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Coinbase (COIN) And Bitcoin-Related Stocks Soar Following Grayscale’s Victory

Coinbase and other crypto-related companies witnessed a significant rise in stock prices following reports that Grayscale has emerged victorious in its lawsuit against the United States Securities and Exchange Commission (SEC).

On Tuesday, August 29, the US District of Columbia Court of Appeals ruled that the SEC did not provide a “consistent justification” for rejecting Grayscale’s request to convert its Bitcoin Trust (GBTC) into a spot exchange-traded fund (ETF). This decision brings the asset management firm closer to offering a spot Bitcoin ETF in the US.

The price of Bitcoin reacted positively to this development, breaking above and beyond the $26,000 mark. According to CoinGecko data, the premier cryptocurrency is currently valued at $27,136, reflecting a 3.8% price gain in the past week.

Coinbase (COIN) Rally 15% After Grayscale’s Win

The value of Coinbase’s stock COIN stood at $84.70 by the close of the trading session on Tuesday, representing a 15.2% increase from the day’s opening price. 

The crypto company’s stock surged by nearly $13 per share, climbing from $73.5 per share to almost $86 during the day, according to Coinbase’s stock information. Coinbase, the largest cryptocurrency exchange in the United States, became publicly listed on Nasdaq in 2021.

This price jump is believed to have been triggered by the success of Grayscale’s appeal against the United States SEC, as mentioned above. While the court’s decision doesn’t automatically convert the asset manager’s Bitcoin Trust to a spot ETF, it is still perceived as a significant milestone in launching the financial product in the North American country.

If spot Bitcoin ETFs receive approval from the Securities and Exchange Commission, Coinbase could become one of the biggest winners due to its surveillance-sharing agreements with some applicants, including the world’s largest asset manager, Blackrock.

These arrangements aim to mitigate potential market manipulation risks – a concern raised by the SEC after the initial Bitcoin ETF submissions.

Marathon and Riot Witness Surge In Stocks Price

Coinbase was not the only cryptocurrency company that enjoyed the ripple effect of Grayscale’s legal triumph. Bitcoin mining companies, like Marathon Digital Holdings (MARA) and Riot Platforms (RIOT), also felt a positive impact on their stock prices.

Favorable judgments, such as the latest Grayscale victory, often boost the interest and optimism of investors in the cryptocurrency industry and crypto-related products. As a result, companies operating in the cryptocurrency space, including Bitcoin mining firms, are likely to receive increased attention from investors.

According to TradingView, the value of MARA soared by about 30% on Tuesday, closing at $13.69 per share by the end of the day’s trading session. Likewise, the RIOT price experienced an 18.2% rally, climbing from $10.39 per share to almost $12.3 at the end of the day.

As of this writing, the Marathon Digital Holdings stock is trading at $12.94 per share, reflecting a 5.2% decrease since the opening of Wednesday’s (30th of August) trading session. Meanwhile, Riot Platforms’ stock has currently declined by 4% to trade at $11.8 per share.

Coinbase

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Bankman-Fried Is Looking At “Secretly insolvent” Small Exchanges & Crypto Miners

It’s Sam Bankman-Fried’s time in the spotlight. The FTX and Alameda Ventures golden boy put both of his companies in a winning position and seems to be carrying the spoils away. The recent Forbes piece about secretly insolvent exchanges puts it best, “Like J.P. Morgan during the stock market panic and crash of 1907, Bankman-Fried is taking advantage of the crypto chaos to expand his empire.” Rumors about his involvement in engineering the crash appear to be greatly exaggerated.

NewsBTC reported on FTX’s bailout of BlockFi and Alameda bailing Voyager. In the first article, we summarized the congested macro situation:

“Over the last few weeks, the crypto market has been trending down. The contagion effect of the Terra/ Luna extinction event rocked every company out there, most of all those who offered yield on cryptocurrency deposits like BlockFi and Celsius and hedge funds like Three Arrows Capital. These companies’ problems and possible liquidation of assets, in turn, sent the crypto market into even more turmoil.”

In the Fobes piece, speaking about BlockFi and Voyager’s bailouts, they paint a similar situation with a crucial difference. Here, Bankman-Fried is performing a sacrifice:

“Between FTX and his quantitative trading firm Alameda, he provided the companies with $750 million in credit lines. There is no guarantee that Bankman-Fried will recoup his investment. “You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things and protect customers,” he says.”

And, as you can read, that’s according to Bankman-Fried himself. A few lines below, the article casts doubt on his assessment, “Bankman Fried’s cash infusions are far from altruistic. He has emerged as a smart vulture capitalist in the beleaguered crypto market, knowing full well that his own fortune depends on its healthy rebound and growth.”

Robinhood price chart on NASDAQ | Source: TradingView.com
Bankman-Fried Sets Sight On Small Exchanges And Miners

The rumor that FTX is looking for a way to acquire Robinhood circulated today. The Forbes article elaborates on that subject. “Bankman Fried has also bought into crypto brokerage Robinhood, where FTX has already accumulated a 7.6% stake, and is rumored to be considering an acquisition.” 

Not only that, Forbes estimated that there are more than 600 crypto exchanges in the world. Then, they quote Bankman Fried claiming, “there are some third-tier exchanges that are already secretly insolvent”. Is the implication that his two companies are considering buying some of them? Maybe. However,  Bankman Fried will be picky about exactly which ones:

“There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved.”

In a strange turn of events Bankman-Fried, one of Proof-Of-Stake’s biggest proponents, expressed interest in “crypto miners”. Even stranger, the article then proceeds to list two bitcoin mining companies. Who introduced the word “crypto,” Bankman-Fried or Forbes?

“Bankman-Fried also has his eye on crypto miners, many of whom leveraged their balance sheet at breakneck pace to quickly scale and take advantage of this 21st century digital gold rush. The stocks of publicly-trading crypto miners including Marathon Digital Holdings and Riot Blockchain are down more than 60% year to date.”

Finishing With Tether For Some Reason

Without warning or apparent reason, the Forbes article ends with Sam Bankman-Fried’s thoughts on Tether. “I think that the really bearish views on Tether are wrong…I don’t think there is any evidence to support them,” he says.

Featured Image by 41330 on Pixabay| Charts by TradingView

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MicroStrategy Acquires 4,167 BTC And Marathon Holds 1,259 Self-Mined BTC

Another day, another MicroStrategy bitcoin buy. The Michael Saylor-led company is relentless in its BTC accumulation strategy. In a similar position, the bitcoin mining giant Marathon Digital Holdings doubles down on its no-selling policy. Which is also a BTC accumulation strategy. Will these two giants go down in history as pioneers? 

Related Reading | Treasury Management Firm Says CFOs Avoid Risk, Bitcoin Won’t Become Corporate Vehicle

These companies are adopting the Bitcoin Standard as a way of life. Let’s look at MicroStrategy and Marathon’s stats, where do these new acquisitions put them on the BTC leaderboard? And, how did the market react to both news?

MicroStrategy, Even More Aggressive

The man himself, Michael Saylor announced the acquisition via his very active Twitter:

“MacroStrategy has purchased an additional 4,167 bitcoins for ~$190.5 million at an average price of ~$45,714 per bitcoin. As of 4/4/22 MicroStrategy hodls ~129,218 bitcoins acquired for ~$3.97 billion at an average price of ~$30,700 per bitcoin.”

MacroStrategy has purchased an additional 4,167 bitcoins for ~$190.5 million at an average price of ~$45,714 per #bitcoin. As of 4/4/22 MicroStrategy #hodls ~129,218 bitcoins acquired for ~$3.97 billion at an average price of ~$30,700 per bitcoin. $MSTRhttps://t.co/Z45OuJU5KI

— Michael Saylor⚡ (@saylor) April 5, 2022

To clarify, MacroStrategy is a MicroStrategy subsidiary. This seems to be the buy the company did with the $200M bitcoin-collateralized loan they took a week ago. Our sister site Bitcoinist explains and clarifies:

“The company took the loan via MacroStrategy, a subsidiary created with the purpose of holding its parent company’s Bitcoin funds. As per the release, the $205 million loans were issued under the Silvergate Exchange Network (SEN) and its Leverage program and will mature on March 23, 2025.

The SEN was launched in 2020, the release clarified, to address the demand for BTC collateralized loans.”

Even though 129,218 BTC is a lot for just one entity, it’s beneficial to remember that those are not Michael Saylor’s coins. The treasury belongs to MicroStrategy, a public company owned by many. Still, they own almost triple what Tesla owns. And MicroStrategy keeps on buying. 

Many people talk about buying the dip. But when the dip comes, they panic and sell (as oppose to buy).

This is how you do it.👍 https://t.co/VcAB6NeQoc

— CZ 🔶 Binance (@cz_binance) April 5, 2022

Binance’s CEO Changpeng Zhao reacted to the news with high praise. “Many people talk about buying the dip. But when the dip comes, they panic and sell (as oppose to buy). This is how you do it,” he wrote.

BTC price chart for 04/05/2022 on Kraken | Source: BTC/USD on TradingView.com
Marathon, Even More “Hodling”

In a recent press release, Marathon Digital Holdings announced very healthy-sounding numbers. The company “produced a record 1,258.6 self-mined bitcoin during Q1 2022, a 556% increase from 191.8 self-mined bitcoin in Q1 2021 and a 15% sequential increase from 1,098.2 self-mined bitcoin in Q4 2021.” Plus, in March alone, they “successfully deployed 1,320 miners.”

About the increase, the company’s CEO Fred Thiel said: 

“In the first quarter of 2022, we increased our bitcoin production 15% from the prior quarter and produced a record 1,259 bitcoin even as the global hash rate rose by approximately 17%,”

Where does that put them on the bitcoin leaderboard? Well, Marathon “increased total bitcoin holdings to approximately 9,373.6 BTC with a fair market value of approximately $427.7 million.” The company’s accumulation strategy began in October 2020, the last time Marathon sold bitcoin. 

Related Reading | Allied Payment Partners NYDIG, Adds Bitcoin To Corporate Treasury 

MicroStrategy, The Leaderboard, And The Market

According to the Bitcoin Treasuries list, these acquisitions put both companies at the bookends of the Top 5. That is:

  1. MicroStrategy, 125,051 BTC
  2. Tesla Inc., 42,902 BTC
  3. Galaxy Digital Holdings, 16,400 BTC
  4. Voyager Digital LTD, 12,260 BTC
  5. Marathon Digital Holdings, 8,956 BTC

Nevertheless, the market seems to have reacted negatively to the news. At 9 am, BTC traded in the $47K range. It dropped continually during the day and around noon it was trading in the $45.5K range. Is MicroStrategy to blame? Or was it just a coincidence?

Featured Image by terimakasih0 on Pixabay | Charts by TradingView