Blockchains and Bagels: the morning market update to get you ready for the day ahead. Today, Overstock blockchain unit secures private-equity investment; Yale economist releases cryptocurrency analysis.
E-commerce retailer announced that private-equity firm GSR Capital will invest up to $270 million into Overstocks blockchain subsidiary tZero. The deal gives the firm an 18 percent stake in tZero, and values the subsidiary at $1.5 Billion. In addition, GSR Capital will purchase $30 million worth of tZero security tokens from Overstock. Overstock shares rose as much as 21% in after-hours trading after the announcement.
In a study by Yale economist Aleh Tsyvinski and Yunkun Liu, a Ph.D. candidate, the duo highlighted that the return/volatility ratio for cryptocurrencies is not drastically larger than stocks and bonds. Furthermore, the study also highlights that factors, such as momentum and investor attention, can be used to meaningfully predict cryptocurrency behavior.
An investigation into a kidnapping scheme targeting a property developer in India uncovered a Bitcoin-based Ponzi scheme that allegedly scammed individuals across the globe. The firm, BitConnect, encouraged clients to deposit bitcoin in return for BitConnect coins that could be lent for double-digit rates, attracting over $3.2 billion worth of Bitcoin deposits over the course of its operations.
Commonwealth Bank of Australia has been mandated by the World Bank to create the worlds first blockchain bond, named bond-i. The new issuance seeks to be the first bond in the world to be created, allocated, transferred, and managed with blockchain technology.
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