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Cyber Security Firm FireEye Reports Weakest Quarterly Revenue; CFO To Leave

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Davide DeWalt FireEye

Davide DeWalt // FireEye

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FireEye Inc., the Milpitas, a Calif.-based cyber security firm, reported its weakest quarterly revenue growth since the company went public in 2013, according to Reuters. The company also reported that its chief financial officer, Michael Sheridan, will resign.

FireEye Inc.’s shares fell 6.5 percent to $44.64 Thursday in after-market trading.

David DeWalt, the company’s chief executive, attributed the price drop to the CFO transition. “People would be nervous about a CFO transition, typically,” DeWalt told Reuters.

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Chief Executive: Why Investors Shouldn’t Worry

He said investors should not worry, adding that it was natural for a CFO to leave a startup once its market value reaches $1 billion. “We are going to add a very strong CFO shortly,” he said.

The company noted that Sheridan, who served as CFO since June 2011, will join a private technology company. Frank Verdecanna, vice president of finance, will assume the role of interim CFO.

FireEye has not reported a profit since its IPO. The company uses cloud-based technologies to help businesses and government departments counter viruses that can breach older antivirus software.

FireEye’s revenue rose 55.8 percent in the three months ending June 30 – much lower than the previously typical average of over 90 percent growth.

Analysts had expected $143.2 million in revenue, according to Thomson Reuters I/B/E/S.

“Given the pristine valuation that FireEye gets, the company must continue to deliver monster ‘home run’ quarters and I would characterize this as a ‘triple,’” FBR Capital Markets analyst Daniel Ives told Reuters.

Also read: Canadian technology giant CGI to seek cyber security acquisitions

Company Boosts Full-Year Revenue Forecast

FireEye boosted its full-year revenue forecast for the second time this year to $630 million-$645 million from $615 million-$635 million.

Analysts were expecting $631.6 million in revenue.

The company’s net loss attributable to shareholders grew to $133.6 million (87 cents per share) in the second quarter from $116.8 million (82 cents per share) a year earlier.

Excluding items, FireEye lost 41 cents per share, which was less than analysts’ average estimate of 48 cents.

The company’s stock had increased about 51 percent this year up to Thursday’s close.

 Featured image from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Saddle Up: Institutional Investors Are Coming to Crypto

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If institutional capital is what the cryptocurrency market needs to hoist it over the edge, the tide could be about to turn. Several signs are pointing toward the increased institutional adoption of cryptocurrencies, including the number of banks flocking to the blockchain as well as leading U.S. bitcoin exchange Coinbase’s next phase of growth, which according to reports involves targeting Wall Street.

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Venture Capital

Spencer Bogart, a venture capitalist and partner at Blockchain Capital, told CNBC that for all its woes, bitcoin (BTC) remains a buying opportunity. The bitcoin price is trading at less than half of its value from its December 2017 high and has been struggling to regain momentum and reattain the $8,000 level.  Some market bears have forecast that it will get worse before it gets better. But others are calling a bottom.

Blockchain Capital’s Bogart is in the bullish camp, telling CNBC:

“Every major bank is trying to do something in the space. Either they’re going to be offering bitcoin to their clients, they’re working on a custody platform or they’re opening up a trading desk. A deeper institutionalization of bitcoin is overall positive,” Bogart said.

Bogart identified several leading cryptocurrencies that he likes at the current levels, but bitcoin was the only buy. He recommends holding Ethereum, XRP, Bitcoin Cash and as EOS, which he characterized as “neutral.” Others are overpriced, such as Cardano, TRON, IOTA and NEO, he told CNBC.

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TRON and EOS on the MainNet

The TRON price is off its May highs but it has been holding its own and is trading approximately twice its April levels. TRON has had some standout moments alongside EOS, both of which are readying a migration away from the Ethereum blockchain and losing their ERC20 status.

In the coming days, TRON and EOS are launching on their own MainNet blockchains, separate and apart from Ethereum, and the cryptocurrency community has been abuzz about the launches.

EOS is a developers’ coin, as it is designed to provide scale to Dapps. Bogart must like EOS at these levels because it’s lost some ground of late and is trading at about $12.46 compared to its May high of approximately $19. While he is neutral on the coin, there could be more upside potential there with the migration to MainNet than he is giving it credit for.

Coinbase

Further signs of a “deeper institutionalization of bitcoin” can be found in Coinbase’s product suite, all of which reflect a targeting of hedge fund clients. One anecdotal sign is the San Francisco-based exchange setting up shop in New York, where it can gain access to potential hedge fund clients. Coinbase is also ramping up its institutional services by facilitating larger cryptocurrency trades that are inherent with sophisticated traders like hedge funds.

If Coinbase’s ability to attract individual investors into the cryptocurrency space is any indication, then saddle up because hedge funds are on their way in. Coinbase is largely responsible for growing the U.S. cryptocurrency investor base for its focus on the retail investor, which has come back to haunt the exchange in the bear market. But the bitcoin exchange is betting that institutional investors can fill the void left by declining trading volumes, as depicted in the below illustration –

Source: The Wall Street Journal

Coinbase’s odds based on past success are good, considering the number of accounts on its platforms at 20 million surpassed that of one of the most traditional brokerage houses on Wall Street, Charles Schwab. The stars may need to align for Coinbase to see the same growth in its institutional business, but with a clear roadmap of what needs to transpire across custody products and regulation, it may be just a matter of time before bitcoin fever strikes again.

Featured image courtesy of Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 7 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. Full disclosure, she's invested in bitcoin.




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Blockchain Talent Demand Surpasses Supply

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If there’s any group in the global workforce that is sitting pretty it’s blockchain developers. Their success has unparalleled with anything in the stratosphere, yet they’re still receiving offers with compensation packages rivaling that of CEO pay packages. And many of them have already become millionaires from investing in the coins of the market leaders they helped to build, including bitcoin and Ethereum, which means they’re less incentivized to join other projects for the size of the offer alone.

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Decentralized World

The thing to remember about blockchain pioneers is that they set out on the mission of a decentralized world not so that they could be subject to the whims of cryptocurrency prices. They are just as focused on the social impact of the blockchain as they are the success of their respective projects. Consider Ethereum’s Vitalik Buterin, who during the peak of the cryptocurrency market rally at year-end 2017 tweeted the following reminder to his followers –

Buterin went on to use Venezuela as an example, whose economy is in tatters. He was dismayed that bitcoin’s price posts were getting more traction than “how Venezuelans were being rescued by crypto.”

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If the corporate culture reflected Buterin’s mission rather than dangling a six- or seven-digit compensation package in front of recruits, they might have more success attracting top blockchain talent.

Talent Battle

Meanwhile, blockchain startups are creating roadmaps with product release dates obligating them to have top development talent in-house, all of which is leading to projects getting stuck and helping to fuel the hiring frenzy. It’s not solely blockchain startups, however.

Global corporations including certain FANG stocks are no longer waiting on the sidelines as ICOs raise billions of dollars and the cryptocurrency market cap has balloons to nearly $400 billion, all of which has placed a high bounty on the pool for blockchain talent. If you have any doubts, consider again Ethereum co-founder Buterin. As Hacked.com previously reported, Buterin tweeted about having received a job offer from Google.

David Schwartz, whose Twitter profile describes him as “one of the original architects of the XRP network,” told The Wall Street Journal how both a startup and a big tech play attempted to poach one of his team members, each of them offering the Ripple developer a million dollar signing bonus.

Meanwhile, the blockchain, a public immutable ledger where transactions are recorded and joined together in individual blocks, has become a catchphrase, one that can mean the difference between hits on a LinkedIn profile or not. According to the Journal story, there are thousands of available jobs posted on the social platform hunting blockchain talent through the early part of May, reflecting more than a 150% jump versus all of last year.

But just as regulators have said they don’t want to rush into crafting any policy in response to market performance, employers should similarly take a step back before throwing everything but kitchen sinks out to software developers. Some companies are developing talent in-house, which is another route to consider. But overall, hiring companies could be much more effective at recruiting blockchain talent if they understood the mission behind decentralization.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 7 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. Full disclosure, she's invested in bitcoin.




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Crypto Hedge Funds Grow 64% Over the Past Year as Institutions Embrace Digital Currency

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After spending much of the last eight years bashing cryptocurrency, Wall Street is beginning to embrace the digital asset class more intently than ever before. Case in point: the number of cryptocurrency hedge funds has increased 64% over the past year. As it turns out, Goldman Sachs isn’t the only institutional player pivoting toward cryptocurrency.

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The Rise of the Crypto Hedge Fund

There are now 287 hedge funds devoted to cryptocurrency trading, compared with 175 a year ago, according to data from Autonomous Next. Astonishingly, there were only 20 crypto hedge funds in existence in 2016.

Over the past year, at least 100 hedge funds have been launched for the sole purpose of trading cryptocurrency. At this rate, institutions will play an increasingly pivotal role in the digital currency market in the very near future.

Digital currency exchanges are betting big on institutional money. San Francisco-based Coinbase recently unveiled four new products designed to unlock up to $10 billion in institutional capital currently sitting on the sidelines. This includes a new custodial service that will provide institutions with a trusted steward to safeguard their digital assets.

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As for hedge funds themselves, April saw a huge turnaround in terms of profitability, as firms played the crypto-market rebound to great success. In the process, they gained more than 80% compared with March.

The Next Bull Market

Coinbase has put forward the position that institutional capital will be responsible for the next great bull market in cryptocurrency. If 2017 was the year of the retail investor, 2018 and beyond will largely be driven by institutions. A close examination of Google search trends seems to support this view.

The 2017 bull market was accompanied by a wave of new entrants into the cryptocurrency market, as evidenced by the surge in Google search results for terms like “bitcoin” and “cryptocurrency.” If we use the same metrics, we can conclude that cryptocurrency has lost its buzz among new traders. For example, a term like “cryptocurrency” achieved a Google Trends score of 12 in the most recent week, down from a perfect 100 at the start of 2018.

That said, hedge funds are still a long ways away from dominating the crypto market.  In fact, institutional adoption remains weak overall in spite of the recent growth. This was recently pointed out by Tom Lee, the Wall Street crypto analyst leading research at Fundstrat Global Advisors.

In Lee’s view, cryptocurrencies failed to rally during blockchain week because of adoption hurdles at bank as well as a lack of custodial tools among major institutions. Using the same logic, Lee concludes that institutional demand is one of the missing ingredients for a large rally in prices.

However, Lee has maintained a strongly bullish outlook on crypto assets, including a price forecast for bitcoin of $25,000 by the end of the year.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 418 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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