Author: Faith Yakubu

Bitfarms Ltd., a Bitcoin mining company, is adopting a “poison pill” shareholder rights plan in response to an unsolicited takeover offer from larger rival Riot Platforms Inc.

A poison pill strategy is designed to deter corporate takeovers by making the acquisition too costly for the acquiring company. Under the terms of Bitfarms’ plan, if an entity acquires an equity stake exceeding 15% by September 10, Bitfarms will issue new stock to existing shareholders, thereby diluting the stake of the entity pursuing the hostile takeover, as stated in a Monday announcement by Bitfarms.

Riot Platforms made an unsolicited offer of $950 million in May to acquire Bitfarms Ltd. following the latter’s rejection of Riot’s takeover bid the previous month. Bitfarms’ board deemed the proposal as significantly undervaluing the company and its growth prospects.

In April, Riot privately proposed $2.30 per share in cash and stock for Bitfarms, which represented a 20% premium over the company’s pre-offer share price.

According to Bitfarms, Riot currently holds 47,830,440 shares, constituting approximately 12% of the issued and outstanding stock. A spokesperson for Riot did not respond immediately to requests for comment.

On Monday, Bitfarms shares declined by 4.2% to $2.30, while Riot’s stock increased by 1.8% to $9.90. Year-to-date, both stocks have experienced declines of around 21% and 36%, respectively.

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Bitdeer, a prominent Bitcoin (BTC) miner, has announced its acquisition of Desiweminer, a designer of chips for ASIC mining machines, in a significant all-stock transaction valued at $140 million. This strategic move aims to bolster Bitdeer’s capabilities in ASIC chip design and enhance its position in the competitive cryptocurrency mining industry.

According to the announcement made on Thursday, Bitdeer will acquire all outstanding shares of Desiweminer for a consideration of 20 million Class A ordinary BTDR shares. The transaction is subject to customary closing conditions, signaling the culmination of negotiations between the two entities.

As part of the acquisition, the Desiweminer team will integrate with Bitdeer’s ASIC design team based in Singapore. This collaboration is expected to lead to the development of innovative products that leverage the combined expertise and technologies of both companies. These new offerings are set for immediate release, highlighting the swift integration efforts underway.

Bitdeer’s acquisition of Desiweminer comes shortly after receiving a substantial investment of $150 million from stablecoin company Tether at the end of last month. This injection of funds underscores Bitdeer’s commitment to expanding its operations and investing in strategic partnerships to drive growth in the evolving cryptocurrency market landscape.

Following the announcement, BTDR shares experienced a modest uptick, rising 0.54% to $7.05 in pre-market trading. This response indicates initial market confidence in the potential synergies and value creation expected from the acquisition deal.

Overall, Bitdeer’s acquisition of Desiweminer represents a strategic maneuver to strengthen its position in the competitive ASIC chip design market and reinforce its presence in the rapidly evolving cryptocurrency mining sector.

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Binance, the world’s largest cryptocurrency exchange, has resumed Mastercard payments for purchasing cryptocurrencies, marking a significant development in the crypto payment landscape. While Mastercard withdrawal services are not yet available, they are expected to be reinstated at a later date.

This move comes after Mastercard suspended crypto-related services on Binance in August 2023. The decision coincided with Binance facing legal challenges in the United States, including regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC).

After conducting a thorough review of Binance’s controls and processes, Mastercard decided to reinstate Binance-related purchases on its network. A spokesperson from Binance highlighted the extensive measures implemented by the exchange and expressed optimism about adding support for additional products, such as withdrawals, in the future.

Mastercard confirmed the restoration of service but emphasized that ongoing reviews would determine the continuation of Binance-related transactions on its network. This cautious approach underscores the importance of maintaining robust compliance measures in the cryptocurrency ecosystem.

Both Visa and Mastercard have shown enthusiasm for the cryptocurrency sector, venturing into Web3 and self-custody wallet solutions. The reinstatement of Mastercard payments on Binance reflects a broader trend of traditional financial institutions embracing the opportunities presented by cryptocurrencies and blockchain technology.

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Bitcoin has extended its winning streak to five consecutive sessions, edging closer to the $71,000 mark amidst growing expectations of Federal Reserve interest-rate cuts later this year.

The cryptocurrency’s sustained upward momentum marks its longest series of daily gains in three months, with Bitcoin trading at $70,785 as of 8:25 a.m. Wednesday in New York, just 4% below its all-time high of $73,798 reached in mid-March.

Investors are increasingly factoring in the likelihood of a Fed rate cut as early as November, spurred by indications of moderating US inflation and a softer job market. This shift in market sentiment has led to a notable decline in Treasury yields over the past two days, easing financial conditions and bolstering speculative assets like cryptocurrencies.

According to Tom Couture, vice president of digital-asset strategy at Fundstrat Global Advisors, the positive response from crypto assets can be attributed to the decrease in interest rates.

The rally in cryptocurrencies is not limited to Bitcoin alone, with other top coins such as BNB and Solana experiencing gains over the past 24 hours. BNB, in particular, has surpassed its previous all-time high from 2021, reflecting improved sentiment towards the Binance ecosystem despite regulatory challenges earlier in the year.

While Bitcoin has faced resistance in maintaining its position above $70,000, optimism persists due to increased inflows into dedicated US exchange-traded funds and ongoing developments towards a regulatory framework for cryptocurrencies in Washington.

Elsewhere, in Japan, crypto exchange DMM Bitcoin announced plans to raise funds to compensate customers affected by a recent hack, highlighting ongoing challenges in the industry.

Amidst these developments, Bitcoin’s correlation with the Nasdaq 100 Index of US technology stocks has reached its highest level since early 2023, suggesting a potential alignment between equity market gains and further appreciation in the cryptocurrency market.

Michael Novogratz, founder and CEO of Galaxy Digital, expressed optimism about Bitcoin’s future, predicting a record high of $100,000 or higher by the end of the year, buoyed by a more favorable regulatory environment in the United States. This positive sentiment reflects a shift from the uncertainties and scandals that plagued the cryptocurrency market in previous years.

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Kerrisdale Capital Management LLC, known for its short-selling strategies, has set its sights on Riot Blockchain Inc., criticizing its business model as flawed in the challenging landscape of Bitcoin mining. According to Kerrisdale, investing in Bitcoin directly is a more viable option for cryptocurrency enthusiasts than purchasing miner stocks.

The report released by Kerrisdale founder Sahm Adrangi highlighted Riot’s shareholder dilution due to the company’s stock-selling practices. Additionally, Adrangi’s letters to Texas government officials raised concerns about Riot’s energy usage practices and its impact on the state’s energy laws.

Shares of Riot, based in Castle Rock, Colorado, experienced a decline of up to 8.9% following the publication of Kerrisdale’s report. The company has yet to respond to requests for comment from Bloomberg News.

Adrangi emphasized that Bitcoin mining is a highly competitive commodity business with minimal barriers to entry, particularly as new mining projects emerge globally. He argued that the current valuations of Bitcoin miners do not justify investment, especially considering the availability of low-fee exchange-traded funds for investors seeking exposure to Bitcoin.

This isn’t the first time Kerrisdale has targeted companies with exposure to cryptocurrencies. In March, the firm recommended a pair trade involving shorting MicroStrategy Inc. while taking a long Bitcoin position, a strategy that has proven successful thus far.

However, there are potential risks associated with shorting Bitcoin miners, as demonstrated by Core Scientific Inc.’s recent surge in stock price following news of long-term contracts and acquisition offers. Despite the challenges highlighted by Kerrisdale, the dynamic nature of the cryptocurrency market leaves room for miners to adapt their business models and attract investors or strategic buyers.

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