Charles Morgan Half Of All Bitcoin Trading Is Fake | Sam Bankman-Fried Eyeing Acquisitions

MAKINGS OF CRYPTO EMPIRE

While the cryptocurrency market is still reeling, FTX, the Bahamas-based crypto exchange led by billionaire Sam Bankman-Fried, is on the prowl again. A leaked investor presentation touting the young company’s explosive growth indicated that the exchange had roughly $2 billion in cash. But why was FTX meeting with investors and trying to raise capital if its business is churning out profits and its coffers are already flush? According to people familiar with its business, FTX is likely preparing for acquisitions –possibly much larger than the dozens of investments it and its venture arm have made in the last 18 months. Any new acquisition would come on top of an already-busy past few months for Bankman-Fried, who has been aggressive in lending to distressed crypto companies and struck a deal with crypto lender BlockFi that gives FTX the option to buy it.”    

BITCOIN DEPOT IS NOT INTIMIDATED BY SPAC COLLAPSES  

Cryptocurrency ATM firm Bitcoin Depot has reached a deal with a special-purpose acquisition company (SPAC), Nasdaq-listed GSR II Meteora Acquisition, which would take it public, the company announced on Thursday. According to the announcement, the combined company will have an estimated equity value of $885 million but the terms of the transaction are riddling. The proceeds from the transaction will consist of up to $321 million in cash that will be used to “support Bitcoin Depot’s working capital, complete acquisitions and scale its platform and suite of products” and up to $170 million will be distributed to selling equity holders and towards covering the expenses. The deal is noteworthy because Bitcoin Depot claims to have the largest network of bitcoin ATMs in North America, with more than 7,000 operational kiosks, and it comes amid a major downturn for the cryptocurrency market and SPACs.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on August 25, 2022.

ETHEREUM MERGE ADDS PRESSURE ON NVIDIA

Nvidia’s demand woes are persisting into the current quarter, the company revealed Wednesday, following weak second-quarter results and ahead of an expected sharp drop in demand for its semiconductors from cryptocurrency miners. The provider of graphics chips used in computer games as well as for Ethereum mining, projected sales of $5.9 billion for the third quarter, with a 2% margin of error, down from $7.1 billion in the comparable period of 2021. Those sales will be less profitable, with gross margin projected to fall to 62.4% from 65% last year.

While the company faces macroeconomic pressure that includes the war in Ukraine and Covid-19 lockdowns in China, it is also beset by the planned Ethereum upgrade that will change the mechanism for processing transactions on the blockchain and sharply reduce the need for its chips. Nvidia said second-quarter revenue came in at about $6.7 billion, 17% below a May forecast though up 3% from the comparable 2021 period, with the miss primarily related to reduced demand for its graphics chips from makers of gaming hardware.

BLOCKCHAIN 50 SPOTLIGHT

Tencent: Over the past decade, Tencent has built a Chinese super app, used by more than 1 billion people for everything from gaming and social media to messaging and shopping. Now it’s developing a one-stop blockchain platform, Tencent Cloud Blockchain. Ten provinces and cities, including Hainan, Guangdong and Beijing, already use it to issue millions of electronic bills for health care and transportation services.  

ELSEWHERE

Ethereum Foundation Confirms Date For Long-Awaited Merge Upgrade [Decrypt]

Crypto’s Massive Marketing Efforts Have Drawn Few New Investors [The Washington Post]

Alameda Research Co-CEO Trabucco Resigns [The Block]  

Nina Bambysheva
Reporter
Forbes Money & Markets

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