Author: Faith Yakubu

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Bitfarms Ltd., a Bitcoin mining company, is adopting a “poison pill” shareholder rights plan in response to an unsolicited takeover offer from larger rival Riot Platforms Inc.

A poison pill strategy is designed to deter corporate takeovers by making the acquisition too costly for the acquiring company. Under the terms of Bitfarms’ plan, if an entity acquires an equity stake exceeding 15% by September 10, Bitfarms will issue new stock to existing shareholders, thereby diluting the stake of the entity pursuing the hostile takeover, as stated in a Monday announcement by Bitfarms.

Riot Platforms made an unsolicited offer of $950 million in May to acquire Bitfarms Ltd. following the latter’s rejection of Riot’s takeover bid the previous month. Bitfarms’ board deemed the proposal as significantly undervaluing the company and its growth prospects.

In April, Riot privately proposed $2.30 per share in cash and stock for Bitfarms, which represented a 20% premium over the company’s pre-offer share price.

According to Bitfarms, Riot currently holds 47,830,440 shares, constituting approximately 12% of the issued and outstanding stock. A spokesperson for Riot did not respond immediately to requests for comment.

On Monday, Bitfarms shares declined by 4.2% to $2.30, while Riot’s stock increased by 1.8% to $9.90. Year-to-date, both stocks have experienced declines of around 21% and 36%, respectively.

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Bitdeer, a prominent Bitcoin (BTC) miner, has announced its acquisition of Desiweminer, a designer of chips for ASIC mining machines, in a significant all-stock transaction valued at $140 million. This strategic move aims to bolster Bitdeer’s capabilities in ASIC chip design and enhance its position in the competitive cryptocurrency mining industry.

According to the announcement made on Thursday, Bitdeer will acquire all outstanding shares of Desiweminer for a consideration of 20 million Class A ordinary BTDR shares. The transaction is subject to customary closing conditions, signaling the culmination of negotiations between the two entities.

As part of the acquisition, the Desiweminer team will integrate with Bitdeer’s ASIC design team based in Singapore. This collaboration is expected to lead to the development of innovative products that leverage the combined expertise and technologies of both companies. These new offerings are set for immediate release, highlighting the swift integration efforts underway.

Bitdeer’s acquisition of Desiweminer comes shortly after receiving a substantial investment of $150 million from stablecoin company Tether at the end of last month. This injection of funds underscores Bitdeer’s commitment to expanding its operations and investing in strategic partnerships to drive growth in the evolving cryptocurrency market landscape.

Following the announcement, BTDR shares experienced a modest uptick, rising 0.54% to $7.05 in pre-market trading. This response indicates initial market confidence in the potential synergies and value creation expected from the acquisition deal.

Overall, Bitdeer’s acquisition of Desiweminer represents a strategic maneuver to strengthen its position in the competitive ASIC chip design market and reinforce its presence in the rapidly evolving cryptocurrency mining sector.

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Binance, the world’s largest cryptocurrency exchange, has resumed Mastercard payments for purchasing cryptocurrencies, marking a significant development in the crypto payment landscape. While Mastercard withdrawal services are not yet available, they are expected to be reinstated at a later date.

This move comes after Mastercard suspended crypto-related services on Binance in August 2023. The decision coincided with Binance facing legal challenges in the United States, including regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC).

After conducting a thorough review of Binance’s controls and processes, Mastercard decided to reinstate Binance-related purchases on its network. A spokesperson from Binance highlighted the extensive measures implemented by the exchange and expressed optimism about adding support for additional products, such as withdrawals, in the future.

Mastercard confirmed the restoration of service but emphasized that ongoing reviews would determine the continuation of Binance-related transactions on its network. This cautious approach underscores the importance of maintaining robust compliance measures in the cryptocurrency ecosystem.

Both Visa and Mastercard have shown enthusiasm for the cryptocurrency sector, venturing into Web3 and self-custody wallet solutions. The reinstatement of Mastercard payments on Binance reflects a broader trend of traditional financial institutions embracing the opportunities presented by cryptocurrencies and blockchain technology.

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Bitcoin has extended its winning streak to five consecutive sessions, edging closer to the $71,000 mark amidst growing expectations of Federal Reserve interest-rate cuts later this year.

The cryptocurrency’s sustained upward momentum marks its longest series of daily gains in three months, with Bitcoin trading at $70,785 as of 8:25 a.m. Wednesday in New York, just 4% below its all-time high of $73,798 reached in mid-March.

Investors are increasingly factoring in the likelihood of a Fed rate cut as early as November, spurred by indications of moderating US inflation and a softer job market. This shift in market sentiment has led to a notable decline in Treasury yields over the past two days, easing financial conditions and bolstering speculative assets like cryptocurrencies.

According to Tom Couture, vice president of digital-asset strategy at Fundstrat Global Advisors, the positive response from crypto assets can be attributed to the decrease in interest rates.

The rally in cryptocurrencies is not limited to Bitcoin alone, with other top coins such as BNB and Solana experiencing gains over the past 24 hours. BNB, in particular, has surpassed its previous all-time high from 2021, reflecting improved sentiment towards the Binance ecosystem despite regulatory challenges earlier in the year.

While Bitcoin has faced resistance in maintaining its position above $70,000, optimism persists due to increased inflows into dedicated US exchange-traded funds and ongoing developments towards a regulatory framework for cryptocurrencies in Washington.

Elsewhere, in Japan, crypto exchange DMM Bitcoin announced plans to raise funds to compensate customers affected by a recent hack, highlighting ongoing challenges in the industry.

Amidst these developments, Bitcoin’s correlation with the Nasdaq 100 Index of US technology stocks has reached its highest level since early 2023, suggesting a potential alignment between equity market gains and further appreciation in the cryptocurrency market.

Michael Novogratz, founder and CEO of Galaxy Digital, expressed optimism about Bitcoin’s future, predicting a record high of $100,000 or higher by the end of the year, buoyed by a more favorable regulatory environment in the United States. This positive sentiment reflects a shift from the uncertainties and scandals that plagued the cryptocurrency market in previous years.

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Kerrisdale Capital Management LLC, known for its short-selling strategies, has set its sights on Riot Blockchain Inc., criticizing its business model as flawed in the challenging landscape of Bitcoin mining. According to Kerrisdale, investing in Bitcoin directly is a more viable option for cryptocurrency enthusiasts than purchasing miner stocks.

The report released by Kerrisdale founder Sahm Adrangi highlighted Riot’s shareholder dilution due to the company’s stock-selling practices. Additionally, Adrangi’s letters to Texas government officials raised concerns about Riot’s energy usage practices and its impact on the state’s energy laws.

Shares of Riot, based in Castle Rock, Colorado, experienced a decline of up to 8.9% following the publication of Kerrisdale’s report. The company has yet to respond to requests for comment from Bloomberg News.

Adrangi emphasized that Bitcoin mining is a highly competitive commodity business with minimal barriers to entry, particularly as new mining projects emerge globally. He argued that the current valuations of Bitcoin miners do not justify investment, especially considering the availability of low-fee exchange-traded funds for investors seeking exposure to Bitcoin.

This isn’t the first time Kerrisdale has targeted companies with exposure to cryptocurrencies. In March, the firm recommended a pair trade involving shorting MicroStrategy Inc. while taking a long Bitcoin position, a strategy that has proven successful thus far.

However, there are potential risks associated with shorting Bitcoin miners, as demonstrated by Core Scientific Inc.’s recent surge in stock price following news of long-term contracts and acquisition offers. Despite the challenges highlighted by Kerrisdale, the dynamic nature of the cryptocurrency market leaves room for miners to adapt their business models and attract investors or strategic buyers.

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In a notable development, global Bitcoin funds observed substantial net inflows amounting to $148 million last week, as reported by CoinShares. This surge in investments contrasts sharply with short Bitcoin products, which experienced outflows totaling $3.5 million. Additionally, Ethereum funds attracted $33.5 million, marking the second consecutive week of positive inflows following a prolonged period of minimal activity.

CoinShares highlighted this trend as indicative of a shift in investor sentiment towards Ethereum. Notably, Ethereum had endured 10 weeks of outflows totaling $200 million. The renewed interest in Ethereum has also positively impacted Solana, with $5.8 million in inflows recorded amid speculation about potential Solana ETFs and other altcoin products.

While the bulk of these inflows originated from the United States, significant crypto investments were also reported in Canada and Switzerland. Ethereum continues to enjoy strong institutional support in these regions, alongside Bitcoin.

Experts anticipate the debut of Ethereum ETFs as early as July, with projections suggesting they could capture approximately 20% of the demand witnessed by Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas commented last week that securing 20% of Bitcoin ETF demand would represent an exceptionally successful launch by typical ETF standards.

The surge in inflows into Bitcoin and Ethereum funds underscores the growing investor interest in cryptocurrencies, particularly in anticipation of new investment opportunities such as ETH spot ETFs. As the cryptocurrency market continues to evolve, the introduction of Ethereum ETFs could further enhance accessibility and diversification options for investors, potentially driving further growth and adoption in the crypto space.

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In response to the growing demand for scalable and cost-effective Bitcoin payments, the team behind the Bitcoin layer-2 protocol Ark has established a new company called Ark Labs. This innovative firm aims to develop a faster and more efficient payment system on the Bitcoin blockchain, offering a compelling alternative to the Lightning Network.

Led by creator Burak Keceli, Ark Labs seeks to address the limitations of existing solutions while building upon the foundation laid by Lightning Network. The primary focus of Ark Labs is to provide scalable and low-cost Bitcoin payments, catering to the needs of users worldwide.

The core objectives of Ark Labs include the development of an open implementation of the Ark Protocol and the creation of user-friendly services. The company plans to introduce its first service later this year, aiming to revolutionize the landscape of Bitcoin payments.

Unlike the Lightning Network, which faces challenges such as the “inbound liquidity” problem, Ark Protocol offers a novel approach to off-chain payments. By leveraging service providers who offer 24-hour liquidity services for a fee, Ark eliminates the need for users to commit funds upfront to establish liquidity.

Ark’s off-chain payments utilize a unique unspent transaction output (UTXO) model, employing virtual unspent transaction outputs (VTXOs) to facilitate seamless and secure transactions. This model enables unidirectional, one-time-only payments, enhancing the efficiency and usability of Bitcoin payments.

While Keceli has transitioned to other endeavors, the protocol and Ark Labs remain committed to advancing the goals of improving Bitcoin’s payment infrastructure. With its innovative approach and ambitious objectives, Ark Labs emerges as a formidable contender in the realm of Bitcoin payments, poised to reshape the future of digital transactions.

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In May, global non-fungible token (NFT) sales witnessed a notable decline, totaling $604 million, marking the lowest monthly performance since October and the first month of the year with sales below $1 billion.

Ethereum, renowned as the leading blockchain for NFT sales, experienced a dip in sales, recording $164 million in May, the lowest since September. The network also saw a decrease in unique buyers, with only 56,914 recorded, the lowest count since June 2021.

Similarly, the Bitcoin network observed a downturn in NFT sales, with monthly sales totaling $160 million, the lowest since October. The network also reported a decline in both buyers and sellers, marking the lowest count for the year.

Contrary to the overall trend, Solana showcased resilience in NFT activity. Despite the sales slump in major blockchains, Solana recorded $93 million in monthly sales, the first time it fell below $100 million since last November. Solana set new records for monthly unique buyers and sellers, with 346,229 and 594,555 addresses, respectively.

However, despite the heightened activity, Solana witnessed a decline in the average NFT price, with an average monthly sales value of $37.8, the lowest this year. Despite the challenges faced by the NFT market in May, Solana’s performance highlights its growing prominence in the NFT space.

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Coinbase’s recent $25 million donation to political action committees (PACs) has propelled the crypto industry’s campaign fund to approximately $161 million, making it one of the most significant players in U.S. campaign finance.

This substantial cash injection positions the crypto industry as a formidable force in influencing the political landscape, with the potential to allocate over $300,000 for each congressional seat up for grabs in the upcoming elections.

Coinbase joins Ripple and Andreessen Horowitz (a16z) in contributing to the Fairshake PAC and its affiliate PACs, which aim to support congressional candidates with pro-crypto stances. By targeting state primaries and backing candidates aligned with their mission, these committees wield considerable influence, often through independent ad campaigns.

The crypto industry’s involvement in politics underscores its recognition of the pivotal role of U.S. regulations in shaping global acceptance of digital assets. As lawmakers navigate the complexities of crypto legislation, the next congressional session could usher in regulations tailored to digital assets, potentially driving broader adoption and investor confidence.

The influx of funds from Coinbase and other industry giants highlights the growing influence of super PACs, enabling corporations to exert significant sway over elections. With a war chest rivaling that of major political parties, the crypto industry’s campaign finance efforts signify a strategic investment in shaping regulatory frameworks conducive to its growth.

However, transparency regarding Fairshake’s management and strategies remains limited, as key stakeholders refrain from disclosing operational details. Despite criticisms suggesting undue influence, proponents argue that such contributions are commonplace across various industries, aimed at supporting candidates aligned with their interests.

As the crypto industry emerges as a major player in campaign finance, its collective contributions could rival those of established political entities. By leveraging its financial prowess, the industry seeks to advance its agenda and foster an environment conducive to innovation and growth in the digital assets space.

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Bitcoin’s price has maintained a remarkably tight trading range near $68,000 following the U.S. Memorial Day holiday, with a slight dip approaching the week’s low in Friday’s morning trading hours.

At 11:45 am ET, bitcoin was priced at $67,300, down 1% over the past 24 hours and 2% from its peak two hours earlier at $69,000. The broader CoinDesk 20 also saw a 1.1% decline over the last day.

Despite this, May has been a positive month for Bitcoin, with an 11% increase since starting around $60,000. However, this growth pales in comparison to the CoinDesk 20’s 20% surge, largely driven by a 31% rise in the price of ether following renewed optimism for a spot ETF.

The recent subdued activity in Bitcoin coincides with struggles in other risk assets, particularly U.S. stocks, amid concerns about stagflation. Economic indicators have shown mixed signals, with the bond market rallying on news of softening economic conditions.

Looking ahead to June, upcoming U.S. economic reports could provide clarity and potentially act as a catalyst for Bitcoin’s price action. If economic data suggests weakening conditions and lower interest rates, bitcoin may attempt to breach its all-time high above $73,000 set in March. Conversely, strong economic data could lead to a retest of May’s lows.

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