The Intersection: Crypto and Wall Street This Week - InvestingChannel

The Intersection: 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. NVIDIA COMMENTS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. In an earnings call on Thursday, Nvidia reported that revenue from crypto-related products fell to $70M in the third quarter from $150M in the prior period. “Crypto is small for us but not zero, and I believe that crypto will be around for some time,” Nvidia CEO Jensen Huang said. 2. DEVELOPERS SUSPEND FORK PLANS: On Wednesday, a coalition of developers suspended plans for the “Segwit2x” software upgrade that could have split the bitcoin currency in two as the upgrade could “divide the community,” Reuters reports. SegWit2x, which had aimed to improve the bitcoin network’s transaction capacity, received significant support when announced but many developers withdrew that support over the last several months. “Our goal has always been a smooth upgrade for bitcoin,” lead developer of the upgrade team and BitGo CEO Mike Belshe said. “Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.” 3. GOLDMAN SEES CONSOLIDATION AT $8,000, THEN HIGHER: In a note to investors on Sunday, Goldman Sachs vice president Sheba Jafari predicted consolidation will occur when bitcoin reaches $8,000. “The market has shown evidence of an impulsive rally since breaking above $6,044. Next in focus $7,941. Might consolidate there before continuing higher,” she wrote. While Goldman warned against traders expecting a rapid increase past $8,000, Jafari referenced the Elliott Wave Theory saying, “Given that this is just a third of five waves up, the implications are that bitcoin has potential to run further over time.” 4. CME SEES ASSET CLASS: On Tuesday, CME Group (CME) chairman emeritus Leo Melamed said bitcoin is likely to become a new asset class, like gold or stocks, to be traded by investors and regulated, Reuters reported. The remarks come after CME announced it would launch bitcoin futures contracts by year-end allowing investors to short-sell the cryptocurrency and enabling two-way bets, which Melamed believes will attract major institutional investors. “That’s a very important step for bitcoin’s history… We will regulate, make bitcoin not wild, nor wilder. We’ll tame it into a regular type instrument of trade with rules,” he said. 5. CBOE SEES BITCOIN ETFS: In an earnings call on Tuesday, CBOE Global Markets (CBOE) president Chris Concannon said, “With regulated futures of a certain asset class like a bitcoin, you do have an opportunity to introduce ETFs and over time we do envision ETFs coming to market once the regulated futures market is dealt and liquid.” The Chicago-based exchange operator is competing with CME to launch bitcoin futures, announcing in August it aimed to offer the contracts by year-end or early next year. CBOE’s CEO and chairman Ed Tilly said it’s “not surprising CME recognizes the same benefits of offering a transparent market.” 6. BITCOIN BEARS: “Dr. Doom” economist Nouriel Roubini, who predicted the 2008 financial crisis, said he believes bitcoin is a bubble, Business Insider reported on Wednesday. “In my opinion, there is a gigantic speculative bubble related to the bitcoin,” he said. “Because this is neither a serious method of payment nor a good way to store capital. The bitcoin feeds on itself. There are no fundamental reasons for its price to reach such levels. What’s more – it is also used by criminals, for their shady business. I think that more and more countries will start to make cryptocurrency exchanges illegal like China did. New regulations will be adopted. So, this will find its end.” In addition, Societe Generale (SCGLY) CEO Frederic Oudea said on Tuesday that while he supports distributed ledger technology, cryptocurrencies hold too much risk due to their anonymity, CNBC reports. Oudea said, “I can’t see a future of this when I see the attention played by all governments and regulators on anti-money laundering, on anti-tax evasion, on anti-terrorism financing. The anonymity of the transaction is a problem I think which would put pressure on bitcoin.” PRICE ACTION: As of time of writing, bitcoin fell about 5.4% this week, or $395, to $6,896 in U.S. dollars according to CoinDesk. Meanwhile, AMD shares rose 1.5% to $11.29 this week and Nvidia was up 4.5% on a weekly basis to $218.42. Bitcoin Investment Trust (GBTC) dropped 5.5% this week to $906. WANT BITCOIN NEWS ALERTS?: To receive alerts on stories relating to bitcoin and other cryptocurrencies, Fly subscribers can enter “Bitcoin” into the “Add symbols” box of their portfolios.

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