Bitcoin drops to $67,000 level as crypto investors await Fed’s decision on rates: CNBC Crypto World

Bitcoin drops to $67,000 level as crypto investors await Fed’s decision on rates: CNBC Crypto World

today Bitcoin drops to the $66,000 level Ripple launches a new fund to boost blockchain innovation in Japan in South Korea and Elliot Chun of architect Partners explains why the Robin Hood bitstamp deal is good for the crypto industry welcome to cnbc’s crypto world I’m Talia Kaplan major cryptocurrencies in the red this morning as all eyes are on the federal reserve’s next rate decision as of noon Eastern Bitcoin dropped 5.5% to the $66,000 level ether sank nearly 7% to the $3,400 level and polygon’s madic token fell more than 45% just like stock market investors crypto investors are watching the fed and its decision on rates tomorrow afternoon it’s widely expected that the FED will keep rates unchanged but while street is waiting for more clues on whether the Central Bank appears likely to cut rates in the upcoming months okay let’s talk about the top stories the Securities and Exchange Commission is now considering a spot ether ETF from pro shares that’s according to this filing yesterday showing that pro shares is entering the spot ether ETF race nearly three weeks after the SEC approved a rule change that would pave the way for ETFs that Buy and Hold ether specifically on May 23rd the SEC approved venex 19 before filing for a spot ether ETF along with seven others including black rocks and fidelities but the SEC still needs to Greenlight each etf’s S1 filing to begin trading now the development came less than 6 months after the SEC approved spot Bitcoin ETFs which have proven to be a big success for the industry pro shares does not currently offer a spot Bitcoin ETF in the US but the asset manager offers ETFs that track Bitcoin and ether Futures we’ve reached out to pro shares about the spot ether ETF development and a spokesperson told us the asset manager declines to comment beyond the filing next today Ripple said it launched a Japan and Korea fund with the goal of driving Innovation on The xrp Ledger in the two markets that ledger is an open- Source public blockchain built for corporations the move also signifies the blockchain firm’s effort to expand its presence in Asia Pacific one of its fastest growing regions in a statement Ripple’s vice president of strategic initiative said the launch of the fund is a quote Testament to Ripple’s strong belief in the potential of Japan and Korea as Capal Regional hubs for blockchain Innovation Ripple said the funds will go toward supporting corporate Partnerships developer grants startup Investments and Community growth the expansion comes as the crypto industry faces a hostile regulatory environment in the US according to Ripple CEO Brad garlinghouse last the Federal Trade Commission is warning consumers about romance scams involving crypto the warning issued yesterday notes that some victims have lost millions of dollars from these scams the FTC says typically scam scammer send random social media messages to their victims and over time builds enough trust to have the victims send money under the impression that the funds would be used for investing purposes in the warning the FTC stressed that if someone you meet online says they want to help you invest in cryptocurrency it’s an investment scam now the notice says that crypto is one way the scammers try to get money from victims but that they might also ask for gift cards or payments via apps like zel and PayPal this is the second time the commission warned of crypto related scams this month usually stemming from random messages from unknown numbers all right for our main story architect Partners an m&a and financing adviser for crypto companies recently released a note on m&a activity for crypto public companies that includes last week’s announcement from Robin Hood that the trading platform has agreed to buy the crypto exchange bit stamp for around $200 million in cash I spoke with Elliot Chan of architect Partners about his latest notes and why he thinks the acquisition is a sign for the crypto industry your latest note calls the Robin Hood bitstamp deal an important marker of the current market and says Robin Hood’s acquisition of bitstamp shows valuations have quote right sized again why do you think valuations have come back to earth well a couple of reasons one just from a macro perspective all valuations have become more reasonable I think in the 2020 2021 time frame we were living in uh kind of kind of a euphoric environment uh particularly for valuation uh there were a number of reasons why you saw rounds go higher uh you had a lot of Market participants uh that wanted to get involved in the crypto industry uh putting capital in when maybe they uh weren’t 100% focused on it so investing discipline may have been uh could have been a little bit better um and so that led to a series of valuations that were we’ll call it inflated now that we get to look back and with the Robin Hood acquisition of bit stamp it really helps us reset the market to what we are finding today for market clearing prices so overall why do you think Robin Hood’s acquisition of bit stamp is a good sign for the crypto industry yeah one of the most important reasons is what we call Bridge transactions that’s when a traditional company acquires a crypto native business it’s really important for our industry when I say our industry crypto it’s important for us to have adoption from uh others than just the crypto natives we’re not going to have too much success of with as an industry if we are only playing with ourselves and so with Robin Hood we have a traditional publicly traded company although they are skewing towards more of the Innovation side that is acquiring a bid stamp which has long been a 10 plus year TR track record has a really good reputation of following the regulatory uh landscape and Frameworks they have one of the more robust regulatory licensing regimes and and Robin Hood is now gets the opportunity to grow their crypto business which in q1 was reported to be about 20% of their revenues uh now they get to apply that Playbook from a Global Perspective and the acquisition was announced last week about a month after Robin Hood disclosed that the SEC had sent it a Wells notice and warned that upon completion of an investigation the trading platform could be charged over its crypto operations your latest note also emphasized that the deal with bitstamp would expand Robin Hood’s Global reach as you just noted and would ensure its Global participation in crypto trading at a time when its crypto division is under scrutiny by the SEC do you think Robin Hood’s move to acquire an international crypto exchange was strategic especially given the timing just weeks after the trading platform got that Wells notice yeah it’s fascinating the way Robin Hood’s last 31 days has played out theyve got the wells notice shortly after they announced a staking product in Europe uh which we all know staking has been controversial from a regulatory perspective here in the US um then they uh they announced record revenues for crypto in in the US and then they announced the acquisition of of bits stamp to us uh this is behavior of a company that may not be too intimidated by the SEC and the wells notice that they received uh we hope that this is in line with the improving us regulatory political environment we’ve always lived in a hostile environment if our industry gets anywhere close to to neutral or dare I say even positive I think it’ll be a very uh transformative Tailwind to how our industry operates so uh there have been many on your show that have been talking about uh the SEC and and the current stance Robin Hood’s move could be an indication that publicly traded companies here in the US have confidence that crypto as a business uh has has strong prospects going forward particularly from a regulatory environment interesting now architect Partners is is an m&a and financing adviser for crypto companies and you also put out a note last week providing a snapshot on crypto public companies in it you points out that the last two weeks saw quote meaningful m&a activity for crypto public companies according to architect Partners crypto m&a activity is experiencing a rapidly increasing Pace over the last two years there was 1.2 billion dollars in total announced consideration in the last two weeks alone you know note that there was $2.3 billion in total announced consideration and we talked about the Robin Hood bitstamp deal but what other recent potential deals in the crypto space have you been paying attention to we’ve seen a couple involving Bitcoin miners which were rejected what does that signal to you yeah well the signal you said it best I mean talk about total consideration paid we talked about valuation earlier um we have not been in this market environment where we’ve been uh seeing this type of activity for for two years for 24 months uh that that’s a long time and and when you think about the last four or the last two weeks with four m&a transactions that have been announced um it gets us really excited and it gets us excited one uh there are a few strategic themes at play we talked about Robin Hood acquiring bitstamp Bridge transactions a second theme Here is crypto businesses bolstering their comp comprehensive Services um and so for bit deer they had acquired uh an Asic chip designer called Desi we Miner that’s an example of a crypto business really trying to become vertically integrated in the value proposition that they provide to the market um a third theme playing out is building a category leader and when you look at Riot’s proposed acquisition of bit Farms the whole thesis is how can that combined entity become the largest publicly traded Bitcoin miner that’s a significant statement and that’s attractive for a number of different reasons particularly post forth having and then finally uh the last theme it’s a little bit Buzzy but it is the AI and crypto theme uh where core weave which is an AI Focus platform privately held proposed a combination with core scientific and so a lot of groups are saying well how can Ai and crypto play together this is uh in motion and again they they rejected that one but it is a real sign of m&a activity for particular themes playing out and one thing to note that that core weave and core scientific the consideration announced was 1 billion and in December of 2022 core scientific was uh going through a bankruptcy process so a really remarkable turn around for that for that organization um and a good indicator of the growth of Bitcoin mining particularly in publicly traded companies now Chen also provided his outlook for crypto m&a activity and discussed whether the momentum we have been seeing over the past two weeks will continue you can check out the full interview over at cnbc.com cryptoworld okay that’s all for today but we’ll be back again tomorrow and we’ll see you then

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Elliot Chun with Architect Partners, an M&A and financing advisor for crypto companies, discusses the ‘rapidly increasing pace’ of crypto M&A activity.

Chapters:
00:00 – CNBC Crypto World, June 11, 2024
0:24 – Bitcoin drops
1:01 – The headlines
4:03 – Elliot Chun of Architect Partners

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Bitcoin drops to $67,000 level as crypto investors await Fed’s decision on rates: CNBC Crypto World