Coinbase Secures US Contract in Throwback to Soured Deal

Coinbase continues to gain influence despite regulatory headwinds. The leading U.S.-based cryptocurrency exchange has secured a contract with the Department of Homeland Security that’s worth a potential $1.4 million, surpassing the amount of another similar mandate for the company. Based on the terms of the agreement, Coinbase will deliver “application development software as a service” for the U.S. Immigration and Customs Enforcement (ICE) division.

It’s not the first contract that Coinbase has secured with the government. The company was also selected by ICE in August to provide “computer forensics services” to the agency for just under $30,000. The latest contract has a start date of Sept. 16 with an end date in a year from now and the potential for an extension until 2024.

‘Bizarre’ Acquisition

The deal brought up some bad memories on social media for the link that it has to a soured acquisition Coinbase made two years ago. In 2019, Coinbase acquired a company called Neutrino, paving the way for it to perform blockchain analytics.

Coinbase was quickly blamed for not performing proper due diligence after it surfaced that Neutrino, which made spyware tools, had ties to repressive regimes. The exchange was accused of being “wildly out of touch with its customer base.” Now that very deal appears to be what has catapulted Coinbase into the arms of the ICE.

Jesse Powell, who is at the helm of competing cryptocurrency exchange Kraken, was among those to question the reasons behind the contract. He recalled “the even more “bizarre…acquisition [Coinbase] made and reputational hit they took to be able to offer this service to the government.”

Source: Twitter

The response to the deal on Reddit was similarly met with skepticism.

Regulatory Headwinds

Coinbase has shed about 25% of its value since going public in mid-April of this year.

The company is currently battling some regulatory headwinds as it seeks to introduce a lending product with decentralized finance (DeFi) characteristics. Nonetheless, Coinbase CEO Brian Armstrong is not backing down. The company has most recently filed an application to expand into derivatives trading seemingly for products such as bitcoin and Ethereum futures, where it would compete with the likes of the CME.

ECB President Lagarde Says Cryptocurrencies Are Not Money

Bitcoin’s two primary use cases are as a store of value and a payment method. The leading cryptocurrency has given investors a hedge in times of rising inflation and ballooning balance sheets at central banks. Year to date, the bitcoin price has advanced 61%.

Meanwhile, users are also testing bitcoin’s mettle as a payment method, with countries such as El Salvador deeming the flagship cryptocurrency as legal tender. Bitcoin is also increasingly being accepted by businesses to pay for goods and services,  with movie chain AMC Entertainment the latest company to catch crypto fever.

Now Christine Lagarde, president of the ECB, has come out swinging against cryptos, saying in an interview with Bloomberg that they “are not currencies” and adding:

“Cryptos are highly speculative assets that claim their fame as currency possibly but they’re not.”

Bitcoin billionaire Tyler Winklevoss agreed with Lagarde in the sense that cryptos are not issued by the state, implying that this is a feature and not a bug.

Digital Euro

Meanwhile, the ECB is currently in the process of developing its own digital euro, as policymakers race to compete with the innovation in the private sector. The regulatory wheels move slowly.

The ECB is launching a two-year “investigative phase” that will get underway next month in which it will weigh the potential features of a digital euro as well as the impact on the economy and financial markets. Lagarde wants to give consumers the option to pay in a digital currency that “does not jeopardize the whole banking system,” according to her.

Race to Digitization

European policymaker Benoît Coeuré has warned that central banks are not moving quickly enough to introduce their own versions of digital currencies. Coeuré believes that the one-two punch of stablecoins, such as Tether that is pegged 1:1 to the U.S. dollar, and decentralized finance (DeFi) stand to compromise the way banks do business.

Changpeng “CZ” Zhao, who is at the helm of leading cryptocurrency exchange Binance, believes that central bank digital currencies (CBDCs) will be good for the cryptocurrency industry. He told the South China Morning Post that CBDCs will help to “promote bitcoin and cryptocurrencies to become a means of payment,” as consumers become comfortable with making micro-payments with digital assets.

Coinbase Adds Support for Shiba Inu, Meme Coin Soars

Leading cryptocurrency exchange Coinbase announced it supports meme coin Shiba Inu for users. Coinbase customers can now trade Shiba Inu on Coinbase.com as well as the company’s mobile apps on iOS and Android.

Earlier this month, Coinbase listed Shiba Inu on its professional trading platform, Coinbase Pro, an addition that was initially announced in June but was delayed due to a technical glitch.

Shiba Inu is an Ethereum based decentralized meme token. It was created as an alternative to fellow meme coin Dogecoin, whose mascot is a Shiba Inu, a Japanese dog breed.

The Shiba Inu community cheered the move, sending the cryptocurrency soaring more than 20% in the last 24-hour period to $0.000008299. Trading volume in SHIB/USD was $243 million at last check based on CoinMarketCap data.

The Shiba Inu team is famous for gifting Vitalik Buterin with a large chunk of the Shib supply, which the Ethereum co-founder then sent to a charity.

Elon Musk Bump

Shiba Inu investors also recently celebrated when Tesla CEO Elon Musk, who is a known Dogecoin fan, posted a picture of a new puppy, a Shiba Inu. Musk said in June that his “Shiba Inu will be named Floki,” which is the name of a boat builder character in the Vikings series on The History Channel.

Musk’s big reveal captured the attention of the Dogecoin team, which tweeted in response that his “doge is shaped somewhat like a small bean.” The Doge price is currently trading more than 3% lower at $0.2375. On social media, Dogecoin investors tout the $1 threshold as a target price for the meme coin.   

Source: Twitter

Coinbase Moves

Coinbase announced the Shiba Inu listing in the face of regulatory scrutiny. The company is doing battle with the U.S. SEC over a lending product it wants to launch in October. Regulators have warned Coinbase that if it follows through with its plans, the SEC is prepared to sue.

In addition, Coinbase has started the process to begin trading cryptocurrency derivatives. The company has filed an application with the National Futures Association, which if approved would put it under the regulatory oversight of the CFTC. Coinbase would be joining the likes of the CME, which currently supports futures trading in bitcoin and Ethereum.

AMC Chief Expands Crypto Payments, Leaves Off Dogecoin

AMC Entertainment made a splash in the cryptocurrency industry by revealing it intends to support more than just bitcoin payments. In a surprise move, AMC CEO Adam Aron tweeted that the company plans to also accept Ethereum, Litecoin and Bitcoin Cash for movie tickets and concession transactions. One cryptocurrency that was conspicuously left off the list was Dogecoin.

The Dogecoin community has had AMC on their radar since Aron announced the bitcoin integration in August. YouTube talk show host Steven Steele pointed out that many Dogecoin investors also own shares of AMC’s stock, which would make both camps happy. Many Dogecoin fans expressed their surprise that Aron left out Dogecoin, calling it a big mistake, while others are holding out hope that it is just a matter of time.

Dogecoin bulls have been trying to get the meme coin more into the spotlight with hopes of driving the price up higher to the $1 threshold and beyond. The Doge price currently hovers at just below $0.24.

Crypto Push

Aron first revealed that the company would be integrating bitcoin payments during the movie chain’s Q2 earnings call. Since then, the meme-coin crowd has been sending him a message that Dogecoin also works well for payments, boasting transactions that are faster and cheaper than bitcoin.

Dogecoin can complete transactions in about one minute, while bitcoin blocks are completed in around 10 minutes. Thanks to second-layer technology such as the Lightning Network, bitcoin payments can be made in real-time, or in about the same amount of time it takes to send an email.

Tall Tale?

AMC’s announcement was also met with some skepticism, given that it came on the heels of the recent fake news involving Walmart and Litecoin. Scammers issued a fraudulent press release saying that the big-box retailer and the Litecoin project were teaming up, and it sent the markets into a frenzy. Litecoin initially spiked, but once Walmart and Litecoin denied any collaboration, those gains were quickly erased.

For AMC, the announcement came straight from the CEO’s Twitter account, which incidentally has yet to be verified.  AMC’s stock price is up fractionally on the day, while the bitcoin price is slightly lower.

Fidelity Nudges Securities Regulator on Bitcoin ETF

Coinbase’s recent pushback on the U.S. SEC for a lending product goes to show that the cryptocurrency industry and regulators have been at odds lately. Blockchain startups are looking for a clearer regulatory framework by which to operate but have been left disappointed to navigate the waters themselves with the looming threat of the regulatory hammer coming down on them.

Numerous attempts at a bitcoin ETF have been rebuffed. Now one institutional investor powerhouse is looking to use its influence to move tech innovation forward. Fidelity Investments went behind virtual doors to convince the SEC to clear the path for a bitcoin ETF, touting the benefits that the product brings to the table.

Pros and Cons

Among the participants in the virtual meeting on Sept. 8 was Fidelity Digital Assets President Tom Jessop. He touted demand for a bitcoin ETF among investors, the rise of crypto adoption and soaring trading volumes as evidence that the market is ready.

Fidelity executives also addressed the elephant in the room — the nurturing of tech innovation overseas.  The SEC has multiple bitcoin ETF applications on its desk currently but has yet to accept any of them.

SEC Chairman Gary Gensler has hinted at entertaining a bitcoin ETF under certain conditions. Under Gensler, any bitcoin ETF would be subject to the strictest of regulatory oversight based on mutual fund rules. The companies behind the bitcoin ETF applications, however, are seeking greater flexibility.

The SEC chief might also consider a bitcoin futures-fueled ETF. Fidelity argues, however, that the bitcoin market is mature enough so that investors can handle direct exposure to the flagship cryptocurrency through products based on the Securities Act of 1933, according to the marketing material from the meeting.

No Stranger to Bitcoin

Fidelity is no stranger to cryptocurrencies. Abby Johnson, Fidelity CEO, has been mining cryptocurrencies since bitcoin was trading below $5,000 and Ethereum was trading for a few hundred dollars. Now with the bitcoin price knocking on the door of $50,000 and Ethereum barreling for $4,000, Fidelity is likely generating profits hand over fist from its crypto mining operations.

Fidelity also filed with regulators for a bitcoin ETP in March. Similar products have already been approved in other countries, including Germany, Canada, Switzerland and Sweden.

Ark Invest Chief Forecasts Bitcoin $500,000 Over Half a Decade

After a rocky start to the week, the bitcoin price is back above the $46,000 threshold. If the bulls are right, bitcoin’s rally could be just getting started. One such bitcoin bull is swinging for the fences.

Cathie Wood, CEO of ARK Invest, predicts that the bitcoin price could hit $500,000 over a five-year time horizon. That’s an increase of more than 10 times from where the flagship cryptocurrency is currently trading.

The ARK Invest chief is also bullish on the opportunity in Ethereum, the second-biggest cryptocurrency. Wood gave the bold outlook at the SALT Conference, which is currently underway in New York.

Key Themes

In order for the bitcoin price to live up to Wood’s forecast, a couple of key industry trends need to persist, according to her. Companies must continue to move out of cash and into bitcoin on their balance sheets. Next, institutional investors must earmark 5% of the assets under management to the leading cryptocurrency. 

The wheels are in motion for these conditions to be met. Michael Saylor, CEO of business software company MicroStrategy, revealed this week that his company just invested more than $242 million of its Treasury assets to buy 5,050 bitcoins, bringing the total number of bitcoins on the balance sheet to approximately 114,042.

Other executives who have followed in Saylor’s footsteps include Square CEO Jack Dorsey and Tesla chief Elon Musk. Incidentally, Wood is also bullish on both Tesla and Square and her firm has exposure to both stocks.

Meanwhile, institutions are increasingly dipping their toes into the cryptocurrency waters. The Grayscale Bitcoin Trust has attracted the likes of Morgan Stanley, which recently poured approximately $240 million into the fund. ARK Invest’s Wood is also bullish about the fact that Central American countries are increasingly integrating bitcoin into their economies. El Salvador leads the charge after making bitcoin legal tender in the nation.

Ethereum a Close Second

While Wood is partial to bitcoin, she also has a place for Ethereum in the portfolio. She points to Ethereum’s role in the burgeoning market segments including non-fungible tokens (NFTs) and decentralized finance (DeFi), both of which have helped to fuel Ethereum’s 350% price rise year-to-date.

Wood suggests a cryptocurrency asset allocation of 60/40 in bitcoin and Ethereum, respectively.

Nike Shares Fall on Global Supply Chain Woes

Supply chain problems have wreaked havoc on companies around the world over the past year. The pandemic-fueled global supply chain issues have thrown a wrench into the operations of companies across sectors.

Worse, global supply chain problems are not going to subside anytime soon, according to high-profile economist Mohamed El-Erian. He predicts that supply chain constraints will stick around for another one to two years, or longer. This is a setback for companies like Nike that are right in the middle of the supply chain disruption.

Wall Street firm BTIG is not optimistic and has downgraded Nike’s stock from buy to neutral as a result. Shares of Nike tumbled more than 2% in response to the downgrade.

Nike’s stock is hovering below its all-time high of $174 and currently trades for just below $160. Investors who believe that Nike will weather the storm and use its pricing muscle to mitigate the damage might see the downturn as a buying opportunity, though it’s unclear where the bottom might be.

Factory Fears

BTIG’s bombshell downgrade was in response to factories in Vietnam that were forced to be shut down due to the spread of the virus, which has had a ripple effect on the supply chain.  BTIG analyst Camilo Lyon wrote in a report,

“We believe the risk of significant cancellations beginning this holiday and running through at least next spring has risen materially for NKE as it is now facing at least two months of virtually no unit production at its Vietnamese factories.”

The factories in question comprise more than half of Nike’s footwear production and nearly one-third of apparel items. The timing couldn’t be worse, with the holiday season right around the corner and vaccinations becoming more prevalent so that retail sales could benefit.

Vietnam is suffering from another wave of the pandemic, particularly in Ho Chi Minh City, which has triggered restrictions in the economy and crippled the manufacturing sector.  A mere 5% of Vietnam’s population has been vaccinated from COVID-19.

Nike Not Alone

While Nike’s issues might begin in Vietnam, the supply chain disruption is a global problem. As a result, other brands are feeling it too. Athletic apparel company Lululemon, for example, experienced a 61% jump in Q2 revenue, but the supply chain is still a worry. They similarly source a good chunk of their apparel from Vietnam and are having to scramble as a result. Nonetheless, Lululemon has a strong sales outlook for 2021.

Crypto Markets Take Wild Ride Amid Fake Walmart Development

The cryptocurrency markets were sent into a tailspin in response to fake news involving retail giant Walmart. Major financial media outlets erroneously reported that Walmart was partnering with Litecoin, the 15th biggest cryptocurrency. It was a false development based on a fake press release, which was reportedly published on GlobeNewswire.

According to social media accounts, some reports even attributed a fake quote to Walmart CEO Doug McMillon. The Litecoin price initially rallied roughly 30% before the rumors were debunked.

Crypto Twitter was quick to call out the media outlets for the fake news, but the damage was already done. Confusion had set in as investors sought to decipher whether or not a major big-box retailer was about to take the cryptocurrency plunge, which would potentially be a major catalyst for wide-scale adoption. The Litecoin Foundation and Walmart eventually cleared things up, with the retailer telling Reuters that the news “was not real.”

The bitcoin price and the broader cryptocurrency markets quickly took a turn for the worse. Litecoin reversed a double-digit percentage gain to a 2% loss on the day.

Regulatory Spotlight

The Walmart and Litecoin scandal comes at a time when cryptocurrencies are under a regulatory spotlight. Regulators are eyeing cryptocurrency exchange Coinbase for a new lending program, even threatening to sue the company if it follows through with its transparent plans. The U.S. SEC already has the decentralized finance (DeFi) space in its sights, now that the total value locked (TVL) in the market has soared to $172.5 billion.

The vulnerability in the Walmart/Litecoin scandal, however, was not the cryptocurrency industry. It was the mainstream financial media, which hastily ran with the development.

Bullish on Bitcoin

Investors also had a bullish development on bitcoin to consider. Bitcoin bull Michael Saylor, who is at the helm of business software firm MicroStrategy, put his money where his mouth is once again. MicroStrategy has spent $242.9 million to buy an additional 5,050 bitcoins for the company’s balance sheet. Saylor paid an average of $48,099 for each bitcoin during the company’s fiscal Q3.

MicroStrategy holds approximately 114,042 bitcoins on its balance sheet in total and has spent more than $3 billion over the past year-plus to do so. The bitcoins are currently worth slightly more than $5 billion.

Apple’s Pain Is Gaming Developers’ Gain

Apple suffered a defeat after a federal court decided the i-Phone maker must make changes to its App Store policies. The ruling came on the heels of a high-profile legal battle between Epic Games, which is behind Fortnite, and Apple in which the game developer sought to keep a bigger piece of the revenue pie.

Judge Yvonne Gonzalez Rogers decided that Apple can no longer stop developers — including gaming companies — from using third-party sites rather than the App Store for online transactions. The decision could cost the tech giant billions of dollars.

Court Ruling

The ruling will have far-reaching implications for this market segment, the size of which is valued at some $100 billion. The revenue that Apple generates from its App Store has been a driver of its earnings. The company has benefited from taking a cut of between 15-30% of the gross revenue that developers generate on its platform. The new rule goes into effect in December.

Ultimately the court ruled on Epic’s side on California’s unfair competition law but sided with Apple on the other nine counts in the complaint. Apple’s shares tumbled 3% on the development.

Epic Games is on the hook for a cut of the revenue it generated for sending its users off the App Store for purchases last year.

Gaming Stocks

While Apple was not found to hold a monopoly in the gaming market, the court ruling was a boon for gaming-related stocks. Companies such as Zynga and Roblox saw their shares advance by 6% and 2%, respectively. They could see their revenues increase now that they don’t have to direct a cut to Apple if they can send online purchases elsewhere.

One exception was GameStop, which did not participate in the gaming stock rally. In its recent earnings report, GameStop revealed how it is transforming to more of a tech company rather than the brick-and-mortar video game retailer that it has come to be known.

GameStop plans to invest in modernizing its e-commerce platform and product line beyond just video games to areas such as collectibles, toys, and other relevant categories. Investors, however, seemingly don’t see GameStop as an e-commerce play that is poised to benefit from the Apple court ruling.

BlackRock CIO: ‘Bitcoin Could Go Up Significantly’

The bitcoin price is stuck in the doldrums, having retreated from the $50,000 level that it saw last weekend. In this uncertain global economic environment, bitcoin is increasingly making its way into the investment conversation as a store-of-value asset that brings some competition to gold.

Bitcoin has gained a reputation as a hedge against higher consumer prices given its scarcity coupled with its nature as a non-sovereign currency. BlackRock’s CIO of global fixed income, Rick Rieder, sees it differently.

Rieder told CNBC he is not convinced that bitcoin serves as a great hedge against inflation, pointing to the cryptocurrency’s correlation to stocks and risk assets. The bulls have been in control in both markets, with the S&P 500 up 21% so far this year compared to bitcoin’s 50+% gains.

He pointed to bitcoin’s wild price swings, saying that when an asset moves 10-15% in a day, which the leading cryptocurrency has been known to do, “it’s really hard to hedge big, organic asset pools with that as a hedge.”

Bitcoin Price Potential

Rieder, who noted that BlackRock owns “a small piece of bitcoin,” believes greater bitcoin adoption is on the horizon and “more people are going to enter that fray over time.” BlackRock holds a “moderate position” in its portfolio. The BlackRock CIO of global fixed income is also a fan of volatile assets boasting “upside convexity.”

BlackRock’s Rieder would not be surprised to see bitcoin “go up significantly,” as it has been known to do. He does not see a volatile asset like bitcoin as a “core asset” comparable to equities or bonds, but says,

“I think to have a bit as more of a speculative tool in a portfolio, I think there’s some value in that.”

Bitcoin vs. Gold

BlackRock’s Rieder is not alone in his view that bitcoin is not the best hedge. Billionaire investor Leon Cooperman told CNBC that gold is the go-to asset during uncertain times, and if investors are looking for a safe haven they should flock to the precious metal.

Cooperman, who runs Omega Advisors, says he does not understand bitcoin and therefore he steers clear of the flagship cryptocurrency. He advises investors to do the same, especially if they’re old and are boggled by it.

AMC Entertainment Makes Strategic Moves in Year-End Push

AMC Entertainment is back in the driver’s seat. The movie chain, which has been capitalizing on its momentum as a meme-stock phenomenon, has made a couple of bold moves of late.

First, AMC is doling out $25+ million in an ad campaign featuring Nicole Kidman. Next, AMC CEO Adam Aron tipped his hand to a possible partnership with fellow meme stock GameStop on Fox Business, though he kept the details close to the vest. He did suggest that there could be some sort of “marketing effort” between the two companies if the talks are fruitful.

AMC’s shares were up more than 2% on Thursday and are inching closer to the $50 threshold.

$25 Million Ad Campaign

AMC is betting $25 million on the fact that Americans have become vaccinated from COVID and are experiencing cabin fever. The new ad campaign uses the slogan, “We make movies better.” The minute-long commercial spotlights Kidman at the movies as AMC looks to connect with consumers on an emotional level. The ad will launch during the MTV Awards this weekend.

Meanwhile, the movie chain is saddled with billions of dollars in debt on its balance sheet. But they also have $2 billion in cash plus liquidity, as of the end of Q2. In the end, it was worth the gamble for Aron and the AMC team.

The company is looking to attract consumers to its movie theaters with an enticing pipeline of films that are slated for the fourth quarter. In doing so, AMC has the opportunity to potentially bolster revenue and profits. As a result, Aron believes that the return on the ad campaign investment will be well worth it, according to his interview with Fox Business.

 

Glory Days

Aron said he is committed to “restoring this company to health” and getting through the latest wave of the pandemic. He wants to return AMC to its former glory. He explained how AMC’s shareholder base has flipped from being primarily institutionally owned to now being mostly held by retail investors. Individual investors have driven the stock up 2,300% this year, though AMC shares are off their high.

AMC is coming off the heels of a record Labor Day weekend in which more than 2 million movie-goers visited its U.S. theaters.

Ukraine Legalizes Bitcoin With Passage of Crypto Bill

A trend has emerged in which countries have begun to integrate bitcoin into their economies. Until now, the focus has been on Latin America, with El Salvador, Cuba and Panama making moves.

Europe is in play too, with Ukraine passing a bitcoin bill of its own. The Ukrainian Parliament gave the Draft Law on Virtual Assets the green light on Sept. 8, granting bitcoin and other cryptocurrencies legal status in the Eastern European nation and setting the regulatory wheels in motion.  The bill must still be signed into law by President Volodymyr Zelensky after receiving the support of 276 members of Parliament.

Ukrainians are limited to using the local currency, the hryvnia, to buy goods and services. The new law, however, will bring bitcoin and other digital assets closer to the forefront and give locals more confidence to invest.

Ukraine on Crypto

Until now, Ukraine has been lukewarm on cryptocurrencies, neither banning them nor formally accepting them, either. The country has been lacking a regulatory framework from which crypto and blockchain service providers could operate.

The Ukrainian population has been free to own and trade bitcoin and other digital currencies, but they lacked the backing of the court system in the event of a scam or fraud. The new law is expected to encourage more Ukrainians to enter the market.

If the legislation is signed into law, it will set the tone for cryptocurrency regulation in Ukraine. Cryptocurrency exchanges and Ukrainians holding cryptocurrencies will be better protected from nefarious activity. Cryptocurrency merchants will be able to legitimately operate in the country, which means they will have to pay their taxes in Ukraine too. They will likely need to have the necessary permits, which are expected to be issued by a yet-to-be-named regulatory branch.

The plan is to integrate cryptocurrencies into the economy for merchants and investors alike by 2022, according to local reports. For that to happen, however, MPs must overhaul the tax and civil codes to pave the way for crypto. The passage of the draft law was the first step in the process.

Bitcoin Price

The bitcoin price has yet to reflect the bullish sentiment, with the price stuck below the $50,000 that was surpassed last weekend.

The pullback in the bitcoin price is not worrying sophisticated investors given that the technical indicators and fundamentals appear bullish in nature.

‘Bitcoin Pullback Should Not Come as a Surprise,’ Says Analyst

After bitcoin crossed the $50,000 in early September, it appeared that the bulls were back in control. The mood among crypto investors was positive, not least because of El Salvador’s bitcoin integration, which got underway on Sept. 7.

That optimism was interrupted when the bitcoin rally turned into a sell-off yesterday and bitcoin corrected by nearly 20% to as low as $43,000. The bitcoin price has since recovered some of those losses but it remains below $50,000 for now. Long-term investors are used to the volatility, but newcomers might be just getting a taste of their first bitcoin dip.

Key Indicator

Lennard Neo, head of research at Stack Funds, published a report that might ease the worries of investors. Neo points to one tool known as the Puell Multiple, which is a reflection of bitcoin supply via miners and the revenues they generated. This indicator is looking bullish despite the market sell-off. Neo explains,

“Despite the recent bitcoin flush, [the] Puell Multiple remains strong with bitcoin potentially able to breach its $65,000 highs before the indicator reenters the sell-zone.”

In his analysis, Neo points to bitcoin’s “resilience” at the start of September after the leading cryptocurrency broke $50,000 more than once before the downturn. Bitcoin remains “relatively well supported,” he says, above its 200 day moving average. Neo continues,

“The pullback should not come as a surprise, as we anticipated headwinds in our prior report. However, we believe this to be a temporary retracement as leverage longs are flushed with funding rates reset and expect bitcoin to continue trading in an upward channel.”

McDonald’s Accepts Bitcoin in El Salvador

In addition to the technical indicators, Neo also observed bitcoin’s fundamental strength. This includes the acceptance of bitcoin as a legal currency by El Salvador. The country has scooped up 500 bitcoins in recent days and is not done yet.

Locals who downloaded the Chivo bitcoin wallet were gifted with $30 worth of bitcoin, which they were free to spend at merchants, which in turn are expected to accept the cryptocurrency as a payment method.

Bitcoin Magazine journalist Aaron van Wirdum put it to the test, walking into a McDonald’s in the city of San Salvador to buy breakfast with bitcoin. He documented how not only did the restaurant accept his bitcoin, but they used the Lightning Network to complete the transaction. Select El Salvador merchants are using Flexa-fueled Lightning payments for speedy bitcoin transactions.

El Salvador’s bitcoin debut may have been soured by the market sell-off, but based on the latest technical and fundamental analysis, it might not be long before the bulls are back in charge.

AMC’s Stock Soars After Record-Setting Holiday Weekend

Labor Day weekend was a success for AMC Entertainment, and the good vibes are spilling over to the movie chain’s stock price. More than 2 million movie-goers attended U.S.-based AMC theatres over the holiday weekend, which smashed the company’s old sales record from eight years ago, as pointed out by CEO Adam Aron. AMC attracted about 800,000 movie-goers to its international theaters across Europe and the Middle East.

AMC Milestone

In addition, AMC’s theater attendance has risen to above pre-pandemic levels, which is a barometer that corporate America continues to strive to surpass. Aron gave credit to Disney’s superhero film “Shang-Chi and the Legend of the 10 Rings,” a Marvel Studios creation. The movie generated more than $90 million in ticket sales, according to early estimates.

Aron stated in a press release that the blockbuster weekend has been “an important milestone” as they “steadily work to generate a recovery” for the business.  He expects the momentum to continue, noting that “as Hollywood releases movies, Americans eagerly want to return to movie theatres again.”

AMC Stock

Investors rewarded the stock, sending shares of AMC Entertainment close to 9%, catapulting the stock closer to the $50 level once again, a level it has not seen since July. Investors cheered the rally, which got an extra boost in about the last hour of trading.

According to financial analytics firm Ortex, the tally for short positions on AMC’s stock was $4.26 billion as of Sept. 1, which triggered losses of more than $1.2 billion from late August.

AMC shares are trading below their high of more than $70 reached in June, but they are up 2,300% year-to-date. The stock has been trading largely based on social media sentiment surrounding the meme stock. As AMC’s fundamentals continue to improve, however, its valuation might become more convincing.

One catalyst for the movie chain is its plan to begin accepting bitcoin payments by the end of the year. The movie has already drummed up excitement in the cryptocurrency crowd that has spilled over to Dogecoin, whose fans are hoping that AMC will also consider adding Doge payments. No word on whether Adam Aron plans to follow in Tesla’s footsteps and add bitcoin to the company’s balance sheet.

Panama Touts Bitcoin and Ethereum in New Crypto Law

Central America’s bitcoin adoption is on the rise, with Panama the latest country to flock toward cryptocurrencies. The development has unfolded on the very same day that El Salvador officially accepts bitcoin as legal tender. Now the Republic of Panama is moving in the same direction but is putting its own personal touch on the roll-out by also embracing Ethereum and other cryptocurrencies as well.

Panama has unveiled a cryptocurrency law in draft form, as announced by Congressman Gabriel Silvaon Twitter. Similar to El Salvador, Panama wants to make bitcoin as well as Ethereum more popular as a payment method. Panama’s lawmakers also want to support the use of the blockchain in the public sector as well as use the technology in its banking sector.

The bill explains how Panama is compatible with the digital economy, including the blockchain crypto assets and the internet. The bill roughly states,

“Today we present the Crypto Law. We seek to make Panama a country compatible with the blockchain, crypto assets, and the internet. This has the potential to create thousands of jobs, attract investment and make the government transparent.”

Prices Under Pressure

Despite wider-scale adoption of bitcoin and Ethereum, most of the broader cryptocurrency market is trading in the red today. The bitcoin price continues to hold $50,000, while Ethereum could be gearing up for a run toward $4,000.

Crypto Assets

The draft legislation touts bitcoin as a hedge against inflation and points to its divisible nature, saying that it can be “subdivided into 100 million Satoshis” as an example. It also acknowledges other cryptocurrencies including Ethereum and Cardano for similarly being divisible into more assets than traditional investments lend themselves to.

On social media, users were quick to point to the fees associated with Ethereum transactions in particular. The average Ethereum transaction fee currently hovers at just under $40, compared to more than $50 in early September.

Panama is keeping it loose and is not requiring merchants to adopt bitcoin or any other cryptocurrency. That was a key criticism of El Salvador’s bitcoin roll-out, in that merchants and consumers alike felt forced to suddenly adopt bitcoin as the currency.

According to Silva cited by a local publication, Telemetro, the new bill “does not oblige and does not seek to impose digital currency, or forced means of payment, but the freedom to use cryptocurrencies such as Bitcoin or Ethereum.” This could make all the difference so that Panama avoids the protests that broke out in El Salvador amid a lack of understanding about bitcoin.

Bitcoin Bulls in Control Ahead of El Salvador’s Crypto Debut

The world is watching as El Salvador prepares to adopt bitcoin as a legal currency on Sept. 7. El Salvador already accepts the U.S. dollar, and bitcoin will be integrated alongside the fiat currency.

As the Central American nation prepares for the transition, the bulls are clearly in charge in the bitcoin market. The bitcoin price is perched above the $51,000 threshold and climbing as the leading cryptocurrency inches closer to its all-time high. The Salvadoran population has mixed feelings about adopting such a volatile asset as legal money.

Fear and Uncertainty

Since El Salvador’s Congress decided to make bitcoin legal tender in June, the country has become a first-mover in its own right. Nonetheless, the move has been met with opposition in the country, with hundreds of people protesting the integration of bitcoin for fear of the unknown.

Given the volatility that is inherent with the bitcoin price, many Salvadorans are uncomfortable about the risks involved. This traces back to a lack of education provided by the government on the cryptocurrency market before jumping into bitcoin.

The Financial Times spotlighted one local, Ricardo López, who works as a chauffeur and has mixed feelings about accepting bitcoin as payment. López pointed to the wild swings in the bitcoin price, saying that if he decides to take it, he plans to convert it into U.S. dollars.

Even if it takes time, the integration of bitcoin into the economy is expected to support wide-scale adoption. Jay Hao, who is at the helm of cryptocurrency exchange OKEx, points to Article 13 of the new legislation. It states that “all obligations in money expressed in USD…may be paid in bitcoin,” which  he says will be a “game-changer.”

Source: Twitter

Bitcoin Adoption

Those who are willing to accept and transact in bitcoin will have an incentive to do so. El Salvador’s government has introduced a new digital wallet dubbed Chivo that the available for download in the country. The wallet comes with $30 worth of free bitcoin.

The Chivo wallet will also make it possible for El Salvador’s citizens to receive cross-border remittances in bitcoin without having to pay the higher fees associated with money-transfer companies. The recipients then have the option to keep the BTC in the wallet or convert the funds into U.S. dollars at one of the hundreds of bitcoin ATMs that are being installed throughout the country.

Other Latin American countries are taking a page out of El Salvador’s book and are looking to integrate bitcoin into their economies. Cuba, for instance, has announced plans to regulate the leading cryptocurrency.

Match Shares Jump on S&P 500 Addition

The S&P 500 index has met its match. Online dating site Match is getting added to the broader stock market index, and its shares are soaring 9% in response during extended-hours trading. The stock took investors on a wild ride over the summer but is just about flat year-to-date. The changes in the S&P 500 are part of the index’s quarterly shufflings based on the latest market activity.

In & Out Index

S&P Dow Jones Indices announced that Match Group will replace the outgoing Perrigo Company, the latter of which will move to the S&P MidCap 400 index. In addition to Match Group, other newcomers to the S&P 500 index include insurer Brown & Brown and IT company Ceridian HCM Holding.

The Match stock bump could have something to do with the fact that index funds that track the S&P 500 must gain exposure to the stock by design. In order for Match as well as Brown & Brown and Ceridian to keep their spots, they must maintain a minimum market cap of $13.1 billion. Match shouldn’t have any trouble as it currently boasts a market cap of $41 billion.

Going Steady

One of the companies that the trio of new S&P 500 members beat out was meme stock GameStop. The video game retailer recently joined the S&P MidCap 400 Index, and with a market cap of $15 billion could technically qualify for the S&P 500. The sticking point for GameStop, however, is its inherent volatility as a meme stock. S&P Global tends to select names that are more predictable in nature, such as insurance stock Brown & Brown.

Shares of Brown & Brown are up nearly 2% in after-hours trading on the index development. Year-to-date, the dividend-paying stock is up 24%. In the same period, GameStop’s stock is up more than 900%. Ceridian, the third stock to be added, tacked on just over 1% in after-hours trading on the index development.

Match is poised to generate revenues of $3 billion-plus this fiscal year. The company is among those to benefit from Apple’s recent decision to change its App Store fine print so that subscription-based companies can keep a larger piece of the sales pie. Match, which owns the popular dating app Tinder, is behind Tinder subscriptions tiers Tinder Plus, Tinder Gold and Tinder Platinum.

Dogecoin Fundamentals Look Up as Elon Musk Touts Update

The Dogecoin community has had a lot to celebrate lately. Doge is hovering near the USD 0.30 level at the start of September after rising 35% last month. Now that the Dogecoin team has released its latest update, fundamentals could be driving the price more than usual for this meme coin.

The “Dogecoin Developers” Twitter account announced the 1.14.4 release for all users, especially miners. According to Billy Markus, co-founder of Dogecoin, it’s most useful for miners to download the update because they are the ones who “put transactions into the blocks they mine.”

Update Details

It is a minor update but introduces several improvements to the cryptocurrency. According to Dogecoin’s Twitter account, these enhancements include:

  • Facilitating lower fees, which will make it more attractive to users.
  • Bolstering synchronization time up to 2.5x, enabling speedier transactions.
  • “RPC ‘getpeerinfo’ improvements”
  • “GUI options to add peers and import private keys, and peer traffic visibility”
  • Better security

Tesla CEO Elon Musk, who is working with Dogecoin developers to bolster “transaction efficiency,” applauded the progress.

Mainstream Adoption

Never one to be outdone by bitcoin, the Dogecoin community wants to hop on the Twitter bandwagon for payments. Twitter is reportedly in the process of adding bitcoin payments to its Tip Jar feature, which has the potential to catapult the biggest cryptocurrency further into the mainstream. Dogecoin investors are looking to get on Twitter CEO Jack Dorsey’s radar and have their favorite meme coin included too.

No word if Dorsey, a known bitcoin bull, will budge. There is no question, however, that cryptocurrencies have been moving closer to wide-scale adoption.

Most recently, famous actress Reese Witherspoon announced on Twitter that she “just bought her first ETH.” Her tweet drew tens of thousands of likes and thousands of comments, largely from inside the cryptocurrency community, welcoming her to the party and wanting to know if she owns any bitcoin.

Witherspoon bought Ethereum as the second-biggest cryptocurrency has been on a bull run, thanks largely to the popularity of non-fungible tokens (NFTs) and the rise of DeFi. Incidentally, an NFT of the Dogecoin mascot Doge, which is a Shiba Inu breed of dog, sold as an NFT for $4 million.

Five Below’s Stock Price Gets Punished After Sales Miss

With inflation rearing its head in the economy, discount retailers should be poised to benefit. Value retailer Five Below sells most of its items for below $5, as the name suggests, though due to inflation some prices are higher. While the retailer is poised to benefit from the uncertain economic environment, investors chose to see the glass half empty.

Five Below’s stock suffered a 13% decline on Thursday after the company reported weaker than expected Q2 sales. Five Below’s net sales came in at $646.6 million, falling shy of the $648 million Wall Street was expecting.

While Five Below missed expectations, its net sales were up more than 51% vs. year-ago levels at the height of the pandemic. Net income was up nearly 125% year-over-year (YoY) to $64.8 million. And according to CEO Joel Anderson, sales are looking up for the current quarter. He stated,

“The third quarter is off to a strong start from a sales perspective.”

Bullish Price Target

Investors punished the stock anyway. According to one analyst firm, now might be the time to stock up on Five Below shares. Wall Street firm Jefferies believes the stock was overly punished and that investors should seize the opportunity and buy more shares.

The Jefferies analysts wrote that the sales only “slightly” missed consensus estimates and besides, the pandemic has made it tricky to use prediction models anyway. Instead, the analysts say to focus on the positive, rising comparable-store sales, more retail locations and a solid Q3 forecast. Five Below opened more than 30 new stores in the quarter, up 14.2% YoY.

After Thursday’s selling, Five Below shares are hovering at $187. Jefferies analysts are bullish on the stock and have a $300 price target attached.

Five Below’s Q2 was solid based on year-ago results, except for the fact that it missed sales estimates. The company’s partnership with Instacart for same-day delivery should be a boon for margins similar to how the ship-from-store model has benefited other retailers such as Dick’s Sporting Goods. Five Below recently expanded that service to more stores.

For investors who are interested in the long-term outlook, Five Below is a growing company that appears to have the economic winds at its back for the foreseeable future.

Vitalik Buterin Wants to See Dogecoin Adopt PoS

Meme coin Dogecoin might be a “cryptocurrency like bitcoin,” but Vitalik Buterin hopes it will resemble something closer to Ethereum one day. The Ethereum co-founder opened up a Twitter thread Q&A to the accounts he follows on the social medium platform, and the topics of discussion ran the gamut.

One of his followers, Zhu Su of 3ac, wanted to hear Buterin’s thoughts on the popular meme-coin project Dogecoin. Buterin is no stranger to Dogecoin. In fact, he was recently named as an advisor on the recently reestablished Dogecoin Foundation board. So when he was asked about the meme-coin project, it is no surprise that Buterin addressed the one theme that is expected to catapult the blockchain he architected, Ethereum, to another level — the proof-of-stake (PoS) consensus algorithm.

PoS Model

Ethereum is in the process of transitioning from a proof-of-work (PoW) to a PoS model, which will provide greater scalability and lead to lower fees on the network. Dogecoin is a PoW cryptocurrency that uses electricity for mining new coins.

Energy consumption is a sticking point in the cryptocurrency industry, a topic that came to the forefront after Tesla CEO Elon Musk addressed it. For his part, Musk recently revealed that he is working alongside Dogecoin developers to make the crypto more environmentally friendly.

Buterin’s hope is that “Doge can switch to PoS soon,” suggesting that it could even use the Ethereum code.

Staking for Rewards

While Ethereum is still moving to PoS, holders of the Ether token are already staking — or pledging their coins for a specified period of time to bolster the security of the network in exchange for interest on their holdings. If Dogecoin were to adopt a similar model, demand for the cryptocurrency could potentially increase even further, sending the price higher in the interim.

‘Much Good’

Vitalik Buterin would also like to see Dogecoin, which is known for two-word phrases such as ‘Much Wow,’ use its foundation for more good. He pointed to Dogecoin’s annual inflation of 5 billion coins, saying that instead of canceling it in a PoS world, the project should instead redirect the coins to a “DAO that funds global public goods,” pointing to the project’s “non-greedy wholesome ethos.” Now that he is on the board, it seems that Buterin might have some pull to achieve just that.