sees a 15% stair-step increase in bitcoin price in Q3, as it believes a portion of the rally may have been pulled forward this cycle. (read more)

JPMorgan also lowered the firm’s price target on Marathon Digital (MARA) to $14 from $16.50 and kept an Underweight rating on the shares (read more) and on CleanSpark (CLSK) to $12.50 from $15 and kept a Neutral rating on the shares. (read more) Meanwhile, the firm raised its price target on Iris Energy (IREN) to $11 from $10 and kept an Overweight rating on the shares. (read more)

Additionally on Tuesday, H.C. Wainwright assumed coverage of Bitfarms with a Buy rating and $4 price target. Bitfarms is a global, vertically integrated pure-play bitcoin mining company with operations spanning across 12 mining facilities in four countries, including Canada, the U.S., Paraguay, and Argentina, the analyst said. The firm is bullish on the price of bitcoin over the medium and long term, as it expects the price to break above the six-figure mark this cycle. It believes Bitfarms shares provide investors with superior exposure to bitcoin “in this next leg of the bull cycle.” (read more)

BITDEER TO ACQUIRE DESIWEMINER: Bitdeer Technologies Group (BTDR) announced Thursday that it entered into a share purchase agreement with FreeChain, known as Desiweminer, a fabless crypto ASIC design company, to acquire all of the issued and outstanding shares for a consideration of 20M Class A ordinary shares. A portion of the Bitdeer shares to be issued pursuant to the agreement will vest in equal installments over a period of five or seven years, subject to the terms and conditions therein. Additionally, 50% of the Bitdeer shares issued to certain sellers under the agreement cannot be transferred for a period of six months following the closing, and the remaining 50% of the Bitdeer shares issued to such sellers cannot be transferred for a period of twelve months following the closing. The strategic acquisition, which is subject to customary closing conditions, follows a ten-month due diligence period, during which Bitdeer thoroughly evaluated Desiweminer’s technology, engineering team, and supply chain. The company said, “Desiweminer’s cutting-edge chip designs are highly complementary to those developed by Bitdeer and are ideally suited for advanced semiconductor processes at 4nm and below. With this acquisition, the Desiweminer team will join Bitdeer’s ASIC design team in Singapore, further strengthening the company’s capabilities and accelerating its time to market. Products featuring integrated technologies are slated for imminent release.” (read more)

CORE SCIENTIFIC REJECTS COREWEAVE PROPOSAL: On Thursday, Core Scientific (CORZ) confirmed that it received an unsolicited non-binding proposal from CoreWeave on June 3 to acquire all of the outstanding shares of the company on a fully diluted basis for $5.75 per share in cash. This unsolicited proposal immediately followed Core Scientific and CoreWeave entering a series of 12-year contracts for Core Scientific to provide approximately 200 MW of infrastructure to host CoreWeave’s high-performance compute services. The company’s board, in consultation with its independent financial and legal advisors, carefully reviewed the proposal.  The company said, “The board has evaluated the company’s growth prospects and near- and long-term value creation potential, including in connection with both the previously announced CoreWeave agreements and the proposal. The board determined that the CoreWeave proposal significantly undervalues the company and is not in the best interests of the company and its shareholders. Core Scientific continues to focus on capitalizing on its valuable portfolio of high-power digital infrastructure to expand its HPC hosting business, including through the execution of the recently announced contracted projects with CoreWeave. With greater than 300 MW of additional HPC capacity available, the company is pursuing potential future transactions with CoreWeave or other HPC customers, while maintaining its strong bitcoin mining franchise.” (read more)

Additionally on Thursday, BTIG raised the firm’s price target on Core Scientific to $10 from $8 and kept a Buy rating on the shares. The “data center gold rush” driven by artificial intelligence that has accelerated and highlighted the growing need for data centers is “in the early innings,” the analyst said. The firm said access to or lack of power “has been smacking the market in the face”. (read more)

COINBASE DEBUTS SMART WALLETS: In a Wednesday blog post, Coinbase (COIN) said, “At Coinbase, we have always envisioned a world where everyone can seamlessly participate onchain. Today, we’re launching the next evolution of self-custodial wallets. Smart wallets are a revolutionary step forward in our mission to bring more than 1 billion users onchain. These next-generation wallets address the biggest pain points of the crypto experience today-complex onboarding, network fees, and recovery phrases-making the transition to onchain smoother than ever. Smart wallets offer a streamlined, gasless onchain experience. This simplicity, combined with multi-chain support and integration with major applications, will make onboarding to the blockchain as effortless as signing into your favorite website.” (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific, Greenidge Generation (GREE), Marathon Digital, MicroStrategy (MSTR), Riot Platforms, Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin rose about 6% this week at $71,285 in U.S. dollars, according to CoinDesk.