Summary List PlacementCoinbase's surge in popularity amid a boom in cryptocurrencies has helped mint founder and CEO Brian Armstrong as one of the newest Silicon Valley ultra-rich.
Amstrong is set to reap a potential $3 billion windfall from the digital currency exchange's direct listing as a trend of mega grants to tech founders continues full steam ahead, Bloomberg calculated from company filings and news reports. His stake in the company is worth $15 billion, the news site estimates.
In 2020, Armstrong took home $56 million of stock option awards on top of a $1 million salary and another $1.8 million in reimbursement for legal and security fees, according to registration documents.
Like peers including Elon Musk, the most well-payed CEO in the world in recent years, Armstrong's pay day isn't a shoe-in. He'll need to shepherd the company through a choppy cryptocurrency market, and hit certain milestones along the way. What's more, his 9.3 million option grant doesn't even begin vesting until Coinbase's stock price hits $200 — up from a "fair value" award price of $23.49.
"We believe the performance conditions associated with the 2020 CEO Performance Award are extremely rigorous and appropriately align Mr. Armstrong's incentives with the interests of our stockholders," Coinbase said in its filing. His options fully vest at a roughly 1,600% price increase.
Coinbase is set to hit public exchanges within weeks, when outside investors for the first time will value shares of the company. Luckily for Armstrong, the required price increases could be near: Axios reported in February that Coinbase sold several tranches of stock totaling 1.8 million shares, going for as high as $303 each — a nearly 1200% increase from the option strike price.
As traders await first trades, bitcoin has continued to spike higher. The world's largest cryptocurrency surged as high as $57,000 last month before paring some of gains in recent weeks. A survey by Goldman Sachs found the bank's clients to be largely optimistic about the currency's future price, with 22% expecting it to double in the next year.Join the conversation about this story » NOW WATCH: Sarah McBride made history becoming the first openly trans person elected to a state Senate seat. In 2018, she explained why the Trump administration wouldn't discourage her work. […]
Summary List PlacementGoldman Sachs said that 22% of its clients expect the price of bitcoin to hit at least $100,000 in the next 12 months, according to a survey from the investment bank seen by Coinbase. Meanwhile, 54% of the respondents predict the price of the cryptocurrency will hover at $40,000-$100,000 in the same period.
Published on March 3, the investment bank surveyed 280 respondents on their exposure, perspective, and outlook of digital assets. The same survey also showed that 40% have exposure to cryptocurrencies.
57% believe that positive news such as institutional investing drove the price higher. In February, major companies threw their weight behind bitcoin, including Tesla and MasterCard, while the token saw renewed backing from MicroStrategy.
Looking ahead, 34% of the respondents believe the greatest hurdle in allocating money to digital assets is regulation, while 24% see the lack of well-regulated and investible assets as the greatest obstacle.
US treasury Secretary Janet Yellen has been vocal about her criticism of bitcoin, saying it has been a tool to "launder the profits of online drug traffickers." The former Federal Reserve chief has also cast doubt on the utility of bitcoin as a form of payment.
On March 1, it was reported that Goldman Sachs Group restarted its cryptocurrency trading desk amid a boom in bitcoin. The desk, Reuters reported, will be part of the bank's efforts to keep up with the rapidly evolving digital assets sector.
Bitcoin in February cracked the $1 trillion dollar market capitalization threshold and jumped to $58,640, its highest record to date. Bitcoin has risen 63% year-to-date.
Bitcoin traded lower by 3% on Friday, at $47,516.Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that's worth .001% of his total wealt […]
Summary List PlacementNewly formed bitcoin mining operation Cipher Mining Technologies announced it will go public in a merger with blank-check company Good Works Acquisition. The deal values the combined entity at $2 billion.
The transaction is expected to close in the second quarter of 2021. Upon closing, the combined companies will be named Cipher Mining and will trade under the Nasdaq ticker symbol CIFR.
The deal is expected to give the combined companies $595 million in gross cash proceeds, which includes a $425 million PIPE (private investment in public equity) from investors such as Fidelity Management & Research Company and Counterpoint Global, a unit of Morgan Stanley.
"We were attracted to Cipher Mining as we believe the Bitcoin mining space represents a compelling way to gain risk-adjusted exposure to the growing crypto ecosystem," said Good Works Co-Chairman Doug Wurth in a statement.
Cipher Mining is a subsidiary of Bitfury Top HoldCo B.V or Bitfury Group. Since 2011, the Bifury Group has been a provider of bitcoin mining hardware and other blockchain software and services.
Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that's worth .001% of his total wealt […]
Summary List PlacementMike Novogratz said Mark Cuban's plan for the Dallas Mavericks to accept Dogecoin is a "mistake."
He said the focus should be on bitcoin – which banks are "frantically" getting involved with.
Yet many seasoned investors remain skeptical about bitcoin's uses and volatility.
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Mike Novogratz has said he thinks Mark Cuban is making a "mistake" in letting Dallas Mavericks fans pay for tickets and merchandise in Dogecoin, calling it a "joke" currency.
The Galaxy Digital boss told Bloomberg TV bitcoin is where the action is, saying banks are "frantically" trying to get into the world's biggest cryptocurrency, and that it could jump to $500,000 by replacing gold as investors' favored hedging asset.
Mavericks owner Cuban said on Thursday he was taking the "fun" decision to let the NBA team start accepting Dogecoin, the meme cryptocurrency that started as a joke, but has a market capitalization of more than $6.4 billion.
Novogratz criticized the move, saying: "I think Mark's making a mistake there. He'd be better off with 15 other ways to pay for his tickets."
He raised concerns that young investors would get hurt by piling into Dogecoin. "Let's put people in the safest, best stuff, not, you know, these joke coins," he said.
Novogratz said he thinks bitcoin can soar to $500,000 in the future thanks to a "paradigm shift", with banks "frantically trying to figure out how to get into crypto." He cited interest from JPMorgan, which has supported customers investing, and Goldman Sachs, which has reopened a crypto desk.
The Galaxy boss, who is himself a major investor in bitcoin, said it is increasingly being seen as "digital gold" – in the sense that investors want to hold it as a store of value when they expect inflation. He said it is now an "institutional" asset class.
"We are in the middle of a paradigm shift," he said. "And so bitcoin is wildly outperforming gold even though they're both hedging the same thing. It's outperforming because we're in this once-in-a-generational adoption of crypto."
Bitcoin was down 4% on Friday to $47,280, more than $10,000 off February's all-time high. But Novogratz said investors need some "perspective", flagging bitcoin is up around 60% on the year, while the S&P 500 index is flat.
Many seasoned investors are highly skeptical about bitcoin, however, and are expecting it to plunge again as it did in 2017. They argue it serves little purpose, as it is too volatile to be used as a currency.
In January, Elliott Management boss Paul Singer told clients in a letter reported by Bloomberg he thought bitcoin would eventually falter, bringing about a "we told you so" moment for him and colleagues.Join the conversation about this story » NOW WATCH: A top economist explains how weighted voting could change democracy […]
Summary List PlacementGeorge Ball told Yahoo Finance on Thursday that he believes cryptocurrencies are "attractive" as a "small part" of any portfolio.
Until recently, the chairman and CEO of investment firm Sanders Morris Harris had long been a critic of bitcoin and other cryptocurrencies.
In a video call with Reuters last August, Ball told investors that it was time to buy bitcoin.
"I've never said this before, and I've always been a blockchain, cryptocurrency and bitcoin opponent. But if you look now, the government cannot stimulate markets forever, the liquidity flood will end," Ball said.
Now, Ball is again making the case for investors to consider digital assets.
"With the cryptocurrencies, I think there is a fundamental hydra-headed shift that makes them attractive as a part, a small part, of almost any portfolio," Ball said.
Ball told Yahoo Finance that he believes cryptocurrencies are now ideal targets for investment by wealthy individuals and institutional investors for two main reasons. First, Ball argued cryptocurrencies will be an effective hedge against the debasement of fiat currency.
"Longer-term if inflation is back, if we start to debase the currency badly, then the cryptocurrencies have a great deal of allure," Ball said.
Secondly, Ball believes the increase in retail traders who speculate on stocks could lead to rising crypto prices. Ball said that the retail investor market has gone from "5% trading volume to 30%, to maybe 35%, of all volume today."
The CEO said retail stock speculators will move to cryptocurrencies if they begin to face losses in the equity market.
"So if the investors are losing money in common stocks, but still want to speculate, then the cryptocurrencies I think will be the logical and likely next focus of their combined, individually small, but combined very large dollars," the CEO said.
Ball's bullish view of cryptocurrencies comes amid a historic run for bitcoin, which hit record highs of over $58,000 per coin in February buoyed by institutional investment and interest from Tesla, MicroStrategy, and Square, among others.
And with high-flying tech stocks struggling, Ball's prediction of a shift from stock speculation to crypto speculation may prove prescient.Join the conversation about this story » NOW WATCH: Warren Buffett lives in a modest house that's worth .001% of his total wealt […]
Summary List PlacementBitcoin will eventually be the world's currency, because "you have to think it's going to infinity," Jesse Powell, the CEO of the cryptocurrency exchange Kraken, told Bloomberg on Wednesday.
He said that national currencies were "already showing extreme signs of weakness" and that people would soon start measuring the price of things in bitcoin.
"The true believers will tell you it's going all the way to the moon, to Mars, and eventually it'll be the world's currency," Powell said.
Kraken, based in San Francisco, is in talks to raise new funding that would double its valuation to over $10 billion, Bloomberg reported in late February.
The price of bitcoin fell on Thursday by 0.4%, to $50,175, but is up 70% year-to-date. The price slipped earlier this week after Gary Gensler, the nominee to lead the Securities and Exchange Commission, said at his confirmation hearing that making sure crypto markets are free of fraud and manipulation was a challenge. Gensler has been viewed as an advocate for cryptocurrencies, given his previous work and teachings on the subject at MIT.
"In the near term, people see it surpassing gold as a store of value, so I think $1 million as a price target within the next 10 years is very reasonable," Powell said of bitcoin.
Bitcoin believers expect it to replace fiat money, and the market capitalization of all national currencies combined could make up its worth, Powell said.
Read more: UBS: Buy these 14 back-to-normal stocks now before a 'sharp acceleration' in consumer spending in Q2 as vaccinations pick upSEE ALSO: UBS more than doubles its Tesla price target, citing huge upside in the automaker's software business
Join the conversation about this story » NOW WATCH: A top economist explains how weighted voting could change democracy […]
Summary List PlacementBinance's CEO Changpeng Zhao said he is seeing increased institutional adoption of bitcoin and other cryptocurrencies on his cryptocurrency exchange over the past few months.
Zhao founded Binance in 2017 and the platform quickly became the largest cryptocurrency exchange in the world by trading volume. Binance boasts an average daily trading volume of $28.85 billion, according to data from Statista. For reference, the Nasdaq clocked $287 billion in volume on March 3.
The CEO said in an interview with Bloomberg on Thursday that he has seen "much higher uptake on institutional adoption" and "a lot more institutions coming in." He added that the buyers "typically trade much larger sizes."
Zhao also noted "the total size of the user base is growing very rapidly, especially in the last year" at Binance. Although the average size of the accounts on the platform remain relatively small, new investments from institutions are changing the makeup of accounts on the exchange.
On top of that, Zhao said he is seeing investments from "corporate treasury coming in" as well.
He said the corporate treasury buyers have "a very unique buying pattern. They buy over long periods of time, long meaning like weeks or months, and then they just buy and they don't sell."
The CEO said the pattern is "quite new" and "probably mostly promoted by Michael Saylor of MicroStrategy."
Michael Saylor, the CEO of the business intelligence firm MicroStrategy, has been one of bitcoin's main evangelists. Saylor acquired over $1 billion of bitcoin for his firm in a move that stirred controversy, but also brought more attention to the potential for coporate investments in crypto.
Saylor held a virtual conference called Bitcoin for Corporations on February 4 in a move he said was due to "popular demand."
According to Zhao, Saylor's move may have pushed more institutions into crypto, and data from JPMorgan backs up his beliefs. A survey carried out by the investment bank found that 22% of institutional investors at firms that don't currently trade in cryptocurrency believe their companies are likely to do so in the future.Join the conversation about this story » NOW WATCH: What candy corn is actually made of […]
Summary List PlacementBitcoin surged 5% on Wednesday to reclaim the $50,000 level as more firms eye exposure to the cryptocurrency space.
PayPal is said to have paid more than $200 to acquire Curv, a crypto custody firm based in Israel, while Goldman Sachs revived its crypto trading desk.
The surge higher also follows SEC nominee Gary Gensler's testimony to Congress.
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Bitcoin spiked 5% and reclaimed the key $50,000 level on Wednesday as more businesses are seeking exposure to the growing cryptocurrency space.
Bitcoin hasn't traded above $50,000 since late February, following a more than 10% sell-off that saw the cryptocurrency fall to below $45,000.
The move higher in bitcoin came after SEC Chairman nominee Gary Gensler testified to Congress on Tuesday. Gensler said the SEC will do its part to eliminate fraud and manipulation from crypto markets. Gensler has been seen as receptive to bitcoin, based on his previous works and teachings on the subject at MIT.
Businesses, meanwhile, continue to take notice of bitcoin's continued rise higher. Goldman Sachs is set to revive its crypto trading desk, according to reports. The investment bank will start dealing bitcoin futures and non-deliverable forwards beginning next week.
Goldman Sachs, which first set up a cryptocurrency desk in 2018, is also reportedly exploring a bitcoin exchange traded fund.
PayPal is also continuing to increase its exposure to the crypto market, based on a report from CoinDesk that it is acquiring Curv for more than $200 million. Curv is an Israeli-based crypto custody firm.
PayPal already enabled its users to spend with bitcoin late last year, and the fintech company plans to enable functionality for its popular Venmo app later this year.
Bitcoin traded at $51,300 as of 8:55 a.m. The cryptocurrency is up more than 65% year-to-date.
Read more: Buy these 14 stocks set to go into overdrive as consumers' stimulus checks arrive in March, Cowen says
Join the conversation about this story » NOW WATCH: A top economist explains how weighted voting could change democracy […]
Summary List PlacementKevin O'Leary once called bitcoin "garbage" but now plans to invest 3% of his portfolio.
He said the arrival of bitcoin ETFs was a "gamechanger" that lets institutions get involved.
O'Leary said he was focused on holding bitcoin sustainably.
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Kevin O'Leary no longer thinks bitcoin is "garbage."
The "Shark Tank" star is now planning to put 3% of his portfolio into the world's biggest cryptocurrency, saying bitcoin ETFs and inflation worries have prompted a change of heart.
Canadian and other regulators allowing bitcoin exchange-traded funds is a "game-changer", because it allows "institutions and individuals alike to allocate" money to bitcoin more safely, O'Leary told Stansberry Research on Tuesday.
O'Leary said he plans to allocate 3% to bitcoin, in part because he sees it as a hedge against inflation. "The concern I have right now in the US market is a $1.9 trillion-, basically free-money helicopter, out of the sky, into the economy," he said.
"How do I hedge myself against that?" the O'Shares ETFs boss asked. "If the regulator is now opening up to allow me to allocate to crypto, why not?"
It is a major reversal of O'Leary's previous position. Only in January he called bitcoin a "giant-nothing burger" and said he wouldn't invest in it. In 2019, he went so far as to call bitcoin "garbage" and a "useless currency."
On Tuesday, O'Leary told Stansberry's Daniela Cambone: "When facts change, I change."
The TV star and businessman is not the only one to have been sucked in by bitcoin's meteoric price rise, with Elon Musk's Tesla and business technology company MicroStrategy both allocating large amounts of cash to the cryptocurrency.
On Sunday, Fidelity Investments' director of global macro Jurrien Timmer said in a note he thought bitcoin has "gone mainstream." He also said he thought bitcoin could be a good store of value if inflation erodes the purchasing power of other currencies.
O'Leary said he was concerned by bitcoin's massive energy consumption, however, and said he was in discussions with miners to make sure he could invest sustainably.
Despite some investors' enthusiasm, many argue that bitcoin's volatility means it is an inappropriate addition to a portfolio and useless as a means of transaction.
Will Hobbs, CIO Barclays Wealth & Investments, told Insider in February bitcoin is "multiples more volatile than our most white-knuckle-ride asset class, which is emerging-market equities."
Bitcoin traded at around $51,300 on Wednesday morning, taking year-to-date gains of more than 70%.Join the conversation about this story » NOW WATCH: We took a 1964 Louisiana literacy test and failed spectacularly […]
Summary List PlacementWhat's a hundred billion here and there when you're one of the most valuable companies in the world?
For Tesla, it's notable: the electric carmaker's market capitalization had been surging toward a trillion bucks, but after dropping 13% in the past month, it's now hovering around $700 billion. That's still more than seven times General Motors' market cap, but the downward trend did raise questions.
One of them was, "Is this about bitcoin?" Tesla added $1.5 billion in the cryptocurrency to its balance sheet a few weeks ago, just in time for bitcoin to spike in value — and then plunge, as the defiantly unstable asset is wont to do. Tesla might have contributed marginally to the uptick, and the Tesla selloff — which occurred in the context of a broader slide for tech stock — could be interpreted as a kind of bet against bitcoin, with Tesla as the trading vehicle.
But that would be something of an overthink. Tesla dropped because Tesla is up almost 450% over the past 12 months. For investors who have held the line since 2010, when Tesla staged a modest IPO, the return is — brace yourselves, FOMO folks — more than 15,000%.
You buy stock to sell it someday and make money
Buy and hold goes out the window when faced with paper profits that are so extreme. Never selling a security is a good idea if you're a low-key investor who wants a diversified portfolio and expects a 10% aggregate return when you finally tap out after several decades of enjoying the ups and enduring the downs.
But sitting on four-digit returns when some big declines for a historically volatile stock could be just over the horizon is, in a word, stupid. Tesla might not be done, but a rational analysis does suggest that the relatively small automaker — it sold only about 500,000 vehicles last year, while GM sold nearly seven million, in a market that was hammered by the COVID-19 pandemic — is rather seriously oversold.
There are plenty of other, cheaper stocks that look undervalued, especially as the global economy emerges from the pandemic. Even for non-professional investors, taking profits from a winner and putting them into a company that might have some fresh runway in front of it is never a bad idea. At a basic level, the whole point of buying shares is to make money, and once you have, timing takes over.
Risk does matter. And for investors who have been holding Tesla for a few years, that risk has yielded stunning rewards. So don't get hung up on how it happened! And don't worry that selling at stratospheric highs is a betrayal. It didn't bother Tesla CEO Elon Musk when he and his partners sold PayPal to eBay in 2002 for $1.5 billion — Musk took his winnings and invested in Tesla and SpaceX.
A classic example of grasping for bad news
The negative viewpoints on Tesla's dip, based on the bitcoin purchase, were a classic example of grasping for bad news in a good-news situation. Tesla crypto exposure is a fraction of the market cap, and while it isn't a minor percentage of Tesla's total "cash and marketable securities" line on the balance sheet — that's around $20 billion — Tesla could undertake a capital raise at any time and rake in another $5 billion. You don't need a fortress balance sheet if your cost of capital is effectively zero.
The only thing worse than blaming Tesla's slide on bitcoin is attributing the dip to a perception that future competition is coming to drink Musk's milkshake. The global electric-vehicle market represents about 2% of sales. In a market of that size — really, a rounding error — attributing weakness in the share price of the hegemon to competition just proves that if you're betting against Tesla with that thesis, you deserve to lose money.
In the end, Tesla's bitcoin position is just a hedge against crypto becoming a more important feature of 21st-century transactions. At the extreme, it could be part of Tesla setting up its own financing operations.
At a more mundane level, it could simply enable Tesla to get to yes if a customer shows up with a bunch of BTC and wants to buy a car. Because in the auto industry, you never want to say no to a sale.
So there you have it. Tesla stock decline, meet Occam's Razor: it's about profit-taking, and nothing more.FOLLOW US: On Facebook for more car and transportation content!
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Summary List PlacementAbout 29% of investors view COVID-19 variants as the greatest risk to markets, according to a JPMorgan survey.
Investors also cited a possible correction in expensive equity sectors and stronger inflation as dangers to the bull market.
Six-in-ten respondents deemed cryptocurrencies as being in a bubble, and nearly all said they believe fraud is at least somewhat prevalent in the space.
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Investors are split on which downside risks are most likely to topple the stock market's bull run.
JPMorgan surveyed clients attending its Macro Quantitative conference in late January on several aspects of the current investing landscape. The questioning came as stocks sat near then-record highs, lifted by hopes for another stimulus bill and declining COVID-19 case counts.
Concerns of overvaluation and the emergence of new COVID-19 variants have since dented the market's run-up, and those risks remain top of mind for investors. About 29% of surveyed investors deemed coronavirus mutations the biggest risk to markets, while 28% cited a correction in expensive equity sectors, according to JPMorgan. Roughly one-fifth of respondents named rising yields and stronger inflation as a major risk.
Only 13% of investors cited concerns of central-bank tapering. The Federal Reserve has indicated it won't slow the pace of its asset purchases until the US economy makes "substantial further progress" toward reaching above-2% inflation and maximum employment. For now, the Fed continues to buy at least $80 billion of Treasurys and $40 billion of mortgage-backed securities each month.
A double-dip recession scenario was the least-feared market risk, garnering just 9% of investors' votes.
Nearly 60% of investors thought cryptocurrencies were in a bubble. Bitcoin had just fallen from highs of nearly $40,000 at the time of the conference and now trades near $52,000.
Only 11% of investors said they trade cryptocurrencies, and of those who said they don't, 22% plan to start. A majority of respondents said they believe cryptocurrencies are "here to stay." More than three-quarters of respondents expect tighter regulation of the cryptocurrency market, and almost all investors believe fraud is either somewhat or very prevalent in the space.
Electric vehicles and green tech stocks were viewed as a bubble by 29% of investors surveyed, according to JPMorgan. Only 3% of investors saw bond-proxies as trading in bubble territory despite yields sitting close to record lows.
Nearly half of the survey's respondents see ESG funds receiving the largest inflows, while risk parity strategies are expected to see the largest outflows. About 84% of investors expect value outperformance to continue as the economy reopens and ailing sectors rebound.Join the conversation about this story » NOW WATCH: We took a 1964 Louisiana literacy test and failed spectacularly […]
Summary List PlacementCBOE Global Markets has filed a request with the US Securities and Exchange Commission seeking approval to list shares of asset manager VanEck's bitcoin exchange-traded fund, in the latest attempt to launch a bitcoin ETF in the US.
CBOE on Monday filed a Form 19b-4 seeking permission to list and trade shares of the VanEck Bitcoin Trust. The filing builds on Van Eck's earlier S-1 filing from December 30. VanEck also filed a proposal in September 2019, which it withdrew.
The form signifies the beginning of the formal review process, which could result in the first US bitcoin ETF. If approved, VanEck's fund will also be CBOE's first cryptocurrency product since the exchange holding company halted offering bitcoin futures in February 2019. CBOE in December 2017 was the first regulated financial institution to offer bitcoin futures contracts in the US.
Once the regulator announces that it is reviewing the application, the first 45-day timeline begins, in which the SEC is mandated to either approve or reject the application. It can also extend the review period for up to 240 days.
The SEC in the past has rejected numerous applications for bitcoin ETFs. The CBOE in its filing highlighted the advantages of a bitcoin fund, especially for retail traders.
"Exposure to bitcoin through an ETP [exchange-traded product] also presents certain advantages for retail investors compared to buying spot bitcoin directly. The most notable advantage is the use of the Custodian to custody the Trust's bitcoin assets." It did not disclose the name of the custodian.
In North America, two bitcoin ETFs have been approved by Canada, with The Purpose Bitcoin ETF beginning trading last month.Join the conversation about this story » NOW WATCH: Sarah McBride made history becoming the first openly trans person elected to a state Senate seat. In 2018, she explained why the Trump administration wouldn't discourage her work. […]