Public Keys: DraftKings becomes predictable, Canaan turns heel, and Zelle likes to stall

Public Keys is a weekly summary of Declutter that tracks the most important listed crypto companies. This week: DraftKings officially joins the prediction market race, a Bitcoin miner makes a comeback, and payments giant Zelle enters the stablecoin arena.

Predictable for DraftKings

It wasn’t exactly a surprise when DraftKings announced it had acquired the 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 overcome. The company already offers its sportsbook in at least 25 states and its daily fantasy sports product in more than 40 states.

The company does not want to jeopardize its licenses in the states where it currently operates.

Paul Zilm, a sports betting expert and full-time trader at prediction market company Mojo, said some states have already made their positions clear.

“Some states in which they already operate have said that launching prediction markets in their states could jeopardize their regulated gambling license,” he wrote on LinkedIn.

But DraftKings doesn’t seem eager to test those regulators’ resolve. A person familiar with the company’s plans said Declutter its new prediction market app will target states without legal sports betting.

Although DraftKings shares posted gains on the day of the announcements, they were short-lived. DKNG closed at $33.00 per share on Friday, down 4.9% on the day and 3.2% for the week.

The Turning of Canaan

Bitcoin mining rig manufacturer Canaan was given a $4 price target and was flagged this week as an “accelerating turnaround story” by Benchmark analyst Mark Palmer.

We’re talking about a very dramatic turn for the company. In May, it was warned it would be delisted from the Nasdaq for trading below $1. Last week, Canaan received a letter confirming that it had returned to listing standards.

It is now already halfway to Benchmark’s new price target. Canaan, which trades under the CAN ticker, closed the week at $1.89 after gaining 7.39% over the day and 18.12% for the week.

Palmer highlighted that Canaan’s Avalon line of Bitcoin mining rigs is gaining popularity.

“We believe the company’s ADRs are very cheap,” 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 increase in value as it executes its strategy, with a potential tailwind coming from the rising price of Bitcoin.”

Zelle takes stables across the border

Payment processor Zelle will use 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 transfers.”

The payment processor is owned by Wall Street titans Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, US Bank and Wells Fargo.

Stablecoins have grown at a rapid pace. According to a new report from TRM Labs, transaction volume has increased by 83% in the past year. And stablecoins now account for 30% of all crypto transaction volumes, totaling about $4 trillion.

“As institutions look to leverage digital assets for use cases such as value transfer, interest will continue to rise,” said Angela Ang, TRM Head of Policy and Strategic Partnerships, APAC. Declutterwho said we are 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 collateral for loans through a third-party custodial model. No word yet on regular Chase customers.

Galaxy-sized profits: Mike Novogratz’s Galaxy Digital posted a profit of $505 million in the third quarter, the company reported Tuesday. The company also said trading volumes increased 140% quarter-over-quarter, including a fictitious $9 billion Bitcoin sale that Galaxy facilitated earlier this year.