FinTech Weekly Highlights are back. We are looking at the latest developments of cryptocurrencies, M&As, startups, digital assets, IPOs, and other most interesting news announced in the industry this past week. We summarize everything for you and give you a condensed version of key FinTech news. What are we focusing on this week? Cryptocurrency ATMs increasing in the US, first digital-only artwork sold to a crypto investor, shares of Uphold Holdings soaring, eToro preparing to go public, crypto inflows hit a record high, Commonwealth Bank of Australia to enter the BNPL services, BNY Mellon invests in cryptocurrencies, Robinhood announces its first product chief officer and much more. Let’s look at the FinTech news highlights.
The Number Of Cryptocurrency ATMs Is Increasing
The USA is starting to increase its number of bitcoin and other cryptocurrency ATMs at the gas stations, shops, and delis. Now, every state except for Alaska has the bitcoin ATMs and the number of total cryptocurrency ATMs in the United States is approximately 30 000, with ⅓ being installed in the past half a year.
“I just assumed there was demand and people wanted bitcoin everywhere,” said Quad Coin founder Mark Shoiket.
Some of the cryptocurrency ATMs are bitcoin-only while others allow users to invest in other digital currencies. Some of them can also pay out cash but the service fees at the cryptocurrency ATMs are higher than in regular ATMs.
Pamela Clegg, director of financial investigations and education at cryptocurrency compliance firm CipherTrace said that the fees depend on the operator of the cryptocurrency ATM and the location. They can vary from 6% to 20% for a total transaction.
“The growth of the ATM market – it is not even a gentle increase, it is almost a 45% increase,” said Clegg. “The growth is quite astonishing.”
Metakovan, a crypto-asset investor, auctioned a $70 million digital-only artwork by the digital artist Beeple on Friday. It was the first sale by a major auction house for digital-only art.
The auction house, Christie, said in a statement that the real name of Metakovan will not be disclosed but that the buyer is the founder of the largest NFT fund in the world, Metapurse.
The work is in the form of a Non-Fungible Token (NFT) which means it is authenticated by blockchain. It was bought for $69 346 252 and was paid for with Ether (42 329 453 ETH)
“When you think of high-valued NFTs, this one is going to be pretty hard to beat. And here’s why – it represents 13 years of everyday work,” Metakovan said in a statement. “Techniques are replicable and skill is surpassable, but the only thing you can’t hack digitally is time. This is the crown jewel, the most valuable piece of art for this generation. It is worth $1 billion.”
On Thursday, the shares of Upstart Holdings, an AI-enabled fintech lender went soaring up.
Fresh off a blockbuster earnings report that shattered Wall Street expectations, shares of AI-enabled fintech lender Upstart Holdings skyrocketed Thursday, minting a new billionaire out of Dave Girouard, the firm’s co-founder, and CEO.
“Last quarter was monumental for us as we took the company public in the midst of a historically complex and challenging time for the world,” Dave Girourd, CEO of Upstart Holdings said on Wednesday.
Upstart makes loans varying from $1000 to $50 000 with interest rates similar to its competitors, ranging between 7% and 36%. However, they use AI and alternative data such as education to assess the credit scores of their customers. In December, the startup listed on the Nasdaq exchange and managed to soar up 47% on the first day of trading, achieving a $2.2 billion market cap.
“While Amazon and Shopify have modernized the online shopping experience, the auto industry has been left behind,” Girouard said Wednesday. “Auto retail is among the largest buy-now-pay-later opportunities, and together with Prodigy, we aim to help dealers create a seamless and inclusive experience worthy of 2021.”
FinTech News: EToro Will Go Public
On Tuesday, the Israeli online stock brokerage announced it will go public in a $10.4 billion merger deal with a blank-check firm that is backed by Betsy Cohen and with investment from SoftBank. With the announcement, eToro becomes the next Israeli tech startup that are about to go public in the US.
EToro is one of the biggest Robinhood competitors. It was founded back in 2007 and up to now, the company has 20 million users. In 2020 alone, eToro has had 5 million new users and a revenue of $605 million, a 147% growth from 2019.
The users can invest in cryptocurrencies, stocks, and commodities manually, as well as copy trades of other users on the platform.
The UK-based fintech, Diem, has just completed its seed funding round. The $5.5 million investment was led by Fansanara Capital and an angel investor, Chris Adelsbach. Other investors included Andrea Molteni (an early investor in Farfetch), Ben Demiri (co-chairman at fashion tech platform), and Nicholas Kirkwood (founder of the eponymous brand).
Diem is a debit card with an attached app that can offer some of the traditional banking service such as bank transfers but also has an innovative feature of letting users dispose of goods that the startup later resells. TechCrunch refers to it as “neo bank meets people who sell your stuff on eBay.”
The customers can upload any of their items to the app. Then, Diem makes the user an offer and if it accepted, the money will be transferred to the user’s account immediately and the item is sent to Diem by the user.
Geri Cupi, the CEO of Diem said: “Diem’s mission is to empower consumers to value, unlock, and enjoy the wealth they never knew they had. All of this while fuelling the circular economy and supporting the commitment to sustainability as our key value proposition. DIEM makes it possible for capitalism and sustainability to co-exist.”
CEO at Fasanara Capital, Francesco Filia, said: “Fasanara is excited to announce our partnership with DIEM and Geri Cupi… [it’s] a new generation fintech powered by principles of circular economy and look forward to supporting its growth.”
CoinShares released data indicating that a new record high crypto inflows were hit. The first quarter inflows into crypto funds and products are at $4.2 billion, an increase from the previous record high at $3.9 billion (Q4 of 2020).
Unsurprisingly, the most inflows are contributed to bitcoin with $3.3 billion, with ether coming next with $731 million.
“As bitcoin moves into the mainstream and captures greater attention, it will likely draw further scrutiny from regulators in the United States and Asia,” Jesse Cohen, senior analyst at Investing.com, said. “The potential for more scrutiny and tighter regulation remains the biggest headwind for bitcoin,” Cohen added.
On Wednesday, the biggest lender in the country, Commonwealth Bank of Australia, announced that it will launch its own version of the “Buy Now, Pay Later” service that was successfully launched by the finance giant, PayPal.
PayPal has just reported their plans to enter the Australian market with the BNPL services and the announcement by the CBA is promising a tight competition between the two, with CBA offering lower prices.
“This is in line with our view that the lucrative economics of BNPL, given its enormous success to date, will attract competition,” said UBS analysts in a client note.
CBA announced that it will charge the stores the standard merchant fees, the same it does for the credit cards. That would differ from the other BNPL services that charge approximately 4%.
“The CBA product is cheaper for merchants, however, merchants are willing to accept higher fees from Afterpay as recompense for the referral traffic it drives,” said Lachlan Hughes, CEO of Swell Investment Management.
Robinhood announced on Wednesday that it has appointed its first chief product officer. The position will be filled by the former Google executive, Aparna Chennapragada.
Channapragada was an addition to the Google team for the past 12 years and her most recent position was vice president for consumer shopping and lead for visual search and augmented reality. At Robinhood, Channapragada will be overseeing product, design, and research.
On Thursday, it was revealed that the Bank of New York Mellon decided to invest in Fireblocks. It is a platform allowing banks and alternative finance providers to store, issue, and move cryptocurrencies.
The investment is a part of the $133 million funding round that also involved hedge fund Coatue Management, investment firm Ribbit Capital, growth equity firm Stripes, and SVB Capital, as Fireblocks announced. The previous investors include Paradigm, Galaxy Digital, and Swisscom Ventures.
After the investment round, Fireblocks is valued at approximately $1 billion. The platform is available in Europe, Asia, and North America and serves both traditional banks, hedge funds, and exchanges, as well as neo banks and other alternative financial services providers.
So far, Fireblocks has raised $179 million in funding.
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