Twitter is set to expand its offerings by launching a new feature that will allow users to trade cryptocurrencies and stocks, according to a report by CNBC. The social media giant has partnered with fintech firm eToro to bring the new financial features to its platform. This is the first notable deal for Twitter since Elon Musk took over as CEO in 2020, after acquiring the social media network for $44 billion.
The new feature can be accessed through a “view on eToro” tab, which will take users directly to eToro’s trading platform. The fintech company, which was founded in 2007, introduced cryptocurrency trading features and a crypto wallet in 2019. With this new partnership, eToro hopes to bring a new audience to the Twitter platform, while Twitter aims to offer more financial services to its users.
Yoni Assia, the CEO of eToro, has called the partnership a perfect match. He believes that Twitter has become an important part of the retail investing community, with many users accessing financial news and acquiring knowledge on the platform. Assia added that “cashtags” searches have grown into the millions, indicating a growing interest in financial discussions on Twitter.
The partnership comes at a time when financial Twitter has become a trend, and was key to the retail trading boom in 2021. This new feature is expected to play a central role in this conversation and is already gaining a lot of traction. Assia also noted that this partnership is a significant opportunity for eToro to expand its customer base and reach more users who are interested in trading cryptocurrencies and stocks.
Meanwhile, Elon Musk has expressed his ambition to turn Twitter into “the biggest financial institution in the world.” In a recent interview, he floated the idea of turning Twitter into a “super app,” offering users access to several online services in one place. This concept is quite popular in China, where super apps function as a gateway to everything a consumer needs in their day-to-day life. WeChat, for example, offers instant messaging, social media, travel and hotel booking, banking and more.
In conclusion, the partnership between Twitter and eToro is a significant step towards offering more financial services to Twitter users. It also provides an opportunity for eToro to reach a wider audience interested in trading cryptocurrencies and stocks. The move also aligns with Musk’s ambition to turn Twitter into a super app, offering users access to various online services. It remains to be seen how successful this new feature will be and whether it will attract a significant number of users to the platform.
Despite the most recent decrease in the price of cryptocurrencies, the investment management business owned and operated by Cathie Wood, Ark Invest, continues to accumulate Coinbase (COIN) shares.
Ark made its first COIN acquisitions since the middle of January on February 10 and February 13, gaining substantial exposure to the most prominent cryptocurrency exchange in the United States.
The ARKK and ARKW funds of Ark resumed their accumulation of Coinbase stock on February 13, adding 102,281 and 16,414 COIN shares, respectively, to their holdings of the company’s equity. Given that COIN finished trading at $56.4 on Monday, the total cost of Ark’s acquisitions was around $6.7 million.
Ark invested approximately $16 million in Coinbase stock during the course of only two days, which is $3.5 million more than the entire amount it had held in COIN shares for the month of January. As of the 14th of February, Ark has purchased a total of 280,000 COIN shares on a monthly basis; however, during the month of January, Ark purchased more than 330,000 COIN shares.
The total number of COIN shares that Ark has acquired so far in 2023 is 614,657, and they were purchased for a total of $28.8 million.
The most recent acquisitions came as CEO and chief investment officer of Ark Invest, Wood, continues to have a strong stance on the cryptocurrency industry.
On February 3, 2019, Wood reaffirmed her positive position on Bitcoin (BTC), stating that she believes the cryptocurrency would reach $1 million by the year 2030. Due to the robust nature of its network, the investing expert is of the opinion that Bitcoin should be used as an insurance policy for nations that are struggling with inflation.
Inflation and the possibility of a Fed policy shift are two factors that the chief executive officer of The Ark thinks will lead to a significant market shift in 2023.
According to the most recent Short Interest Reporting dated February 9, the cryptocurrency bank Silvergate Capital Corp. is the second-most shorted company in the United States, with nearly 72.5% of its shares being shorted. This information was gathered from the market on February 9.
The Financial Industry Regulatory Authority (FINRA) is responsible for the collection and publication of short interest positions for all equity securities twice per month. When investors and traders take a short position, it indicates that they anticipate a price decline for a particular asset, such as a share of stock. A short seller is someone who bets that the price of a securities will go down.
At the time of this writing, Silvergate stock (SI) had dropped by more than 87% during the course of the previous year. The latest financial report for Silvergate, as well as the legal fights the business is now engaged in about its ties with the defunct companies FTX and Alameda Research, have contributed to the pessimistic outlook on the stock.
The bank made the announcement on January 17 that the common shareholders would be responsible for a net loss of one billion dollars in the fourth quarter of 2022. According to a report published by the United States Securities and Exchange Commission (SEC), Silvergate experienced significant withdrawals of deposits during the period. As a result, the company was compelled to seek funding from wholesale sources and sell debt securities in order to keep its liquidity.
It has been claimed that Silvergate obtained a loan of $3.6 billion from the Federal Home Loan Banks System in the United States in order to minimize the consequences of a spike in withdrawals that occurred after the closure of the cryptocurrency exchange FTX in November.
The bank is being investigated and sued in the United States for allegedly providing assistance to FTX in its fraudulent operations, which include lending to users and commingling their cash. The corporation is being accused of “furthering FTX’s investment scam,” and stockholders are asserting that Silvergate violated the 1934 Securities Exchange Act. An examination of the bank’s involvement in FTX enterprises is now being carried out by the Justice Department.
According to Silvergate, Alameda signed up for a banking relationship with the institution in 2018, which was before to the release of FTX. According to the company’s statements, proper due diligence was performed at the time and continued monitoring of the issue was also performed.
Recently, in response to the issue at the bank, Moody’s Investors Service downgraded the ratings of Silvergate Capital and its bank to “junk,” with a negative outlook for both entities.
This information was sent to customers by the corporation on February 3 via its Twitter account in the form of a message. The cryptocurrency exchange known as tZERO is mostly owned by Overstock, and its last day of business will be March 6th of this year. As a result of the suspension, the company announced that it would maintain its concentration on the regulated securities products that it provides during the time that the United States Securities and Exchange Commission (SEC) and other authorities are working to clarify the legal status of crypto assets.
The city of New York is home to the headquarters of the firm known as tZERO, which is focused on developing technological solutions for the financial sector. This makes it considerably easier for private corporations to sell their assets on the public market whenever they find themselves in a position where they need to or want to do so. It is probable that the fact that tZERO provides investors with the opportunity to purchase tokenized shares is the factor that has contributed most to the company’s success in the cryptocurrency industry. Tokenized shares, which may also be referred to as “digital securities” due to their ability to be exchanged on a blockchain, are frequently referred to as “digital securities.”
The online retailer Overstock reportedly owns around 55% of the firm tZERO, as stated in a statement that was issued by the company on August 26 in the form of a press release.
The conventional cryptocurrency exchange known as “tZERO Crypto” was officially introduced in the year 2019, when tZERO celebrated its 10th anniversary. On this particular platform, users had the ability to purchase, trade, and store a wide variety of cryptocurrencies, some of which were Bitcoin (BTC), Ether (ETH), and Litecoin (LTC), amongst others. On the other side, the corporation stated in the most recent notice that it will stop operations of this exchange on March 6th. This notification was sent out on February 3rd and was the most current one that was sent.
The electric car maker Tesla announced on January 31 that it had incurred a gross impairment loss of $204 million for the year 2022 on its holdings of Bitcoin (BTC). This information was included in a filing that was submitted to the United States Securities and Exchange Commission. During the same time period, Tesla reported a gain of $64 million from changing BTC into fiat money at different periods during the year. Nevertheless, the company’s cryptocurrency trading activities resulted in a net loss of $140 million for the year.
The filing provided more explanation about the effect that fluctuating cryptocurrency values have on Tesla’s bottom line:
“According to the relevant accounting standards, digital assets are categorised as intangible assets with an indefinitely long life. In light of this, if their fair values drop below our carrying values for such assets at any time after their acquisition, we will be required to recognise impairment charges. On the other hand, we are not permitted to make any upward revisions for any market price increases until we actually sell the asset in question. Even if there is a rise in the total market value of these assets, the possibility exists that these charges may have a negative effect on our profitability in the periods in which such impairments occur for any digital assets that are held now or in the future.”
Tesla made an investment in Bitcoin amounting to $1.5 billion during the first quarter of 2021. Elon Musk, the company’s creator, had only just made the announcement that the electric car maker will begin taking Bitcoin payments from customers located in the United States.
Just a few short months later, the decision was reversed because Musk stated the necessity for “confirmation of decent (at least 50 percent) clean energy consumption by [Bitcoin miners with favourable future trend” before the business would once again accept the method of payment. According to recent reports, Tesla liquidated around 75% of its bitcoin holdings during the second quarter of 2022.
Silvergate, a cryptocurrency bank located in California, has temporarily halted dividend distributions in order to protect its “very liquid balance sheet.”
The company declared on January 27 that it would stop “the payment of dividends on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, in order to conserve capital.” This information was provided in a statement made on that day.
The business said that it came to the conclusion that it needed to weather the storm of crypto winter in order to survive, but it emphasised that it still retains a “cash position in excess of its digital asset customer-related deposits.”
As the company navigates the current turbulence in the digital asset business, “This move underlines the Company’s aim on keeping a highly liquid balance sheet with a solid capital position.”
According to another statement made by the company, “The Company’s Board of Directors will re-evaluate the payment of quarterly dividends as market circumstances develop.”
The statement comes only 11 days after the corporation reported a significant net loss of one billion dollars in its quarterly report for the fourth quarter of 2022 on January 17. The negative market attitude as a whole, which has led investors to take a “risk-off” strategy over the course of the last year, was what Silvergate said was to blame for the company’s dismal performance.
Alan Lane, the CEO of Silvegate, noted in the Q4 report that the company is still bullish on the cryptocurrency sector but is working to maintain “a highly liquid balance sheet with a strong capital position.” This language is very similar to the language that was used in the most recent announcement.
Prices of both the company’s preferred (SI-PA) and regular (SI) stocks dropped significantly after the announcement that dividend payments would be halted on Friday.
The price of SI-PA fell by 22.71% to $8.85 by the time the market closed, while the price of SI fell by 3.76% to settle at $13.58. These figures are from data provided by Yahoo Finance.
When looking at the big picture, SI-PA and SI offer a bleak image as well since their share prices have dropped by 60 and 87.46% respectively over the course of the last year.
After announcing on January 5 that it has let off 200 people, which represents 40% of its employment, in an effort to stay afloat, the company has not taken this as the sole step it has done this month to shore up its coffers. Instead, it has also taken this measure.
The Bitcoin (BTC) mining company Argo Blockchain has regained stock listing compliance with Nasdaq, which coincides with the recent positive movement seen on cryptocurrency markets.
Amidst the recent uptick in share price, Argo made the formal announcement on January 23 that the firm had once again achieved compliance with the minimum bid price guideline imposed by Nasdaq. Argo has been advised by the Nasdaq stock market listing requirements department that it has successfully satisfied a criteria to maintain a minimum closing bid price of $1 for ten consecutive trading days in order to be eligible for listing on the Nasdaq stock market.
On January 13, this criteria was satisfied, and Nasdaq subsequently confirmed that it believes the situation to be resolved.
After notifying Argo on December 16 that the company was not in compliance with Nasdaq’s minimum bid price standard, Nasdaq has now made this notice approximately a month and a half later.
The problem arose as a result of the fact that Argo’s common stock had not been able to maintain its minimum bid price of $1 during the prior thirty consecutive business days, as is required by the listing regulations of the Nasdaq.
Trading on the Nasdaq was temporarily halted because the cryptocurrency mining firm was experiencing financial difficulties as a result of declining Bitcoin (BTC) prices in addition to rising energy expenses.
In September 2021, trading of American depositary shares (ADS) issued by Argo began on the Nasdaq Global Select Market under the ticker code ARBK.
After opening at a price of $15, ARBK shares have been continuously decreasing in price, and by October 2022, they will have fallen to a price lower than $1.
After receiving a warning from Nasdaq in December that the company was on the verge of becoming noncompliant, ARBK shares eventually began to rebound.
According to information provided by TradingView, the price of Argo’s shares hit $1 for a short period of time on December 30, but it was unable to sustain that price.
After making another attempt at the price level on January 3, ARBK stock has kept trading higher than it was before.
At the end of trading on January 20th, the share price was $1.73.
Argo is not the only publicly traded Bitcoin mining company that has been fighting a losing battle to keep its share values at or above $1.
The Bitcoin mining business Bitfarms, which is based in Canada, was issued a similar warning by Nasdaq on December 15 about its Bitfarms shares (BITF).
In contrast to ARBK, shares of Bitfarms have not yet shown sufficient growth to satisfy the requirements of the Nasdaq for listing.
After reaching beyond $1 for the first time on January 12, BITF fell back below the barrier for the second time on January 18.
Zimbabwe’s Central Bank launched gold coins in July as part of efforts to help curb surging inflation amid a slump in the country’s currency. The move sparked interest in whether gold could serve as a safe haven investment during a market crisis.
Based on Zimbabwe’s development, Blockchain.News recently had a conversation with Collin Plume, the President and CEO of Noble Gold Investments, regarding whether gold could be a safe haven investment that investors should rely on during turmoil times.
The global pandemic raging for over two years has created unemployment, supply chain problems, and more that disrupted economic growth. With the rise of inflation, the US dollar has lost its value and purchasing power. But on the other hand, gold has increased its purchasing power because its value tends to rise with the price of goods.
In light of pandemic worries, rising debts, market downturns, business failures, and mounting inflation realities in regard to economic policies coming out of central banks and other regulators, investors have appeared to rush to invest in gold to secure their financial positions.
Meanwhile, several crypto companies are facing bankruptcy, while many tech firms (such as Klarna, ClickUp, Lacework, Bolt, PayPal, among others) recently announced massive layoffs of employees. But questions remain about how investors can protect themselves from the risks of the ongoing financial crisis.
In the current times of financial instability and turmoil, investors seek opportunities to protect their assets and values.
Inflation Hedge
Asked whether gold is a good investment, Plume said YES. While this can be demonstrated by Zimbabwe’s recent gold adoption, generally, gold is viewed as the ideal hedge against inflation. This is because fiat currency loses its purchasing power when things become more expensive, but gold tends to be priced in those currency units.
Plume explained: “Although the gold market can’t do anything about economic inflation on a macro level, it’s easily the best hedge against inflation for an individual’s investment portfolio”.
Nowadasy, gold’s uses and the demand for physical gold have increased. According to Plume, “Gold’s industrial uses are steadily growing (gold is used in electronics, cars, biotechnology, and even on Mars) while its global supply is quickly shrinking, so its value is guaranteed to go up over time.”
Geopolitical and Economic Instability
Gold also provides investors with a safe haven during economic and political instability. The precious metal has often taken the role of an inflation hedge and a portfolio stabilizer during turbulent financial markets.
The gold market rose above the $2,000 an ounce level in March for the first time since August 2020, in response to Russia’s invasion of Ukraine in late February. Geopolitical uncertainty has increased the attractiveness of the precious metal for investors seeking a safe haven for their funds.
Prices have since retreated, declining by around 6% year-to-date, and have struggled to regain ground above the $1,800 an ounce level where it started the year.
This year, gold is getting investors’ attention following Russia’s invasion of Ukraine. Sanctions against Russia have already taken the commodities market for a wild ride, fueling concerns of stagflation — a combination of high inflation and slow economic growth — both of which is positive for gold.
In July, Zimbabwe’s central bank started selling gold coins to the public to help protect people’s savings against the country’s runaway inflation and offer an alternative to the widely used US dollar.
Zimbabwe still remembers the country’s economic collapse under the late Robert Mugabe, who ruled for nearly four decades.
Hyperinflation forced the nation to abandon the Zimbabwe dollar in 2009, and it opted instead to use foreign currencies, mainly the US dollar. During the worst of the crisis, the government stopped publishing official inflation figures, but current statistics put the inflation rate at 89.7%.
Gold Tokenization
Despite physical assets like gold, silver, among others, having weathered countless financial storms throughout history, Gold might still need alternative trading platforms to help democratize access to gold using modern technology through tokenization.
Investment in physical gold has many advantages, but it has a few drawbacks. The main challenges that investors face in the investment of physical gold are issues associated with accessibility, storage, security and ability to resell on a regulated market.
While Gold is considered a safe bet, buying it is often a challenge for retail investors. For example, an average person will need to pay the costs associated with gold acquisition, trust an intermediary, and have a storage solution.
In recent years, the excitement surrounding cryptocurrency has been attracting precious metal buyers away from their traditional investments as they dipped their toes into the crypto pool. But with the recent digital asset market crash, that seems to be changing. Many investors are returning to gold to tame the prevailing financial winds in the crypto markets.
Yet, cryptocurrency like Bitcoin is in a tough year because of the recent market crash. Major Cryptocurrencies, including Bitcoin, and Ethereum, have plummeted, triggered by inflation and Fed’s interest rate hikes.
For the long term, blockchain technology is increasingly being used to address all these constraints in today’s internet era. Blockchain enables the tokenization of gold and other commodities. The technology allows users to invest in digital gold, therefore helping to resolve various issues tied to physical gold ownership.
Gold as Key Portfolio of Investment
Gold’s performance moves independently and has low correlation with other assets such as stocks, real estate, commodities, bonds. The precious metal may therefore help serve as a return diversifier within a broader multi-asset portfolio.
Therefore, based on the above analysis, gold is a good investment that investors can use to hedge and diversify their portfolios. However, according to Plume: “Some people believe gold is just for older investors, or they don’t understand the use for it. Many bullish investors focus on the hottest, newest assets, and while gold may not offer the same spikes in value as Tesla or crypto, it also doesn’t bring the same risk of loss as they do.”
Investors are advised to hold around 5-10% of their portfolio’s value in a form of gold, whether physical bars and coins, or digital coins, or instruments such as gold ETFs (exchange-traded funds), to diversify their holdings and potentially hedge against crashes in the value of cryptocurrency, stocks, and bonds.
Gold aligns perfectly with the investment mantra of “not putting all your eggs in one basket” — providing a safety net against events that may plummet the value of popular investments like cryptocurrency and stocks.
“Like any good financial advisor, we highly recommend using gold to diversify your portfolio. Gold is a low-risk, easy-to-access wealth-building tool that can balance out the volatility of other investments like tech stocks or cryptocurrency. It yields the best return when held over a longer period of time, but many younger investors just don’t know about it yet!”, said Plume.
The Federal Deposit Insurance Corporation (FDIC), an independent federal agency insuring deposits in U.S. banks in the event of bank failures, on Friday told American commercial banks to ensure that any crypto firms they partner with do not overstate the reach of deposit insurance.
The financial regulator is concerned that consumers may be confused about how safe their funds are when placed in cryptocurrencies, particularly in cases where crypto companies offer a mix of uninsured crypto products alongside insured bank deposit products.
In a statement on Friday, the FDIC advisory said: “Inaccurate representations about deposit insurance by non-banks, including crypto companies, may confuse the non-bank’s customers and cause those customers to mistakenly believe they are protected against any type of loss.”
Specifically, the FDIC told banks to ensure that they make it clear to the public that deposit insurance only covers insured banks in case of collapse. The agency stated that insurance protection does not cover failures of any non-bank partners, which can include crypto custodians, exchanges, and wallet providers.
The FDIC urged banks dealing with crypto firms that they should make their customers know which of their funds will be insured by the government in the event of a collapse, and which have no protection.
Voyager Digital on Spotlight Again
The new advisory by the U.S. banking regulator comes after the Federal Reserve and the FDIC on Thursday ordered crypto brokerage firm Voyager Digital to stop telling clients that their deposits are protected from losses by the Federal Deposit Insurance Corporation because such claims are not true.
Voyager has stated that it is federally insured on its website, mobile app, and social media accounts.
Voyager’s website on Friday stated: “Your USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the cash you hold with Voyager is protected.” The website claimed deposits are “FDIC insured on USD $250,000.”
On Thursday, the FDIC and the Federal Reserve issued a joint letter to Voyager, demanding the crypto broker to scrub such claims from its website and social media, and to write a confirmation note by Monday that they have done so.
Early this month, the FDIC was probing how bankrupt crypto broker Voyager was marketing itself to customers.
FDIC officials identified that Voyager is violating the Federal Deposit Insurance Act, which prohibits anyone from implying that deposits are insured when they are not.
Voyager Digital has a bank account with Metropolitan Commercial Bank of New York. The FDIC pointed out that while the bank account is insured, customers opening and using accounts on the Voyager Digital platform are not insured.
The FDIC is a government agency responsible for giving insurance protection to the public’s bank accounts — such as checking, savings and CDs — in case of unforeseen losses.
Having an FDIC insured account means that anyone who has at least $250,000 deposited into a bank would have their funds reimbursed in case the bank collapses unexpectedly.
However, speculative investments such as cryptocurrencies and stocks, are normally not FDIC insured. Such assets are not insured by the FDIC because they do not qualify as financial deposits and carry a certain amount of risk that investors opt in to bear. That is according to the regulator.
The US Federal Reserve on Wednesday announced a 0.75 percentage point interest rate increase as part of efforts to clamp down rising inflation without creating a recession.
The latest interest rate rise by the Fed follows a similar hike in June – aggressive hikes that have so far put pressure on markets, including cryptocurrencies like Bitcoin (BTC). This is the fourth time the central bank has increased interest rates this year.
The price of Bitcoin increased 3.6% in the hour after Fed Chair Powell announced another big interest-rate raise.
Although crypto prices rose slightly following the Fed’s announcement, the markets are expected to remain volatile and bearish in the next few weeks.
Bitcoin was trading around $22,784.10 as of Thursday morning, 01:24 am EAT (East Africa Time), up 8.04% in the last 24 hours.
Aggressive rate hikes normally have negative impacts on crypto prices, and the markets are likely to continue to be bearish in the short term.
Industry leaders shared similar opinions regarding crypto market outlook, Chris Terry, BPSAA Board Member and VP of Enterprise Solutions at SmartFi, commented:
“We anticipate that Bitcoin will continue to trade in this tight range of $20,000 plus or minus 10-15%. None of this should be a surprise. We could be in this stalled market for weeks and weeks. Boring.”
“The crypto economy also moves up, overperforming the stocks, thanks to the higher volatility. It’s very interesting also to see how crypto is starting to correlate with the stock market and in general, with the planetary economy. It means that the crypto market is reaching a certain level of maturity.”
Risky assets like cryptocurrency and stock have been heavily correlated since the beginning of this year. Both have been moving in similar patterns and have struggled to gain momentum this year as investors are pulling away in response to soaring inflation, rising interest rates, and a potential recession.
Does the interest rate hike continue?
The Fed raised its benchmark interest rate by 0.75% (75 basis points), thus repeating the same hike it created the previous month.
The hike comes after data released earlier this month showed that prices of goods jumped a staggering 9.1% in June. That inflation rate, as witnessed more than 40 years ago, has put additional pressure on the Federal Reserve to increase interest rates.
Federal Reserve Chairman Jerome Powell stated on Wednesday that the central bank remains committed to bringing inflation down to a target rate of 2% and further said the Fed is well-equipped to accomplish that goal.
Powell mentioned at a press conference: “My colleagues and I are strongly committed to bringing inflation back down, and we’re moving expeditiously to do so. We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”
The Fed stated that additional rate hikes will be expected as “appropriate” to fight runaway inflation. In a statement on Wednesday, the Fed said: “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
The central bank added, “Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity.”
An increase in the benchmark interest rate normally raises borrowing costs for consumers and businesses, which in theory, is meant to reduce inflation by slowing the economy and reducing demand. This means borrowers will face higher costs, from credit card debt and car loans to mortgages. But that approach risks pushing the economy into a recession.
Mixed economic data indicates a country bolstered by robust hiring and an uptick in retail sales despite several rate hikes this year designed to slow economic activity. Last month, the U.S. witnessed stronger than expected job growth, as the economy added 372,000 jobs while the unemployment rate remained at 3.6%.
However, other indicators (like slowing home sales and a drop in consumer confidence) suggest the economy has started to weaken.
According to Andrew Levin, a former Fed economist and a professor at Dartmouth College, if the central bank hikes interest rates too quickly, an abrupt economic slowdown could send the economy into a recession.
