Cryptocurrency News Update: COIN stock is rising ahead of its earnings report on news that Coinbase (COIN) and BlackRock (BLK) are partnering on a cryptocurrency platform for institutional investors. Block (SQ) ‘s quarterly earnings and sales have fallen over the year, partly due to a drop in Bitcoin revenue. Meta (META) expands its NFT footprint, sending FLOW flying. Robinhood (HOOD) ‘s crypto subsidiary was slapped with a $30 million penalty for anti-money laundering and cybersecurity failures. Hackers feel sorry for stealing $200 million from crypto firm Nomad and have started returning funds.
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Cryptocurrency News: Price Action
Bitcoin is over $24,000 after rebounding 16.8% in July, its best monthly performance since October 2021. Ethereum is at a two-month high after climbing near $1,800 ahead of its anticipated merge to a proof-of-stake blockchain. Ethereum is in the middle of transitioning its Goerli network to PoS, which is taking place Aug. 6-12. It’s the final test network before the official merge that’s set for September. July also marked the best month for digital asset funds so far this year. Digital asset fund inflows totaled $474 million for the month, nearly offsetting the $481 million of outflows from June. Roughly $490 million of fund money has been invested in digital asset products so far this year.
Most Popular Cryptocurrencies
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Digital asset investments are extremely volatile. While cryptocurrency’s fundamentals and technical indicators may differ, investors should focus on the same key objectives. First, stay protected by learning when it’s time to sell, cut losses or capture profits. Second, prepare to profit if the cryptocurrency starts to rebound.
Despite their original promise, cryptocurrencies haven’t acted as hedges against inflation. Instead, they’ve trended with the broader indexes. Read The Big Picture and Market Pulse to track daily market trends.
View IBD’s Best Cryptocurrencies And Crypto Stocks To Buy And Watch page to help navigate the world of digital asset investments.
Want a deeper dive into crypto? Check out the What Is Cryptocurrency? explainer page.
Coinbase Teams Up With BlackRock
Cryptocurrency exchange Coinbase is partnering with the world’s largest asset manager, BlackRock, on an institutional cryptocurrency investment platform. Announced on Thursday, Coinbase Prime will provide crypto trading, custody, brokerage, financing and staking capabilities to institutional clients of Aladdin, BlackRock’s investment management platform.
COIN stock jumped more than 10% after the news broke and is up nearly 50% over the past week ahead of its earnings report on Aug. 9. COIN tumbled more than 60% so far this year along with the broader cryptocurrency market crashes.
For the quarter, Wall Street expects Coinbase to report an adjusted loss of 72 cents per share vs. adjusted earnings of $7.42 per share last year. Forecasts see revenue plummeting to $874 million from $2.23 billion.
Block’s Bitcoin Losses
Block, the parent company of Square and Cash App, beat predictions for its second-quarter results, despite earnings falling 72% and revenue sliding 6%. Cash App’s Bitcoin revenue dropped 34% for the period to $1.79 billion, driven by a decline in Bitcoin prices, consumer demand and broader uncertainty around crypto assets, Block said.
The company’s gross profit from Bitcoin was $41 million, down 24% over the year. Block also recorded a $36 million Bitcoin impairment loss, improving slightly from the $45 million impairment last year.
Robinhood Crypto Fine
In other cryptocurrency news, Robinhood was fined $30 million by the New York Department of Financial Services earlier this week for its crypto subsidiary’s “significant” anti-money laundering, cybersecurity and consumer protection violations, as well as lying about compliance status.
“As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance — a failure that resulted in significant violations of the department’s anti-money laundering and cybersecurity regulations,” said DFS Superintendent Adrienne Harris in a press release.
NYDFS says the AML program was inadequately staffed, failed to transition from a manual transaction monitoring system, and didn’t devote enough resources to addressing risks. Similarly, RHC’s cybersecurity program ignored operational risks and compliance with several security and virtual currency provisions, stemming from management and oversight shortcomings.
As part of the penalty settlement, Robinhood Crypto must retain an independent consultant to evaluate regulatory compliance.
Meta NFT Expansion
Meta is rolling out NFTs across 100 countries after integrating with Coinbase Wallet and Dapper labs. The company formerly known as Facebook has been testing NFT support for Instagram and its namesake social media platform for the past few months. Meta will also add support for Dapper’s Flow Blockchain, which is behind big-name NFT collections and partnerships like NBA Top Shot.
META stock is down nearly 3% this week. COIN shares are up more than 50% on news it’s also partnering with BlackRock ahead of earnings. And FLOW Token rallied more than 48% this week after the news.
Nomad Hackers Returning Funds
A hacker and everyday investors stole nearly $200 million from crypto firm Nomad over the course of a few hours last week. A hacker found a code comment in Nomad’s audit report that explained how the Nomad Bridge could be exploited. The hacker manipulated the transaction code to siphon funds from the bridge to their personal wallet. Everyday cryptocurrency investors saw what happened and joined the looting by copying the transaction. All they had to do was change their wallet to the destination.
The bridge was drained of $190 million by simply hitting copy and paste. At least some investors are feeling remorse. Etherscan data shows roughly $32.6 million in various cryptocurrencies were returned or donated to Nomad’s official funds recovery address by Monday afternoon.
Cryptocurrency News You Might Have Missed
It turns out Helium, which touted itself as a blockchain-powered wireless network, doesn’t make much money or have many customers. Helium received $365 million in funding from the likes of a16z, and retail investors spent $250 million buying hot-spot nodes to earn passive income. But Helium only generates $6,500 in monthly revenue. People bought the $800-$1000 nodes expecting to recoup their investment and start making profits within a few months.
The company was also deceptive about its contracts with Lime and Salesforce (CRM). Helium even posted their logos on its website under its list of partners until questions arose about it.
A16z‘s Andrew Chen, who was one of the lead investors for the clubhouse and substack deals, is now in charge of the firm’s new Game Fund One, which will invest in the metaverse, augmented-reality/virtual-reality game studios, social platforms for gamers, and more. Game Fund One will operate out of Venice, Calif., Chen wrote in his substack.
Cryptocurrency In Focus
Dapper Labs’ FLOW token is the native cryptocurrency for the Flow network and blockchain. Flow’s platform uses smart contracts that allow developers to create their own apps, games and non-fungible tokens.
Dapper Labs is behind some of the biggest projects for officially licensed NFTs and has partnerships with the NBA, NFL, UFC and Spain’s La Liga soccer league. It’s NBA Top Shot line of NFTs, which are essentially digital trading cards of highlight clips, have recorded around $1 billion in transactions.
The company is adding more partnerships with celebrities and athletes to expand its product pipeline. Dapper Labs raised $725 million in its latest funding round back in May, putting its value around $7.6 billion.
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