Key cryptocurrency prices have stabilised after drops of 15 per cent for bitcoin and 18 per cent for ether over the weekend, while Crown has received a private equity offer to help it buy out James Packer.
- Major cryptocurrencies dropped sharply over the weekend, with bitcoin falling as low as $US51,707.50
- Crown has received an unsolicited $3 billion funding proposal from Oaktree to buy out James Packer
- The ASX was higher in early trade after gains on Wall Street at the end of last week
Having surged to a record high of $US64,869.77 on April 14, bitcoin hit a low of $51,707.50 yesterday before quickly rebounding to around $US57,260 at 12:35pm AEST.
Other major cryptocurrencies made similar moves, with ether dropping below $US2,000 before paring its losses to $US2,255.
Dogecoin bucked the weekend trend by rising over the past day, although it is also off its record highs recorded last week.
The sell-off came after a frenzy of interest in cryptocurrency trading hub Coinbase’s listing on the Nasdaq last week.
Coinbase reached highs of $US112 billion before closing at $US86 billion after listing on Wednesday.
It ended the week valued at $US68 billion.
The hype around its listing had seen most major cryptocurrencies hit record prices during the past week, leading many to conclude the sell-off was “inevitable”.
“Markets got too excited around $Coin direct listing,” tweeted cryptocurrency investor and CEO of Galaxy Digital, Michael Novogratz.
“Basis blowing out, coins like $BSV, $XRP and $DOGE pumping. All were signs that the market got too one way.
“We will be fine in the medium term as institutions coming to the space.”
Other players in the crypto space also cited “euphoria” for the extreme prices rises last week, and their reversal on the weekend.
“The crypto world is waking up with a bit of a sore head today,” Antoni Trenchev, co-founder of crypto lender Nexo, told Bloomberg.
“Dogecoin’s 100 per cent Friday rally was ‘peak party’, after the bitcoin record and Coinbase listing earlier in the week.
Crown reveals Oaktree plan to buy out Packer
The big news on the Australian share market is a proposal by private equity firm Oaktree to fund Crown Resorts to buy out its biggest shareholder, James Packer.
Crown announced to the market this morning that it had received an unsolicited and non-binding proposal from funds managed and advised by Oaktree Capital Management to provide funding of up to $3 billion to Crown for the purpose of buying back some or all of the shares currently held by Mr Packer’s private company, Consolidated Press Holdings Limited (CPH).
CPH currently owns around 37 per cent of Crown.
However, any selective buy-back of the Crown shares held by CPH would be subject to approval by the casino operator’s other shareholders.
CPH would not be allowed to vote in favour.
Crown said its board has not yet formed a view on the merits of the Oaktree proposal.
Crown is also currently considering an $8 billion takeover offer from private equity firm Blackstone.
Crown shares were up 0.7 per cent to $12, slightly higher than Blackstone’s $11.85 a share offer price.
ASX opens higher
While cryptocurrency markets were volatile, that has not fed through to equities.
The Australian share market has followed a positive lead from Wall Street on Friday, with a modest 0.2 per cent gain for the ASX 200 to 7,074 points.
At 12:50pm AEST, however, there were slightly more stocks in the red than gaining ground (97 versus 94, with nine flat).
The broader All Ordinaries was up a similar amount to 7,337 points, after hitting a fresh record high in morning trade.
Mining and consumer stocks were leading the gains.
Recycler Sims was the strongest stock on the ASX 200, rising 9.7 per cent to $16.68 after forecasting underlying earnings between $260-310 million this financial year, compared with a $58.1 million loss last year.
Car retailer Eagers Automotive was another standout performer, up 4.7 per cent.
Smaller gold miners dominated the best gains in the resources sector, following a recent rise in the price of the precious metal.
Energy companies were the main drag on the market, with Whitehaven Coal and Beach Energy both off 2.5 per cent.
The Australian dollar was worth 77.3 US cents.
Spot gold was selling for $US1,778.16 an ounce.
Brent crude oil was fetching $US66.52 a barrel.