Bitcoin
Bitcoin miner Core Scientific turns down $1 billion takeover offer
Core Scientific Inc., a significant player in Bitcoin (Bitcoin) mining industry, rejected an unsolicited $1 billion acquisition offer from artificial intelligence (AI) startup CoreWeave Inc., as more and more companies rush to join the crypto bandwagon.
Core Scientific rejects takeover bid
Core Scientific, one of North America’s largest owners and operators of high-powered digital infrastructure for Bitcoin mining and hosting services, has received an unsolicited, non-binding proposal from CoreWeave to acquire all of its outstanding shares on a fully diluted for $5.75 per share in cash.
O proposalvaluing Core Scientific at $5.75 per share, was made on March 28, 2023, and was rejected by the company’s board of directors.
This proposal came shortly after Core Scientific and CoreWeave signed a series of 12-year contracts for Core Scientific to provide approximately 200 MW of infrastructure to host CoreWeave’s high-performance computing services.
Despite the potential benefits of the partnership, Core Scientific’s board determined that the offer significantly undervalued the company and was not in the best interests of the company and its shareholders. The board cited Core Scientific’s significant growth potential and its ability to capitalize on growing demand for data center space and high-performance computing facilities.
This decision follows Core Scientific’s exit from bankruptcy protection in January. Following the announcement, the company’s shares jumped as much as 16% to $8.30 on June 6, and have risen about 70% since the initial takeover offer.
Core Scientific’s $3.5 billion deal with CoreWeave
In other news, Core Scientific recently signed a significant 12-year contract agreement with CoreWeave, a cloud computing provider, to provide 200 megawatts (MW) of infrastructure to host CoreWeave’s high-performance computing (HPC) operations.
This partnership represents a milestone in Core Scientific’s strategy to diversify its business model and capitalize on the growing demand for data center space and high-performance computing facilities.
The deal, valued at $3.5 billion, is expected to generate cumulative revenues in excess of $3.5 billion over the initial 12-year contract periods.
The estimated average annual revenue from these contracts is approximately US$290 million. This revenue stream will allow Core Scientific to balance its portfolio between Bitcoin mining and alternative computer hosting, positioning the company to optimize cash flow and mitigate risk while maintaining substantial exposure to Bitcoin’s potential growth.
Approximately 18% of Core Scientific’s total operational infrastructure will be used to accommodate CoreWeave’s HPC operations.
More companies making forays into crypto
Bakkt, the digital asset platform launched by Intercontinental Exchange (ICE), parent company of the New York Stock Exchange (NYSE), is supposedly exploring a potential sale.
The company hired a financial advisor to evaluate several strategic options, including a possible sale or spin-off.
This news coincides with fintech brokerage Robinhood’s recent announcement of its acquisition from European cryptocurrency exchange Bitstamp for $200 million. This move reflects a broader trend of larger companies acquiring crypto-related companies as the industry consolidates.
Having gone public in 2021 through a merger with a blank check vehicle, Bakkt has been evaluating its strategic alternatives with the guidance of a financial advisor.
Despite posting a loss of $21 million in the first quarter and revenue of $855 million, Bakkt shares rose 15% to $22.33 on June 7. Its market value is around US$300 million.
The potential sale or dissolution of Bakkt emphasizes continued consolidation in the crypto industry as larger companies aim to bolster their presence in the digital asset space. With Bakkt holding a BitLicense from the New York State Department of Financial Services and establishing partnerships with companies such as Starbucks and Microsoft, the platform could emerge as an attractive acquisition target for companies looking to enter or expand in the crypto market.
As Web3 market participants continue to anticipate the arrival of a massive crypto summer, it definitely won’t be a surprise to see more established companies making inroads into the fledgling cryptoverse.
Bitcoin
Bitcoin (BTC), Stocks Bleed as China’s Surprise Rate Cut Signals Panic, Treasury Yield Curve Steepens
Risk assets fell on Thursday as China’s second rate cut in a week raised concerns of instability in the world’s second-largest economy.
Bitcoin (BTC)the leading cryptocurrency by market cap, is down nearly 2% since midnight UTC to around $64,000 and ether (ETH) fell more than 5%, dragging the broader altcoin market lower. The CoinDesk 20 Index (CD20), a measure of the broader cryptocurrency market, lost 4.6% in 24 hours.
In equity markets, Germany’s DAX, France’s CAC and the euro zone’s Euro Stoxx 50 all fell more than 1.5%, and futures linked to the tech-heavy Nasdaq 100 were down slightly after the index’s 3% drop on Wednesday, according to the data source. Investing.com.
On Thursday morning, the People’s Bank of China (PBoC) announced a surprise, cut outside the schedule in its one-year medium-term lending rate to 2.3% from 2.5%, injecting 200 billion yuan ($27.5 billion) of liquidity into the market. That is the biggest reduction since 2020.
The movement, together with similar reductions in other lending rates earlier this week shows the urgency among policymakers to sustain growth after their recent third plenary offered little hope of a boost. Data released earlier this month showed China’s economy expanded 4.7% in the second quarter at an annualized pace, much weaker than the 5.1% estimated and slower than the 5.3% in the first quarter.
“Equity futures are flat after yesterday’s bloody session that shook sentiment across asset classes,” Ilan Solot, senior global strategist at Marex Solutions, said in a note shared with CoinDesk. “The PBoC’s decision to cut rates in a surprise move has only added to the sense of panic.” Marex Solutions, a division of global financial platform Marex, specializes in creating and distributing custom derivatives products and issuing structured products tied to cryptocurrencies.
Solot noted the continued “steepening of the US Treasury yield curve” as a threat to risk assets including cryptocurrencies, echoing CoinDesk Reports since the beginning of this month.
The yield curve steepens when the difference between longer-duration and shorter-duration bond yields widens. This month, the spread between 10-year and two-year Treasury yields widened by 20 basis points to -0.12 basis points (bps), mainly due to stickier 10-year yields.
“For me, the biggest concern is the shape of the US yield curve, which continues to steepen. The 2- and 10-year curve is not only -12 bps inverted, compared to -50 bps last month. The recent moves have been led by the rise in back-end [10y] yields and lower-than-expected decline in yields,” Solot said.
That’s a sign that markets expect the Fed to cut rates but see tighter inflation and expansionary fiscal policy as growing risks, Solot said.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
July 24, 2024, 5:30 p.m.
Updated July 24, 2024, 5:35 p.m.
(Benjamin Cheng/Unsplash)
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Bitcoin
India to Release Crypto Policy Position by September After Consultations with Stakeholders: Report
“The policy position is how one consults with relevant stakeholders, so it’s to go out in public and say here’s a discussion paper, these are the issues and then stakeholders will give their views,” said Seth, who is the Secretary for Economic Affairs. “A cross-ministerial group is currently looking at a broader policy on cryptocurrencies. We hope to release the discussion paper before September.”
Ether, the second-largest token, fueled a slide in digital assets after a stock rout spread unease across global markets.
Ether fell about 6%, the most in three weeks, and was trading at $3,188 as of 6:45 a.m. Thursday in London. Market leader Bitcoin fell about 3% to $64,260.
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