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MicroStrategy Ramps Up Bitcoin Investment with $700M Debt Offering
MicroStrategy, led by Bitcoin advocate Michael Saylor, has increased its convertible debt offering from $600 million to $700 million to purchase more Bitcoin, aiming for an interest rate of 0.625% per annum. The conversion rate for these notes is set at $1,497.68 per share, a 42.5% premium over its closing price on Tuesday, underlining the company's aggressive investment strategy in Bitcoin, of which it holds around 193,000 BTC valued at approximately $13 billion. This move reflects MicroStrategy's position as the leading Bitcoin accumulator among publicly traded companies. Despite a recent dip in Bitcoin prices below $64,000 after reaching a new high above $69,000, MicroStrategy's shares saw a significant increase, trading up nearly 17% on the day, demonstrating the market's response to its continued investment in Bitcoin.
BlockFi Strikes Tentative Deal with FTX for Customer Full Value Recovery
BlockFi, a crypto lender that declared bankruptcy following FTX's collapse has reached a tentative settlement with FTX and Alameda Research's estates, potentially offering full value recovery for its customers. The agreement, pending judicial approval, involves BlockFi receiving $874.5 million in claims against both FTX and Alameda, including a $250 million secured claim prioritized after FTX's bankruptcy plan is creditor-approved. This deal also sees FTX relinquishing its claims against BlockFi, facilitating payments to BlockFi under FTX's restructuring plan. This settlement, stemming from BlockFi's complex financial entanglements with FTX and Alameda, including a $400 million credit line from FTX, and BlockFi being one of FTX's major creditors, is hailed as a significant victory for BlockFi's customers and creditors, redirecting funds initially earmarked for litigation towards customer reimbursements.
DCG and Barry Silbert Move to Dismiss NYAG Lawsuit Over Alleged $3 Billion Fraud
Digital Currency Group (DCG) and its founder, Barry Silbert, have submitted motions to dismiss a lawsuit brought by New York Attorney General Letitia James. The legal action, initiated in October 2023 and expanded recently, accuses DCG, its subsidiary Genesis Global Capital, and Silbert of defrauding investors connected to the Gemini exchange's Earn product and Genesis, resulting in a $3 billion loss following the failures of Three Arrows Capital and FTX. DCG's statement criticized the lawsuit as "meritless," arguing that it is based on "baseless innuendo, blatant mischaracterizations, and unsupported conclusory statements." This legal move comes after Genesis proposed a settlement with the NYAG last month, which DCG opposed.
Trading Desk Insights
Bitcoin is striving to reclaim its previous highs. Following the market downturn, BTC has exhibited a pattern of lower highs. A breach of this market structure could trigger further bullish momentum, propelling prices to new record levels. Failure to surpass the 67,700 resistance level may result in downward movement towards 65,500 and potentially 64,000.
Examining recent ETF flows, the market observed another round of net inflows totaling $332.1 million, alongside continued selling from Grayscale amounting to $276.2 million. Valkyrie marked its most successful day yet with inflows reaching $40.7 million.
According to Bloomberg reports, Pantera Capital is actively seeking fresh capital to acquire discounted Solana (SOL) tokens from the distressed FTX estate. They aim to purchase up to $250 million of SOL tokens at a 39% discount below the 30-day average price of $59.95, with a vesting period of at least four years.
The Dencun upgrade for ETH is slated for March 13th and is anticipated to result in reduced fees for users of layer-2 networks. Essentially, this upgrade enables Ethereum to function as a comprehensive database for other blockchains, thereby enhancing data storage efficiency and affordability.
Stock futures edged higher on Thursday following the first winning session in three days for the major averages. During Wednesday's testimony before the House Financial Services Committee, the central bank chair hinted that the policy rate has reached its "peak for this tightening cycle," but reiterated that the Fed is not prepared to initiate rate reductions. Investors will closely monitor Powell's appearance before the Senate Banking Committee on Thursday.
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Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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