Crypto And Wall Street 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:
1. DOJ OPENS CRIMINAL PROBE: The Justice Department has opened a criminal investigation into whether traders are manipulating the price of bitcoin and other cryptocurrencies, ramping up scrutiny of the markets that critics say are rife with misconduct, Bloomberg reported Thursday. Federal prosecutors are working with the Commodity Futures Trading Commission and the probe is in early stages. The Department is focused on illegal practices that can affect prices such as spoofing, or flooding the market with fake orders to trick other traders into buying and selling, and wash trading, in which a trader trades with himself to give the false impression of market demand.
2. GPU DEMAND SAID TO SLOW: AMD (AMD) and Nvidia (NVDA) could see curbed profitability from the second to fourth quarters of 2018 due to the sudden slowing of cryptocurrency hype causing declining demand for mining GPUs, DigiTimes reported Tuesday. Companies in the two graphic card suppliers' supply chain are likely to see weaker earnings and shipment growth momentum than a year earlier and both AMD and Nvidia previously predicted slower demand for mining graphics cards and revenue declines in the next quarter.
3. OVERSTOCK'S tZERO TO LAUNCH TOKEN EXCHANGE: Overstock (OSTK) subsidiary t0.com and BOX Digital Markets announced a joint venture Tuesday to launch the industry's first regulated security token exchange. On May 18, the two companies entered into a letter of intent to form an exchange to list and publicly trade security tokens for companies that issue, or convert existing stock to, security tokens. The proposed joint venture would be equally owned by tZERO and BOX Digital, with each having equal representation on the board, together with one mutually agreed upon independent director. Lisa Fall, who currently serves as chief executive officer of BOX Digital and as president of BOX Options Exchange would be the CEO of the joint venture.
4. DEUTSCHE BOERSE MULLS CRYPTO PRODUCTS: European exchange company Deutsche Boerse (DBOEY) is reviewing whether to offer cryptocurrency products after U.S. rivals CBOE Global Markets (CBOE) and CME Group (CME) started bitcoin futures last year, Bloomberg reported Wednesday. "Before we move forward with anything like Bitcoin we want to make sure we understand the underlying transaction which isn't the easiest thing to do," said Jeffrey Tessler, the company's head of clients, adding, "We are deep at work with it," but the group is "not at the same stage" as CME.
5. SSC COMMENCES SALES OF DOAI TOKENS: Seven Stars Cloud Group (SSC) announced Wednesday that private and pre-sales of its Digital Oil Asset Index tokens in the Greater China Region commenced on May 18 and will conclude around the end of June with general sales continuing until the end of September. The first sales are taking place in the Greater China Region only and the company is planning a build out to expand its sales scalability with partners in other regions including the Middle East, Southeast Asia, Korea, Japan, Europe and eventually North America. The DOAI tokens are built atop Ethereum, said SSC, which added that it intends to launch three to four additional commodity market related index products and at least one currency market related index product in 2018.
6. RIOT INVESTS IN THE BLOCK CRYPTO: On Thursday, Riot Blockchain (RIOT) announced a strategic investment in The Block Crypto, which is building a community for enthusiasts of blockchain technology and cryptoassets. "The company's investment in The Block will be used to advance its technology and continue building its team," Riot said.
CRYPTO STOCK PLAYS: Overstock, DPW Holdings (DPW), Kodak (KODK), Seven Stars Cloud Group, Riot Blockchain, Pareteum (TEUM) and Social Reality (SRAX) are stocks that have been touted, or promoted themselves, as a way to play the crypto theme
PRICE ACTION: As of time of writing, bitcoin dropped roughly 7.4% this week to $7,485 in U.S. dollars according to CoinDesk.
Disclaimer: TheFly's news is intended for informational purposes only and does not claim to be actionable for investment decisions. Read more at TheFly.com.