Katherine Ross

Reddit made its public debut Thursday.



The social media company began trading at $47, after it priced at $34 as announced Wednesday night. Shares quickly jumped over $57 before settling around $50 at time of publication.&nbsp;



The pricing puts the valuation of the company at around $6.5 billion. The stock trades under the ticker RDDT.



The company has a storied history with cryptocurrencies including its iconic subreddits from r/Cryptocurrency to r/Bitcoin, which are both ranked within the top 100 subreddits.&nbsp;



There is also, of course, r/WallStreetBets, though the focus isn’t primarily crypto.&nbsp;



Read more: <a href="https://blockworks.co/news/crypto-subculture-x-reliance">If we want crypto to succeed, we’ve got to give X the boot</a>



Earlier this year, in a publicly filed S-1, Reddit disclosed that — outside of some crypto initiatives — it held bitcoin and ether “for treasury purposes,” and also held an undisclosed amount of MATIC, Polygon’s native token.&nbsp;



Both ether (<a href="https://blockworks.co/price/eth">ETH</a>) and bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) carved out slight gains on Thursday, with ETH hovering around $3,400 and bitcoin around $65,000.



r/CryptoCurrency’s native token, MOON, was up around 7% in the last 24 hours, according to data from CoinGecko, by the time <a href="https://blockworks.co/tag/reddit">Reddit</a> opened for trading. The token is trading at around $0.44. Moons are ERC-20 tokens, which are community points used to reward contributions to the subreddit — like commenting.&nbsp;



Just last month, Celer <a href="https://www.reddit.com/r/CryptoCurrency/comments/1amzlrd/celer_is_partnering_with_rcryptocurrency_to/">announced</a> that it would support Moons, which would allow Moons to be bridged to Arbitrum One.&nbsp;



Read more: <a href="https://blockworks.co/news/reddit-invests-btc-eth">Reddit says it invested ‘excess cash reserves’ in bitcoin, ether</a>



Last October, Reddit announced that it was <a href="https://blockworks.co/news/reddit-community-points-ethereum">sunsetting the Community Points beta program</a>. The company said that the uncertain regulatory landscape, tied with the “scalability limitations,” led to the social media giant’s decision.



“Though we saw some future opportunities for Community Points, there was no path to scale it broadly across the platform,” Reddit user u/cozy__sheets, who is part of the Community team, <a href="https://www.reddit.com/r/CryptoCurrency/comments/17a33ql/serious_sunsetting_community_points_beta_and/">wrote</a> at the time.



In other crypto forays, Reddit, last July, announced that it was dropping another collection of its Collectible Avatars. The NFTs are Polygon-based and made Reddit one of the biggest companies to be <a href="https://blockworks.co/news/reddit-makes-pfp-nfts-cool-again-marketplace-trading-volume-surges">tied to the NFT space</a>.&nbsp;



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Reddit debuts on NYSE at $47 a share

Reddit could trade later this month, according to reports.&nbsp;



The company, which released its S-1 late last month, is reportedly looking to price on March 20, meaning it could trade as soon as the next day, <a href="https://www.ft.com/content/b3199303-d419-482d-96c7-e73c0b0ee8ed">according</a> to the Financial Times.&nbsp;



Reddit is looking to price between $31 and $34 a share, the report added. Those prices would mean a valuation of around $6.5 billion.



Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-01-07/reddit-is-said-to-tap-morgan-stanley-goldman-sachs-for-ipo">reported</a> in 2022 that the company’s valuation could be as high as $15 billion.&nbsp;



The company will list its shares on the New York Stock Exchange under the ticker RDDT. The company’s public debut is expected to be highly anticipated. The company even warned in its S-1 that the stock “may be volatile or may decline significantly or suddenly regardless of our operating performance.” Such a warning is not uncommon in a regulatory filing, however.&nbsp;



Read more: <a href="https://blockworks.co/news/sec-delays-bitcoin-etf-options-proposals">SEC postpones decisions on bitcoin ETF options proposals</a>



Last month, Reddit filed its S-1, <a href="https://blockworks.co/news/reddit-invests-btc-eth">which revealed that the company holds</a> ether (<a href="https://blockworks.co/price/eth">ETH</a>), bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) and Polygon’s native token (<a href="https://blockworks.co/price/matic">MATIC</a>). The S-1 clarified that it spent excess cash reserves on BTC and ETH and continues to hold both for “treasury purposes.” It received MATIC from “sales of virtual goods” but added that both the MATIC and ETH gained from such sales were immaterial for 2022 and 2023.&nbsp;&nbsp;



“Our investments in cryptocurrencies for treasury purposes are limited to bitcoin, ether, and any other cryptocurrency that the [Securities and Exchange Commission], Commodities Futures Trading Commission or high-ranking members of the staff of such regulatory bodies may, through public statements or guidance, identify as likely not being a security,” the company said.



The SEC, in its suits against both Binance and Coinbase, named <a href="https://blockworks.co/news/coinbase-binance-suits-different">MATIC as a token that it believes qualifies as a security</a>.&nbsp;



<a href="https://blockworks.co/tag/reddit">Reddit</a>’s S-1 added that the company believes both crypto and blockchain technology have “significant potential.” But it did warn that “the popularity and prevalence of cryptocurrencies is a relatively recent trend, and whether cryptocurrencies and blockchain technology will continue to be adopted by consumers and businesses in the long term is uncertain.”



Read more: <a href="https://blockworks.co/news/defi-needs-institutions-regulation">DeFi needs institutions — and regulation&nbsp;</a>



Reddit experimented with Ethereum-based Community Points before <a href="https://blockworks.co/news/reddit-community-points-ethereum">shuttering the program last year</a>.&nbsp;



“Though we saw some future opportunities for Community Points, there was no path to scale it broadly across the platform,” Reddit user u/cozy__sheets, who is part of the Community team, <a href="https://www.reddit.com/r/CryptoCurrency/comments/17a33ql/serious_sunsetting_community_points_beta_and/">wrote</a> at the time.



The program was set to take place at the end of last year. Reddit cited an uncertain regulatory landscape and “scalability” limitations.



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Reddit eyes late March debut on NYSE: FT

Circle is looking to go public in the US.



The company announced that it had filed the draft registration statement for an initial public offering in the US in a press release.&nbsp;



Circle, in the release, said the IPO is “expected to take place after the Securities and Exchange Commission completes its review process, subject to market and other conditions.”



“The number of shares to be offered and the price range for the proposed offering have not yet been determined,” the press release continued. Reuters first reported the news.



Back in November of last year, Bloomberg reported that the company behind the USDC stablecoin was interested in pursuing an IPO. The media outlet cited unnamed sources at the time.&nbsp;



This isn’t the first time that Circle’s sought or expressed interest in taking its company public on the US markets. The company previously sought to go public through a special purpose acquisitions company, another route to becoming public that was briefly popular throughout 2020 and 2021.



However, the company <a href="https://blockworks.co/news/circle-kills-spac-plans">abandoned its plans after the collapse of FTX</a> in November 2022.



Read more: <a href="https://blockworks.co/news/circles-public-listing-plans-undeterred">Circle’s public listing plans undeterred by latest SEC actions</a>



“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” CEO Jeremy Allaire said at the time.&nbsp;



In August, the company announced that Coinbase would take a stake in Circle.&nbsp;



Coinbase also committed to the “long term success of UDC,” with Circle controlling the issuance and governance of the stablecoin.&nbsp;



USDC is the second-largest stablecoin by supply, with $25.2 billion to Tether’s $94.6 billion.



Updated Jan. 11, 2024 at 8:42 am ET: Added context.



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Circle confidentially files for US IPO

Ben Strack

<div id="highlights-block_6259bfba81a9a" class="highlights">
 <ul>
 <li>Stronghold’s IPO statement omitted to flag potential difficulties obtaining miners, law firm alleges</li>
 <li>The mining company reported a fourth-quarter net loss of $17.5 million</li>
 </ul>
 
</div>



A class action lawsuit against Stronghold Digital Mining is brewing after the company reported fourth quarter earnings results that fell short of expectations.&nbsp;



The company, which converts coal waste into energy to mine bitcoin, <a href="https://cms.blockworks.co/stronghold-digital-mining-ipo-opens-55-8-above-expected-stock-price/" target="_blank" rel="noreferrer noopener">went public in October</a>. Stronghold sold 7,690,400 shares of Class A common stock at a price of $19 per share as part of its initial public offering (IPO), receiving net proceeds of approximately $132.5 million.



Stronghold was set to use proceeds from the IPO for general purposes, including acquisitions of miners and power-generating assets to mine more bitcoin, according to an SEC <a href="https://www.sec.gov/Archives/edgar/data/0001856028/000156459021050660/sdmi-s1a.htm" target="_blank" rel="noreferrer noopener">filing</a>.



But the IPO&#8217;s registration statement was “materially false and misleading,” according to a Friday statement by law firm Robbins Geller Rudman &amp; Dowd LLP.



The law firm alleges that the statement did not mention that contracted suppliers were likely to miss anticipated delivery quantities and deadlines, and that Stronghold would experience difficulties obtaining miners outside of confirmed purchase orders.



If included, such information may have alerted investors of the “significant risk” that Stronghold would not expand its mining capacity as expected and likely experience losses, the firm argued in the statement.



A Stronghold spokesperson did not immediately return Blockworks’ request for comment. 



Stronghold’s 2021 fourth-quarter adjusted earnings-per-share showed a loss of $0.52 a share, the company <a href="https://cms.blockworks.co/stronghold-loses-25-after-hours-as-q4-earnings-revenue-miss-mark/" target="_blank" rel="noreferrer noopener">reported last month</a>. It posted a fourth quarter net loss of $17.5 million.



CEO Gregory Beard said during the firm’s latest earnings call that the results are “not representative of the potential we aim to deliver.”



Stronghold executives attributed the losses to delivery delays, noting that it received roughly 3,300 of the total 15,000 miners ordered from Canada-based MinerVa Semiconductor Corp, despite a delivery deadline of Dec. 31, 2021.



The stock price fell roughly 32% following the earnings report, according to Robbins Geller Rudman &amp; Dowd.



Anybody who bought Stronghold’s stock in connection with the IPO may seek to become the lead plaintiff, who will act on behalf of all other class members of the suit. Lead plaintiff motions must be filed with the court by June 13. 



The class action lawsuit against Stronghold, which commenced Thursday, charges the company and some of its top executives, as well as the IPO&#8217;s underwriters.



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Stronghold Mining Faces Lawsuit Over Earnings Miss

Michael Bodley

<div id="highlights-block_61f8672b1acbf" class="highlights">
 <ul>
 <li>Aurox operates a crypto trading platform that’s akin to a Bloomberg terminal for digital assets</li>
 <li>The company, founded in 2020, now has more than 60,000 registered traders</li>
 </ul>
 
</div>



Cryptocurrency trading platform Aurox is the latest digital asset company to eye an initial public offering.&nbsp;



The plan is for the company to go public in the fourth quarter of this year — though it could happen sooner — Chief Executive Officer Giorgi Khazaradze told Blockworks. Options on the table include tapping investment banks to underwrite a traditional listing, merging with a SPAC, undergoing a reverse merger or going the direct listing route.



Advisors to the company have suggested a listing on the Nasdaq, given Aurox’s technology-heavy makeup, but the company could list on another stock exchange.&nbsp;



Aurox is an anomaly when it comes to crypto startups in that the business. Founded in 2020, it is entirely self-funded, having taken in no venture capital dollars. Khazaradze said the often hefty equity demands imposed by venture capital firms have not been an attractive source of funding for the company.&nbsp;



<div class="wp-block-image"><figure class="alignright size-medium"><img loading="lazy" decoding="async" width="266" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg" alt="Giorgi Khazaradze" class="wp-image-16299" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=266 266w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=910 910w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=1364 1364w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=228 228w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=232 232w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=195 195w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=71 71w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=44 44w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Image-266x300.jpeg?w=1368 1368w" sizes="(max-width: 266px) 100vw, 266px" /><figcaption>Giorgi Khazaradze</figcaption></figure></div>



“(Venture capitalists) have so many [stipulations] that they might as well control the company,” he said. “So, you might as well give them 51 percent at that point.”



The company operates what is essentially a Bloomberg terminal for crypto, including support for decentralized finance (DeFi) projects, and oversees its own token. Trades on the platform, which has ties to a number of exchanges, are executed via smart contracts — forming essentially a prime brokerage model for routing DeFi trades. Aurox takes a percentage on every trade made on the platform.



“The more DeFi gets involved into the traditional financial side, the more people will get educated, and the more eyes will come into the DeFi sector of cryptocurrency,”&nbsp; Khazaradze said.



The company now consists of about 20 employees, with plans to hire two or three more developers in short order.&nbsp;



Aurox now has about 60,000 crypto traders the company counts as users, with trading volume eclipsing $600 million last year.&nbsp;



The firm has also explored developing proprietary crypto trading strategies based around high-frequency trading models that could be opened up to outside investors as a hedge fund down the line.



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Crypto Trading Terminal Taking Steps Toward Public Listing

Jacquelyn Melinek

<div id="highlights-block_6170603c9df82" class="highlights">
 <ul>
 <li>“Unlike traditional Bitcoin or crypto miners that seek out cheap power, what we really looked for was a way to enhance and sustain the power business by utilizing cryptocurrency,” William Spence, co-chairman at Stronghold, said in an interview with Blockworks</li>
 <li>The company has about 3,000 crypto miners and plans to gain an additional 26,150 miners from three suppliers by the end of 2022</li>
 </ul>
 
</div>



Stronghold Digital Mining, a crypto mining company that converts coal waste into energy to mine bitcoin, began trading after its initial public offering (IPO) launched on the Nasdaq Global Market Wednesday.



The company’s IPO priced in 55.8% higher than the anticipated range between $16 and $18 price per share with an opening price of $26.50 under the ticker $<a href="https://www.cnbc.com/quotes/SDIG?qsearchterm=SDIG" target="_blank" rel="noreferrer noopener">SDIG</a>. The bitcoin-friendly mining company’s stock price rose as much as 67.8% following its IPO launch at Nasdaq on Wednesday. The stock was up $10.89, or 57.32%, to $29.89 as of 2:40 pm ET.&nbsp;



Although this is an IPO, it comes at a time when the US Securities and Exchange Commission has approved the <a href="https://cms.blockworks.co/proshares-bitcoin-futures-based-etf-to-begin-trading-tuesday/" target="_blank" rel="noreferrer noopener">ProShares Bitcoin Strategy ETF</a> (BITO), marking a milestone for the crypto community as it receives the first government-approved Bitcoin ETF in the US.&nbsp;



As crypto regulation remains a hot topic, Stronghold isn’t worried about regulators, but actually worked with them to launch their IPO, Gregory Beard, co-chairman and CEO of Stronghold said in an interview with Blockworks after the IPO launch.&nbsp;



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="500" height="333" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg" alt="" class="wp-image-9658" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=500 500w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2021/10/mo_101821-218.jpg?w=80 80w" sizes="(max-width: 500px) 100vw, 500px" /><figcaption>The Stronghold Digital Mining Team and their families.</figcaption></figure></div>



“Crypto mining has not been the focus of the regulators from our perspective. I don’t feel like we have regulatory risk, given that we are not acting with a financial capacity with the general public,” Beard said.&nbsp;



Beard believes that it’s still early for adoption of bitcoin as a transaction, but it has already been well established as a store of value. The company has about 3,000 crypto miners and plans to gain an additional 26,150 miners from three suppliers by the end of 2022.&nbsp;



“Regulation has some appeal to us because we do a professional business in a legitimate manner and if anything I feel like we’re helping to legitimize this infant industry,” William Spence, co-chairman at Stronghold, said during the interview with Blockworks.&nbsp;



The bitcoin-focused mining company is better known for its environmentally-friendly tactics of using waste coal material to power crypto mining equipment through specialized technology at the company’s power generation facility, Blockworks previously <a href="https://cms.blockworks.co/bitcoin-based-stronghold-digital-mining-expects-valuation-around-1b-ahead-of-ipo/" target="_blank" rel="noreferrer noopener">reported</a>.&nbsp;



“We think that the future of (crypto) mining is integration with power,” Beard said.&nbsp;



The company is anticipating expansion to two more plants with its acquisition of the Panther Creek Energy Facility back in <a href="https://cms.blockworks.co/stronghold-digital-mining-raises-74m-plans-to-buy-second-power-plant/" target="_blank" rel="noreferrer noopener">August</a>, as well as recent plans to acquire another plant.&nbsp;



“Unlike traditional Bitcoin or crypto miners that seek out cheap power, what we really looked for was a way to enhance and sustain the power business by utilizing cryptocurrency,” William Spence, co-chairman at Stronghold, said during the interview with Blockworks.&nbsp;



Stronghold will use proceeds from the IPO for general purposes, including acquisitions of miners and power generating assets to mine more bitcoin, a US Securities and Exchange Commission <a href="https://www.sec.gov/Archives/edgar/data/0001856028/000156459021050660/sdmi-s1a.htm" target="_blank" rel="noreferrer noopener">filing</a> from October 13 stated. 



Casey Wagner contributed to the reporting on this story.

Stronghold Digital Mining IPO Opens 55.8% Above Expected Stock Price

<div id="highlights-block_610436b62b658" class="highlights">
 <ul>
 <li>Apple, Google, Facebook and Amazon would benefit from implementing bitcoin into their mobile apps, MicroStrategy CEO Michael Saylor says</li>
 <li>Firm, which bought nearly 14,000 bitcoins in Q2, will continue buying the asset while steering clear of investments in Ethereum, DeFi </li>
 </ul>
 
</div>



MicroStrategy CEO Michael Saylor said during the firm’s July 29 earnings call that his company will continue to buy and hold bitcoin, a digital property that he noted is “the most compelling technical opportunity of the decade.”



The Virginia-based software company has come to be known as one of the strongest advocates for bitcoin, due in part by how much of the asset it owns. 



MicroStrategy bought 13,759 bitcoins during the second quarter for an average price of $38,467, President and CFO Phong Le, reported. The company ended the quarter with 105,085 total bitcoins held at an average price of $26,080.&nbsp;



Saylor said that the company’s plan is to continue to acquire and hold bitcoin, and plans to focus on educating corporations, institutional investors, regulators and the general public on the benefits of digital property.&nbsp;



A CFO search is under way to allow Le to focus on his role as president, and the new executive’s responsibilities will include leading the effort to buy more of the cryptocurrency.&nbsp;&nbsp;&nbsp;



“There will never be more than 21 million bitcoin, and we feel like there&#8217;s a land grab right now to acquire as much as you can,” Saylor said.



Keep reading for the biggest takeaways from the Microstrategy call.



<h3 class="wp-block-heading">A huge opportunity for world’s largest companies&nbsp;</h3>



Big tech companies could generate $1 trillion of value just by plugging into bitcoin, Saylor said.&nbsp;



Companies like Apple, Google, Facebook and Amazon could implement digital property right into their mobile apps, he added, noting that <a href="https://cms.blockworks.co/jack-dorsey-confirms-square-will-make-bitcoin-hardware-wallet/" target="_blank" rel="noreferrer noopener">Square</a> and <a href="https://cms.blockworks.co/paypal-ceo-smart-contracts-defi-apps-part-of-companys-crypto-plans/" target="_blank" rel="noreferrer noopener">PayPal</a> have already successfully done this.



“By plugging this open protocol, digital property into every corporation, every product, every service, and every government and every agency in the world, you&#8217;re going to make them better,” he said. “You buy bitcoin so that when Apple, Amazon, Facebook, and Google build bitcoin into their product, then you&#8217;re the beneficiary because you can&#8217;t afford to buy Apple, Amazon, Facebook and Google.”



<h3 class="wp-block-heading">Bitcoin and DeFi are different bets</h3>



When asked if MicroStrategy would consider investing in other cryptocurrencies, such as Ethereum, Saylor said the company will remain <a href="https://cms.blockworks.co/microstrategys-saylor-bitcoin-is-apex-achievement-of-humankind/" target="_blank" rel="noreferrer noopener">focused on bitcoin</a>.&nbsp;



Digital currencies used as a medium of exchange aren’t an investment strategy, and platforms and exchanges focused on decentralized finance, such as <a href="https://cms.blockworks.co/coinbase-crypto-market-cap-up-86-ytd-ethereum-passes-bitcoin-on-yoy-growth/" target="_blank" rel="noreferrer noopener">Ethereum</a> and <a href="https://cms.blockworks.co/grayscale-unveils-defi-fund-citing-investor-interest-in-sector/" target="_blank" rel="noreferrer noopener">Uniswap</a> are different types of businesses.&nbsp;



MicroStrategy’s view is that integrating bitcoin into every corporation, product, service, government, as well as any other part of the traditional economy, will make them better, Saylor said.



The firm does not believe the competing theory that innovation is going to come by creating other crypto asset networks in a decentralized area, the CEO added.



“We don&#8217;t wish to express a general opinion or take an investment risk with regard to which platform, which application and which use case of bitcoin will be most successful,” he added. “We think that the least risky, most diversified investment strategy is to simply hold bitcoin.”



<h3 class="wp-block-heading">Hedge funds, biggest tech players to spark greater adoption</h3>



Saylor said during the Thursday call that he expects macro hedge funds to drive the institutional adoption of bitcoin.&nbsp;



“Bitcoin is getting on their radar as digital property … and now they&#8217;ve got a multi-year track record of bitcoin outperforming gold,” he said. “I think that there&#8217;s a lot of money that&#8217;s going to flow from gold funds and investment funds into digital gold — that is bitcoin.”



Paul Tudor Jones, founder and CIO of Tudor Investment Corporation, told CNBC in June that <a href="https://cms.blockworks.co/paul-tudor-jones-likes-bitcoin-as-portfolio-diversifier/" target="_blank" rel="noreferrer noopener">bitcoin is a good portfolio diversifier</a>. He said he was in favor of having 5% of his portfolio invested in bitcoin, alongside 5% each in gold, cash and commodities.



Hedge fund manager Brevan Howard is <a href="https://cms.blockworks.co/hedge-fund-manager-brevan-howard-investing-in-digital-assets/" target="_blank" rel="noreferrer noopener">investing in digital assets</a> and London-based Marshall Wace is reportedly <a href="https://cms.blockworks.co/london-based-hedge-fund-firm-marshall-wace-moves-toward-crypto/" target="_blank" rel="noreferrer noopener">gravitating toward the crypto space</a> amid growing demand among allocators.&nbsp;



In terms of public companies, large founder-led tech players will most enthusiastically embrace bitcoin, Saylor argued, because they have charismatic leaders that are risk takers and understand technical nuance.



“You wouldn&#8217;t want to be the last big tech network to integrate digital property into the protocol because bitcoin turns your billion-user digital communications company into a billion-customer bank in cyberspace,” he added. “They will do it sooner than other publicly traded companies because they get it and because they need to figure it out for competitive reasons.”



A crypto.com <a href="https://crypto.com/images/202107_DataReport_OnChain_Market_Sizing.pdf" target="_blank" rel="noreferrer noopener">report</a> released on Thursday shows that the number of crypto users more than doubled in the first half of 2021 to 221 million users.



<h3 class="wp-block-heading">‘Westernization’ of bitcoin a positive thing</h3>



<a href="https://cms.blockworks.co/china-mining-exodus-seen-as-positive-for-bitcoin/" target="_blank" rel="noreferrer noopener">Like others</a>, Saylor said that he views the bitcoin mining exodus from China amid the <a href="https://cms.blockworks.co/china-expands-2017-crypto-ban-to-include-defi-savings-accounts/" target="_blank" rel="noreferrer noopener">country’s crackdown on crypto</a> as a positive thing.



More miners are moving to America, for example, and Saylor predicts there will be “an avalanche” of <a href="https://cms.blockworks.co/bitcoin-focused-stronghold-digital-mining-files-for-100m-ipo/" target="_blank" rel="noreferrer noopener">publicly traded bitcoin miners</a> continuing to emerge in the next six months or so.



The miners’ movement away from China will also be good for the US dollar and US technology, he asserted.



“Bitcoin is now aligning with the big tech networks from Amazon, from Apple, from Google, from Facebook,” he explained. “These are very, very powerful, dominant digital networks, and whereas they have grown to dominance by offering digital music and digital retail and digital books and digital communications, now we have something new: digital property.”



More large banks in the western world are supporting bitcoin, Saylor added.&nbsp;



Traditional banks are being forced into the crypto space as a way to compete against digital wallets,<a href="https://cms.blockworks.co/mizuho-securities-digital-wallets-poised-to-disrupt-traditional-banks-over-next-decade/" target="_blank" rel="noreferrer noopener"> analysts have said.</a> Most recently, JPMorgan reportedly began allowing all of its wealth management clients <a href="https://cms.blockworks.co/jpmorgan-reportedly-to-allow-clients-to-access-crypto-funds/" target="_blank" rel="noreferrer noopener">to access crypto funds</a>.&nbsp;

Michael Saylor: Bitcoin is “A Trillion-Dollar Opportunity” for Tech Giants

Casey Wagner

<div id="highlights-block_61042a4803727" class="highlights">
 <ul>
 <li>Robinhood was the top trade on Fidelity’s retail platform following its public market debut Thursday </li>
 <li>The trading app fell more than 8% at the close Thursday, but retail interest remains strong </li>
 </ul>
 
</div>



In one of the most highly anticipated initial public offerings (IPO) of the year, zero-fee stock trading app Robinhood made its public market <a href="https://cms.blockworks.co/robinhood-stock-slips-on-first-day-of-trading/" target="_blank" rel="noreferrer noopener">debut</a> Thursday. 



Shares of the popular retail trading platform (ticker HOOD) closed more than 8% lower Thursday after ranking as the <a href="https://eresearch.fidelity.com/eresearch/gotoBL/fidelityTopOrders.jhtml" target="_blank" rel="noreferrer noopener">top trade</a> on Fidelity’s retail platform earlier in the session. There were 38,000 total HOOD transactions on Fidelity Thursday, and 81% were ‘buys,’ showing that the age-old sentiment “buy the dip” is alive and well. 



“‘Buy the dip’ is obviously an old phrase, it goes back well before retail traders, or at least this version of retail traders, had online trading,” said Nicholas Colas, co-founder of DataTrek Research. “It basically is just a fundamental indicator of confidence in the market, when you see stocks pull back, you have enough people come in to buy them that it forms a base, the stock stops going down, confidence is renewed and things move on from there.”&nbsp;



It&#8217;s not like the most academically rigorous concept, Colas admitted, but watching dip buys can reveal a lot about market sentiment. If a stock goes down, do investors have confidence in the name enough to buy?&nbsp;



“It is an asymmetric but interesting indicator of market confidence that people will step in to buy when a stock is down,” said Colas.&nbsp;



Typically, IPOs are priced to encourage a ‘pop,’ or a significant, usually 10% to 15%, increase in the first days of trading. When a stock doesn’t hit this target, it is usually seen as an unsuccessful debut with weak investor demand. In the case of Robinhood, however, the opposite may be true.&nbsp;



<blockquote class="wp-block-quote">“When an IPO breaks so quickly after the first print, that&#8217;s not a great sign,” said Colas. “So, seeing people buy Robinhood, especially on a quasi-busted IPO, is a real sign of confidence that they believe in that business model and believe in the future of the company.” </blockquote>



Robinhood, founded in 2013, has fundamentally changed retail trading. When the startup launched, most online brokerages charged around $5 to $8 per trade, at least. Robinhood’s zero-fee platform was disruptive enough to force other platforms to do the same.&nbsp;



Robhinhood’s success, Colas believes, revolves around whether or not the company can expand on retail trading and find new areas of disruption.&nbsp;



“I&#8217;m a big believer in the power of the retail model, and the same thing goes for Coinbase, for example, I think there is a large future for that kind of company,” Colas said. “It does revolve around how much they can get beyond just being a stock trading platform, same with Coinbase, for that matter, but it will be a matter of what else they can do with that to engage their customers.”&nbsp;



As of 11:20AM Friday, Robinhood was ranked fourth on Fidelity’s platform with 9,165 trades, 7,180 of which were buys. Shares were <a href="https://www.google.com/finance/quote/HOOD:NASDAQ?sa=X&amp;sqi=2&amp;ved=2ahUKEwjttJ2EnovyAhX5rZUCHdx5DLAQ3ecFMAJ6BAgiEBI" target="_blank" rel="noreferrer noopener">trading</a> at $36.30 at time of publication, down from its opening price of $38.



Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

Robinhood Ranks as Top Trade on Fidelity Upon Debut

Sam Reynolds

<div id="highlights-block_6102f80de5614" class="highlights">
 <ul>
 <li>Meme stock machine Robinhood was met with lukewarm interest from investors</li>
 <li>Robinhood has reserved a significant amount of shares for its clients and staff with an unorthodox lock up structure </li>
 </ul>
 
</div>



Robinhood, the company that was at the center of <a href="https://cms.blockworks.co/gamestop-where-it-all-gets-sticky/" target="_blank" rel="noreferrer noopener">January’s GameStop riot</a>, hit the public markets today and investors didn’t seem keen on its promise to give more power to retail investors.&nbsp;



Shares of HOOD were listed at $38 — the <a href="https://www.wsj.com/amp/articles/robinhood-ipo-prices-at-38-a-share-11627515866?mod=article_inline" target="_blank" rel="noreferrer noopener">low-end</a> of that underwriters were pricing things at — and promptly fell more than 10% after the opening bell. The IPO valued the trading platform at approximately $31.8 billion. After the first few hours of trading, shares recovered to approximately $36.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="906" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png" alt="Robinhood HOOD stock" class="wp-image-6014" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=290 290w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=295 295w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=248 248w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/07/Screen-Shot-2021-07-29-at-1.55.10-PM-1024x906.png?w=1528 1528w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Unlike many of the hottest tech IPOs, Robinhood is actually profitable.



Its S-1 form, <a href="https://cms.blockworks.co/robinhood-has-80-billion-in-assets-ipo-filing-reveals/" target="_blank" rel="noreferrer noopener">filed in early July</a>, showed that the trading company has 18 million retail clients, a triple-digit increase from 2020, and $80 billion in assets under its control. For the 2020 fiscal year, Robinhood reported a net income of $7.45 million on a net revenue of $959 million. In 2019, the company reported a loss of $107 million on $278 million.



Many tech companies that go public have a lock-up period for shares issued to employees in the private market. Robinhood is unique insofar that it has reserved shares for both employees and its clients, however these come with an unorthodox set of rules.



Employees will be able to sell 15% of their holdings upon public listing of the company, rather than after the usual six-month lockup period. After three months, employees will be able to sell another 15%.



Robinhood’s trading-hungry clients, of which around 35% of the shares are reserved for, however, will need to play by another set of rules. While there is no formal prohibition on selling the shares upon listing, the company said that those who dump their shares within 30 days of the listing will possibly be prevented from participating in other IPOs through the app for 60 days.&nbsp;



<h3 class="wp-block-heading">Regulatory questions cloud the IPO</h3>



All this comes as regulators take a hard look at the practice at the core or Robinhood’s business: payment for order flow.&nbsp;



While payment for order flow makes it possible for Robinhood to let customers place trades with no upfront commission payment, traders, and regulators are concerned that this allows the large institutional firms to see the data first before the order is executed. Effectively this makes the traders, <a href="https://cms.blockworks.co/robinhood-sells-your-data-but-does-that-matter/" target="_blank" rel="noreferrer noopener">and their data</a>, the product as it can be mined for insights to perfect these funds’ trading algorithms. 



In the case of Robinhood, Citadel Securities was a major order flow partner of Robinhood. In May, <a href="https://cms.blockworks.co/gamestop-frenzy-funneled-142m-from-citadel-to-robinhood/" target="_blank" rel="noreferrer noopener">regulatory reports published by Robinhood</a> showed that Citadel Securities paid Robinhood a king’s ransom ($142 million) for this data. Payment for order flow business generated Robinhood $331 million, Blockworks reported at the time. Of the $331 million, $142 million came from Citadel Securities.



Citadel, a separate hedge fund with the same founder as Citadel Securities, invested in Melvin Capital,&nbsp;<a href="https://www.cnbc.com/2021/01/31/melvin-capital-lost-more-than-50percent-after-betting-against-gamestop-wsj.html" target="_blank" rel="noreferrer noopener">the hedge fund deemed public enemy number one</a>&nbsp;at the height of the GameStop fiasco, and was on the opposite end of the GameStop short.



“We think payment-for-order flow is a better deal for our customers, vs. the old commission structure. It allows investors to invest smaller amounts without having to worry about the cost of commissions,” Robinhood CFO Jason Warnick was quoted as saying during the company’s <a href="https://www.cnbc.com/2021/07/26/here-are-the-highlights-from-robinhoods-virtual-roadshow-.html" target="_blank" rel="noreferrer noopener">virtual roadshow</a>.&nbsp;



But should regulators take a hard line on this, it would have a material impact on the company’s bottom line as it would be challenged to make trading available for free to clients as they are used to. Gary Gensler, the SEC chair, <a href="https://www.protocol.com/fintech/gary-gensler-payment-order-flow" target="_blank" rel="noreferrer noopener">has long been a critic</a> of the practice but it&#8217;s yet to be seen if the SEC will take any action on it.&nbsp;



HOOD is currently trading at $36.05 on the NASDAQ exchange.&nbsp;

Robinhood Stock Slips on First Day of Trading

<div id="highlights-block_61004148bc997" class="highlights">
 <ul>
 <li>The company currently operates about 3,000 crypto-asset mining computers with hashrate capacity of about 100 petahash</li>
 <li>In late June, the company fundraised $105 million from two private placements of equity securities and investors were granted registration rights that require a future public listing</li>
 </ul>
 
</div>



Stronghold Digital Mining, a digital asset mining company powered by alternative energy, filed an S-1 form for an initial public offering with the US Securities and Exchange Commission on Tuesday.&nbsp;



The company plans to raise up to $100 million and list its Class A common stock on the Nasdaq Global Market under the ticker $SDIG. The filing did not disclose the price per share.



Stronghold declined to comment directly about the S1-form or IPO, a spokesperson told Blockworks via email.&nbsp;



“Our current focus is on mining bitcoin, which we may convert to USD to the extent necessary to fund our development,” the company said in the filing. While the company is focused on bitcoin, it said it may utilize its miners for other crypto assets depending on market conditions.



Stronghold uses waste coal material to power crypto mining equipment using specialized technology at the company’s power generation facility, the Scrubgrass Generating Plant, based in Venango County, Pa.



In late June, the company fundraised $105 million from two private placements of equity securities and investors were granted registration rights that require a future public listing, it said. Investors include MG Capital, a number of family offices and Greg Beard, the company’s co-chairman and CEO, Blockworks previously <a href="https://cms.blockworks.co/stronghold-raises-105m-to-power-bitcoin-mining-with-coal-waste/" target="_blank" rel="noreferrer noopener">reported</a>. 



Stronghold currently operates about 3,000 crypto-asset mining computers with hashrate capacity of about 100 petahash. As of April 1, the company entered into definitive agreements with suppliers to purchase an additional 27,300 miners for a total hash capacity equal to over 2,600 petahash.



About 92% of those miners are scheduled to be delivered in 2021 and it anticipates its total hashrate capacity to be approximately 3,000 petahash by the end of the year. The remaining 8% of miners will be delivered throughout 2022, and will increase the petahash 76.67% to 5,300 petahash year-on-year by December 2022, it said.

Bitcoin-Focused Stronghold Digital Mining Files For $100M IPO

<div id="highlights-block_60cbadcb1552a" class="highlights">
 <ul>
 <li>Fourth-largest crypto exchange in the world’s announcement follows Coinbase going public in April</li>
 <li>Kraken has added 3 million new clients to its platform so far in 2021</li>
 </ul>
 
</div>



Just two months after Coinbase became the first major crypto company <a href="https://cms.blockworks.co/coinbase-direct-listing-shares-are-limited-demand-is-high/">to go public </a>in the US, Kraken, one of the exchange’s largest competitors revealed it could also go that route by the end of next year.



Kraken is “doing all the prep work” to become a public company in the next 12 to 18 months, CEO Jesse Powell said during an interview with Bloomberg TV.&nbsp;



The San Francisco-based exchange, which was founded in 2011, has clients in 190 countries and has more than 1,800 employees, according to its website. Kraken is the world’s fourth-largest cryptocurrency exchange — behind Binance, Coinbase and Huobi Global — and offers more than 50 tokens and seven fiat currencies.&nbsp;



Since the beginning of 2021, 3 million new clients have signed up to use Kraken. The company launched its app in the US earlier this month, which has contributed to the growth in users.



The IPO plan comes after Powell said during an interview with Fox Business News in April that Kraken wanted to have the option to potentially go public. He noted at the time that there would be “no guarantees we pull the trigger,” and added that the company was mulling whether it would stay a US company or not due to the country’s lack of regulatory clarity in the space.&nbsp;



Powell said at the time that Tokyo, the United Arab Emirates or the United Kingdom could be good homes for the company, which is the largest crypto exchange by euro trading volumes.



Coinbase decided to take a direct listing approach in April instead of a more traditional initial public offering. There are no new shares created or capital raised during a direct listing, as the company’s current shareholders offer the shares to the public.&nbsp;



“It’s kind of nice to have Coinbase out there being the guinea pig for this and we’ll see if it affects their business and their ability to move quickly,” Powell said in April. “This is a very fast-moving space and that’s something that we’re very cognizant of. We definitely want to retain our ability to move quickly.”



<a href="https://fortune.com/2021/06/10/crypto-exchange-kraken-rethinks-ipo-plans-after-coinbase-stock-listing/" target="_blank" rel="noreferrer noopener">Fortune reported last week</a> that Powell was now considering going public by way of IPO, a process during which new shares of the company are created and sold to the public, in light of the direct listing performance. He added that he thought Coinbase’s stock was undervalued now due to “a lack of understanding,” noting that it was still early.



Though Kraken is considering going public next year, no final decision has been made, a spokesperson told Blockworks.



“We&#8217;re fully focused on scaling our business, filling key roles and making sure we&#8217;re giving clients the best experience and products in a time of unprecedented growth,&#8221; the representative said. 



So far in 2021 Kraken has processed more than $420 billion in trading volume, which is more than three times the volume reported in 2020, the company’s previous best year on record, the spokesperson added. May was the exchange’s best month, as Kraken processed nearly $12 billion traded volume.



Kraken is focused on boosting access to financial services for retail consumers, Powell has said. Brian Hoffman, Kraken’s crypto platform lead, <a href="https://cms.blockworks.co/how-booming-exchanges-are-prepping-for-a-bear-market/" target="_blank" rel="noreferrer noopener">told Blockworks last month</a> that now is the time to focus on the infrastructure and services that will be critical to support the next bull run.



This story was updated on June 18, 2021, at 3:36 pm ET.