Category: Cryptocurrency

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Bitcoin miner Core Scientific (NASDAQ:CORZ) has rejected an all-cash buyout offer from Nvidia-backed cloud provider CoreWeave, stating that the offer undervalues the company.

“The board concluded that the CoreWeave proposal significantly undervalues the company and is not in the best interests of the company and its shareholders,” Core Scientific announced in a statement.

Core Scientific received the unsolicited, non-binding proposal from CoreWeave on June 3. The offer aimed to acquire all of Core Scientific’s outstanding shares on a fully diluted basis for $1.02 billion, or $5.75 per share in cash.

Despite the rejection, the two companies have signed a series of 12-year contracts on the same day. These agreements include a deal where Core Scientific will provide CoreWeave with approximately 200 MW of infrastructure to support its high-performance computing services.

Cryptocurrency mining requires substantial electricity, leading larger companies and AI technology firms to target these miners to consolidate power supplies for their energy-intensive operations.

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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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Core Scientific (NASDAQ:CORZ), a Bitcoin mining company, saw its shares surge up to 40% in pre-market trading following a significant AI deal with cloud computing firm CoreWeave and a reported buyout offer from the same company.

CoreWeave has reportedly made an all-cash offer to purchase Core Scientific, implying a 55% premium over the miner’s three-month average weighted share price as of May 31, according to Bloomberg, which cited an anonymous source. This offer values the Austin, Texas-based miner at over $1 billion, considering its 178 million outstanding shares. Core Scientific recently emerged from bankruptcy after suffering during a harsh crypto winter.

Neither CoreWeave nor Core Scientific immediately responded to requests for comments on the matter.

In addition to the buyout offer, CoreWeave signed a 12-year deal with Core Scientific to host AI-related services, committing around $300 million in capital investments with options for capacity expansion.

This development follows a trend of increasing mergers and acquisitions in the mining sector. Notably, Riot Platforms (NASDAQ:RIOT) recently made a hostile bid to acquire peer Bitfarms (NASDAQ:BITF).

CoreWeave raised $1.1 billion in new funding in May, with investors including Coatue Management and Magnetar Capital.

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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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Digital assets firm Galaxy Digital has granted a multimillion-dollar loan to Yat Siu, the co-founder of Animoca Brands, using a unique collateral combination: a tokenized 1708 Stradivarius violin and its corresponding non-fungible token.

Valued at over $9 million, the violin boasts a storied history, including ownership by Russian Empress Catherine the Great. This deal could set a precedent for the tokenization of physical assets, potentially revolutionizing collateralization and opening new investment opportunities for high-value items.

Galaxy Digital’s decision to tokenize the Stradivarius violin, crafted by the esteemed Stradivari family, merges the art world with blockchain technology. The physical violin will be securely stored in Hong Kong, while its digital counterpart facilitates the loan process.

Tokenization involves converting a tangible asset into a digital token tradable on blockchain platforms, offering a novel approach to asset management. Several asset managers are optimistic about the future of tokenization.

A report by 21.co late last year projected that the tokenization market could scale to $3.5 trillion in a bear-case scenario, or up to $10 trillion in a bull case.

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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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Robinhood (NASDAQ:HOOD) imposed buying restrictions on GameStop (NYSE:GME) shares late Sunday after the meme stock’s value surged following speculation that Keith Gill, known as “Roaring Kitty,” might hold a substantial position in the company.

The brokerage stated that Blue Ocean ATS, the platform facilitating overnight trades, would only accept orders within 20% above or below a reference price of $22.99. Thus, orders to buy GME above $27.59 or sell below $18.39 during the night would likely be rejected. Despite this, some Robinhood users reported being completely blocked from purchasing GME overnight.

Robinhood did not respond to Cryptonews’ request for comment by press time.

The trading restriction followed a Reddit post by Keith Gill, aka “Roaring Kitty” on YouTube. The post, Gill’s first since April 21, indicated he bought 5 million GME shares for $115.7 million and invested $65.7 million in call options, betting that GME would reach at least $20 per share by June 21. The screenshot also showed he had accrued over $9.3 million in profits from his GME holdings but sustained a loss of nearly $2.5 million on his call options.

In Robinhood’s overnight markets, GME surged nearly 20% in 20 minutes to reach $27.58 following Gill’s Reddit post. GameStop closed at $23.14 on Friday, May 31, marking a 38.8% increase in shares for the year, seemingly influenced by Gill’s return.

On the same day as his Reddit post, Gill shared a green UNO reverse card on X, adding to a series of cryptic posts and memes since his return in May. The latest post garnered nearly 50,000 likes by early Monday. Gill’s reemergence three weeks ago sparked a significant surge in GameStop shares, doubling their value in May alone. Additionally, Ethereum-based meme coins, including one named GME, showed renewed optimism with the reappearance of Roaring Kitty guiding the next bullish phase.

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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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