While crypto offers banks an opportunity to generate new sources of revenue, Fitch warns it could bring risks that could lead to rating revisions. International credit rating agency Fitch Ratings has warned that it may reassess US banks with “significant” cryptocurrency exposure negatively. In a report posted on Sunday, Fitch Ratings argued that while crypto integrations can boost fees, yields and efficiency, they also pose “reputational, liquidity, operational and compliance” risks for banks. “Stablecoin issuance, deposit tokenization and blockchain technology use give banks opportunities to improve customer service. They also let banks leverage blockchain speed and efficiency in areas such as payments and smart contracts,” Fitch said, adding: Read more
Bitcoin's rejection at the short-term range highs is caused by macroeconomic uncertainty, liquidations and stagnant spot ETF flows. Will clearer signals from the US economy boost BTC volumes? Key takeaways: Economic uncertainty, a delayed jobs report and weakness in the housing market are causing traders to retreat from Bitcoin. Pro traders are incurring high costs to protect against Bitcoin price drops, while in China, stablecoins are being sold at a discount to exit the crypto market. Read more
Improving retail crypto and TradFi investor sentiment align with the recent uptick in Bitcoin price, but sell orders and short positions in the $93,000 range threaten to cap the rally. Over the past two weeks, Bitcoin price repeatedly revisited the $90,000 range as retail investor sentiment improved, fund managers restated their bullish expectations for a potential end-of-year rally, and Strategy announced a sizable BTC purchase. According to VanEck head of digital asset research, Matthew Sigel, Bernstein wrote that “the Bitcoin cycle has broken the 4-year pattern (cycle peaking every 4 years) and is now in an elongated bull-cycle with more sticky institutional buying offsetting any retail panic selling.” Bernstein’s comments follow BlackRock chair and CEO Larry Fink mentioning that sovereign wealth funds are “incrementally” buying Bitcoin as it “has fallen from its $126,000 peak.” Read more
Speaking in Abu Dhabi, the Strategy CEO said nations could use Bitcoin reserves and tokenized credit markets to offer regulated accounts with higher yields. Michael Saylor, CEO of the world’s largest Bitcoin treasury holder, is pushing nation-states to develop Bitcoin-backed digital banking systems that offer high-yield, low-volatility accounts capable of attracting trillions of dollars in deposits. Speaking at the Bitcoin MENA event in Abu Dhabi, Saylor said countries could use overcollateralized Bitcoin (BTC) reserves and tokenized credit instruments to create regulated digital bank accounts that offer higher yields than traditional deposits. Saylor noted that bank deposits in Japan, Europe and Switzerland offer little to no yield, while euro money-market funds pay roughly 150 basis points, and US money-market rates are closer to 400 basis points. He said this explains why investors turn to the corporate bond market, which “wouldn’t exist if people weren’t so disgusted with their bank account.” Read more
CoreWeave plans a $2 billion convertible note offering as it scales AI infrastructure, following a yearlong pursuit of Core Scientific for added power capacity. AI infrastructure provider CoreWeave (CRWV) plans to raise $2 billion through a private offering of convertible senior notes due 2031, with proceeds earmarked for general corporate purposes and for capped-call transactions that could reduce potential future shareholder dilution. The notes include an option for purchasers to buy an additional $300 million, the company said Monday. They can be settled in cash, shares or a combination of both at CoreWeave’s discretion. To limit dilution if the notes are ultimately converted into equity, CoreWeave is entering into capped-call transactions. This hedge increases the effective conversion price and provides a degree of protection for existing shareholders while preserving financial flexibility. Read more