Here’s What You Missed in Crypto This Week

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Bitcoin Depot to become public via SPAC combination as Overstock completes tZERO investment

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

BITCOIN DEPOT TO GO PUBLIC VIA GSR II METEORA COMBINATION: 

Lux Vending dba Bitcoin Depot and GSR II Meteora Acquisition Corp. (GSRM) announced Thursday a definitive agreement for a business combination that would result in Bitcoin Depot becoming a publicly listed company. Upon closing of the transaction, the combined company will be named Bitcoin Depot and trade on the NASDAQ under the new ticker symbol “BTM.” The companies said, “Since its inception in 2016, Bitcoin Depot’s mission has been to Bring Crypto to the Masses. Bitcoin Depot’s products and services provide an intuitive, quick, and convenient process to convert cash into cryptocurrency, giving users the ability on their own to access the broader, digital financial system, including payments, transfers, remittances, online purchases, and investments.” Bitcoin Depot enables users to convert their cash into bitcoin, ethereum and ;itecoin at more than 7,000 kiosk locations in 47 U.S. states and nine Canadian provinces. Through its BDCheckout offering, users can fund their Bitcoin Depot account with cash at an additional 8,000+ locations at major retailers. Bitcoin Depot’s mobile app allows users to locate nearby kiosks and manage their crypto wallet.  Assuming no redemptions, the combined company will have an estimated post-transaction enterprise value of $755M with an estimated equity value of $885M from the contribution of up to $170M in cash proceeds from the transaction, net of cash distribution to selling equity holders and expenses. The net proceeds raised from the transaction will consist of up to $321M of cash held in GSRM’s trust account and will be used to support Bitcoin Depot’s working capital, complete acquisitions and scale its platform and suite of products. The business combination has been unanimously approved by the leadership team of Bitcoin Depot and the Board of Directors of GSRM and is expected to close by the first quarter of 2023.

OVERSTOCK COMPLETES INVESTMENT IN TZERO: 

Overstock.com (OSTK) announced Friday that it has completed the second tranche of its planned investment in tZERO Group, after its initial funding announced in February of this year. tZERO’s strategic funding round, which was led by Intercontinental Exchange (ICE), closed on August 22, 2022. On February 22, 2022, tZERO announced an additional funding round from new and existing investors. Overstock committed to invest in aggregate, an additional $15M through Series B financing. Overstock funded the first tranche of $7.5M in conjunction with tZERO’s announcement in February of this year. Overstock funded the second and final tranche of the investment on August 22, 2022. tZERO is a portfolio company of Medici Ventures, L.P., a blockchain-focused fund. Overstock.com is the sole limited partner of Medici Ventures, L.P. and holds a direct minority interest in tZERO. Following completion of tZERO’s funding round, the combined direct and indirect ownership of Overstock in tZERO is approximately 55%. This includes a direct minority ownership of approximately 29%. Medici Ventures, L.P. holds approximately 26%.

APPLIED BLOCKCHAIN REPORTS Q4 RESULTS, NAME CHANGE: 

On Thursday, Applied Blockchain (APLD) reports fourth quarter adjusted loss per share of 6c on a revenue of $7.5M, which compared to analyst consensus of a loss per share of 13c on a revenue of $7.09M. “We continue to execute our growth strategy despite a volatile cryptocurrency environment,” said chairman and CEO Wes Cummins. “Our first facility has been operating as expected and substation repairs were completed ahead of schedule, enabling full power to again be provided to the datacenter. Additionally, our second facility is progressing ahead of schedule despite global supply chain challenges that are negatively impacting timelines for many in the industry. “We expect to have three datacenters operating by the first half of calendar 2023, representing nearly 500 megawatts of total hosting capacity, which is already fully committed through contract or option. These facilities are already nearly entirely contracted out on long-term agreements with blue-chip customers. We also continue to see robust demand for our services, which, coupled with our strong balance sheet, ramping cash flow capabilities, and expanding nondilutive financing options, collectively provide us with an attractive go-forward outlook for our shareholders.”

The company also announced Thursday that it intends to change its name from “Applied Blockchain, Inc.” to “Applied Digital Corporation”. Applied Blockchain said, “The Ccmpany’s intended name change will more accurately reflect its services and broader business offerings to serve customers that require large computing power applications. While Applied Blockchain continues to be a premier provider of digital infrastructure for many cryptocurrency mining operations, it is important for the company to distinguish that its next-generation datacenters support many other high-performance compute applications.”

HUT 8 ENTERS PARTNERSHIP WITH ZENLAYER: 

Hut 8 Mining (HUT) announced Tuesday it has signed a partnership with Zenlayer, an edge cloud service provider, to bring edge computing solutions to Web 3.0, blockchain, and enterprise customers. The partnership enables Hut 8 customers to instantly deploy and run their applications using Zenlayer’s edge cloud platform. Users can self-provision compute and networking services through APIs or an online console accessible to more than 40 countries in the world. In addition, Zenlayer’s customers will now be able to tap into the Canadian market as Zenlayer deploys additional cloud regions with Hut 8 at their Kelowna and Mississauga data centers.

MARATHON DIGITAL PRICE TARGET RAISED: 

Cowen analyst Stephen Glagola raised the firm’s price target on Marathon Digital (MARA) on Tuesday to $9 from $7 and kept a Market Perform rating on the shares. While the analyst raised his price target, he said Marathon remains exposed to execution risk on the timeline to scale to 23.3 EH/s given reliance on third-party suppliers and lack of infrastructure control.

CRYPTO STOCK PLAYS: 

Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Ideanomics (IDEX), Riot Blockchain (RIOT), Overstock, Pareteum (TEUM) and SRAX (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.

PRICE ACTION: 

As of time of writing, bitcoin was roughly flat this week at $21,242 in U.S. dollars, according to TradeBlock.

Originally Posted August 26, 2022 – Here’s What You Missed in Crypto This Week

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