Financial Services Giant Considers Providing Crypto Trading to Brokerage Clients
September 29, 2022 at 12:20 PM EDT
According to a Wall Street Journal report, the world’s largest provider of financial services, Fidelity, is debating whether or not to permit individual brokerage customers to trade bitcoin (BTC). Fidelity announced plans to enable business clients to add bitcoin to the 401(k) accounts it administers for them earlier this year. However, the U.S. Labor Department and some U.S. senators have criticized the plan. Fidelity has more than 34.4 million individual brokerage accounts. This prospective action comes after BlackRock teamed up with Coinbase Global, Inc. (NASDAQ:COIN) to offer crypto trading to its institutional clients, a sign Wall Street is still drawn to cryptocurrency despite the disastrous year for markets in digital currencies. Investors still attracted to crypto is also good news for WonderFi Technologies (TSX:WNDR) (OTC:WONDF), Bit Digital Inc. (NASDAQ:BTBT), Bitfarms and Hive Blockchain Technologies (NASDAQ:HIVE) (TSXV:HIVE).
On September 29, WonderFi Technologies Inc. (TSX:WNDR) (OTCQB: WONDF) subsidiary Bitbuy Technologies Inc. announced its partnership with a leading Canadian investment bank and IIROC member and Alpaca Securities LLC, which will enable Bitbuy to offer fractional trading and investing in hundreds of U.S. stocks, exchange-listed securities, and ETFs inside the framework of its current Bitbuy product.
Bitbuy will use Alpaca’s Broker API to enable real-time fractional trading and quick settlement to its consumers. Bitbuy will offer stock trading in collaboration with Alpaca, a FINRA member broker-dealer, and a leading Canadian investment bank and an IIROC member. All customer accounts and trades will be routed, executed, cleared, and custodyed by a leading Canadian investment bank and IIROC member. The product is expected to go operational in the first quarter of 2023, with an official launch date to be announced prior.
WonderFi CEO Ben Samaroo commented: “Providing seamless access to stock trading makes Bitbuy the first in Canada to offer a full suite of crypto trading as well as fractional trading of equities with real-time settlement. This is in furtherance of our goal of making user’s lives easier and bringing key asset classes within our easy to use, regulated platforms.”
Crypto Asset Prices Decline Impacted Crypto Stocks
In August 2022, Bit Digital Inc. (NASDAQ:BTBT) earned 145.3 bitcoins, an increase of 2% from the previous month. The company earned 0 ETH in August 2022, compared to 0.5 in the month ending July 31, 2022. Cash holdings of BTC and ETH were 919.2 and 3,684.0 with a fair market value of approximately $18.4 million and $5.7 million, respectively, as of August 31, 2022. The company had 38,594 Bitcoin miners and 731 Ethereum miners as of August 31, 2022, with an estimated maximum total hash rate of 2.7 Exahash (EH/s) and 0.3 Terahash (TH/s), respectively. During the month, Bit Digital purchased 561 M30 miners and sold 103 M21 miners. Bitcoin mining revenue was $6.5 million for the second quarter of 2022, while Ethereum mining revenue was $0.3 million. Non-GAAP net income was $0.1 million, or $0.00 in earnings per share.
Bitfarms Ltd. (TSX:BITF) (NASDAQ:BITF) hashrate surpassed 4 exahash per second (EH/s) as production began at the first of two 50-megawatt (MW) warehouses under construction in Argentina. The initial start-up adds 10 MW to the entire corporate capacity of 176 MW. The Company intends to light up additional 10 MW increments throughout the remainder of Q3 2022 and during Q4 2022, with the goal of completing the complete 50 MW by December 31, 2022. Bitfarms mined 1,257 BTC in Q2 2021 and Q1 2022 at an average direct production cost of $9,000 and $9,900, respectively. 534 new Bitcoins were created in August 2022, an increase of 6.8% from July 2022 and 50% from August 2021. On average, 17.2 BTC were mined per day in August, which works out to about $349,160 per day and $10.84 million for the entire month, assuming a BTC price of $20,300 on August 31, 2022.
In August 2022, Hive Blockchain Technologies (NASDAQ:HIVE) (TSXV:HIVE) produced 290.4 BTC and 3,010 ETH. At the start of August, the company had 2.23 Exahash of Bitcoin mining capacity, with an average hashrate of 2.07 Exahash of Bitcoin mining capacity during August. It had 6.49 Terahash of Ethereum mining capacity at the end of August, with an average hashrate of 6.19 Terahash of Ethereum mining capacity during August. In August, Hive produced an average of 16.7 Bitcoin Equivalent per day. On September 2, Hive announced that it has entered into a market offering agreement (the “ATM Agreement”) with H.C. Wainwright & Co. (the “Agent”). Under the ATM Agreement, the Company and the Agent will operate an “in-the-market” share issue program, according to which the Agent may issue and sell from time to time such number of ordinary shares of the Company with an aggregate offering price of up to US$100 million. Hive intends to use the net proceeds of the ATM share program, if any, primarily to support the growth and development of the Company’s existing mining operations and for working capital and general corporate purposes.
Coinbase Global, Inc. (NASDAQ:COIN) said in a letter to shareholders that the decrease in cryptocurrency asset prices had a significant influence on its second quarter financial results, which were in accordance with the outlook given in May. Due to fewer transactions, net revenue was $803 million, down 31% from Q1’s total. Operating costs were $1.9 billion, up 8% from the first quarter. Impairment costs on non-cash items significantly negatively impacted net loss, which was $1.1 billion. The net loss would have been $647 million absent non-cash impairment costs. The adjusted EBITDA was $151 million in the red. Coinbase served 9.0 million MTUs in the second quarter, a reduction of 0.2 million or 2% from Q1 despite the ongoing market deterioration. The total trading volume decreased to $217 billion from the first quarter, a 30% decrease.
WonderFi recently entered into a definitive agreement to acquire all the issued and outstanding shares of Blockchain Foundry Inc., a North American blockchain development company.
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