Public keys is a weekly roundup from Decrypt that tracks the key publicly traded crypto companies. This week: DraftKings officially enters the prediction market race, a Bitcoin miner makes a comeback, and payments giant Zelle gets into the stablecoin arena.
Predictable for DraftKings
It wasn’t exactly a surprise when DraftKings announced that it had acquired prediction market exchange Railbird. The rumor was first reported by Front Office Sports in July.
But sports betting giant DraftKings, which trades on the Nasdaq under the DKNG ticker, has a unique hurdle to clear. The company already offers its sportsbook in at least 25 states and its daily fantasy sports product in more than 40 states.
The company doesn’t want to jeopardize its licenses in the states where it currently operates.
Paul Zilm, a sports betting operations expert and full-time trader at prediction market firm Mojo, said some states have already made their positions clear.
“Some states they already operate in have been vocal that launching prediction markets in their states may jeopardize their regulated gambling license,” he wrote on LinkedIn.
But DraftKings doesn’t seem keen to test those regulators’ resolve. A person familiar with the company’s plans told Decrypt its new prediction market app will focus on states without legal sports betting.
Although DraftKings shares saw gains the day of the announcements, they were short-lived. DKNG closed Friday at $33.00 per share, down 4.9% on the day and 3.2% for the week.
Canaan’s turnaround
Bitcoin mining rig manufacturer Canaan got a $4 price target and flagged as an “accelerating turnaround story” by Benchmark analyst Mark Palmer this week.
We’re talking about a very dramatic turn for the company. In May, it was warned that it would be delisted from the Nasdaq because it had been trading below $1. Last week, Canaan got a letter to confirm it was back in compliance with listing standards.
Now it’s already halfway to Benchmark’s new price target. Canaan, which trades under the CAN ticker, finished the week at $1.89 after having gained 7.39% in the past day and 18.12% over the week.
Palmer highlighted that Canaan's Avalon line of Bitcoin mining rigs has been gaining popularity.
“We believe the company’s ADRs are very inexpensive,” Palmer wrote, referring to the American Depositary Receipts that allow a foreign company to trade in the United States. Palmer added that the bank expected CAN “to appreciate as it executes on its strategy, with a potential tailwind coming from the rising price of Bitcoin.”
Zelle takes stables cross-border
Payments processor Zelle will start using stablecoins to facilitate international transactions.
The platform’s parent company, Early Warning Services, said the move will “enable Zelle to deliver faster and more reliable cross-border money movement.”
The payments processor is owned by Wall Street titans Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo.
Stablecoins have been growing at a blistering pace. Transaction volume has increased 83% in the past year, according to a new report from TRM Labs. And stablecoins now account for 30% of all crypto transaction volume, about $4 trillion in total.
“As institutions seek to leverage digital assets for use cases like value transfer, interest will continue to surge,” Angela Ang, TRM’s Head of Policy and Strategic Partnerships, APAC told Decrypt, who said we’re still “just at the beginning of the stablecoin adoption curve.”
Other keys
Secured with BTC: JP Morgan will begin letting institutional clients use BTC and ETH as loan collateral through a third-party custody model. No word yet on rank-and-file Chase customers.
Galaxy-sized profits: Mike Novogratz’s Galaxy Digital saw $505 million in Q3 profits, the company reported Tuesday. The firm also said trading volumes increased 140% quarter-over-quarter, which includes a $9 billion notional Bitcoin sale that Galaxy facilitated earlier this year.
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