Facebook’s Novi Wallet Is Coming Soon, And Coinbase Will Help With The Logistics

Social media giant Facebook is gearing up to launch its Novi digital wallet, and it has partnered with crypto exchange Coinbase to help with some of the logistics.

Facebook Partners With Coinbase On Novi Wallet

Social media giant Facebook has chosen Coinbase as its custody partner as it gears up towards launching its Novi digital wallet. The new digital wallet is set to allow people to send and receive money to any part of the world instantly, securely, and with no fees.

In a blog post yesterday, Coinbase said it is supporting Novi via Coinbase Custody. The cryptocurrency exchange will keep user funds secure with its proprietary, fully segregated cold storage capability for managing private keys.

Coinbase said Novi users who take part in the pilot can buy Pax Dollar (USDP) via their Novi account, which the Coinbase Custody will hold on behalf of Novi. Novi users will have the option to transfer USDP between each other instantaneously.

The cryptocurrency exchange added that Novi users’ funds would be in the custody of Coinbase Custody Trust Company. It is a New York limited purpose trust company and regulated by the New York Department of Financial Services

This partnership is a huge win for Coinbase, one of the largest cryptocurrency exchanges in the world. Facebook said it decided to go with the Paxos Dollar, or USDP, because they want to test their systems with a stablecoin that has been working successfully for over three years. Furthermore, USDP has the regulatory and consumer protection attributes that Facebook was looking for.

Bitcoin Touches The 64k Level Again

The leading cryptocurrency has had excellent performance over the past few weeks. Thanks to its latest rally, Bitcoin has touched the $64k level again and could soon set a new all-time high above $65k if it maintains the current momentum.

btc
BTC/USD chart. Source: FXEMPIRE

The short and medium-term outlook of Bitcoin remains positive as most analysts believe it will rally towards the $100k level before the end of the year.

The NFT Space Will Get More Competitive As Coinbase And Others Enter The Game

The nonfungible token (NFT) space is experiencing massive growth at the moment, and more companies are now entering the sector.

Coinbase’s Entry Will Lead To Intense Competition In The NFT Space

Coinbase, one of the leading cryptocurrency exchanges in the world, is making an entry into the nonfungible token (NFT) space. This latest development will see Coinbase compete with other leading crypto exchanges Binance and FTX, in trying to control the new space.

The publicly listed cryptocurrency exchange announced yesterday that it would launch a marketplace that allows users to mint, collect and trade NFTs. Coinbase now urged its customers to sign up to a waitlist for early access to the NFT service.

Dubbed Coinbase NFT, the marketplace would come with social features and would also explore the creator economy. Hence, allowing Coinbase to attract people who make social media content to the platform.

Coinbase’s entry into the NFT space will bring more competition to the rising cryptocurrency and blockchain sector. In recent months, other leading crypto exchanges Binance and NFT, launched their NFT marketplaces. The entry into the NFT space by the leading crypto exchanges doesn’t come as a surprise, with more than $10 billion worth of NFTs sold in the previous quarter.

As more celebrities, athletes, sporting entities and entertainment companies adopt NFTs, it is clear that the sector could experience a rapid boom over the next few years. OpenSea remains the leading NFT marketplace in the world, accounting for more than 50% of the total transaction volume.

However, with the entry of Coinbase, FTX, Binance, and possibly more crypto entities in the coming months, the market competition would increase over the coming years.

eth
ETH/USD chart. Source: FXEMPIRE

Ethereum And Other Programmable Blockchains Are The Winners In the NFT Game

The NFT mania has been a huge win for the programmable blockchains like Ethereum. The NFTs are minted, launched and sold on programmable blockchains like Ethereum, Solana, Cardano and Tezos.

With the increasing adoption of NFTs and decentralized finance (DeFi), these blockchains and their cryptocurrencies will continue to experience a surge in their prices.

Crypto Exchange Coinbase Jumps on the NFT Bandwagon

Coinbase is diversifying its revenue stream. The leading U.S. cryptocurrency exchange is building a new non-fungible token platform called Coinbase NFT. The marketplace will give users the opportunity to “create, buy, sell and share NFTs,” according to the announcement.

Coinbase plans to launch its NFT platform before the end of the year. In the meantime, users can join a waitlist to start minting and selling these digital collectibles sooner than later. The waitlist hinges on customer referrals, rewarding users for spreading the word by giving them sooner access.

If early signups are any indication, Coinbase NFT is off to a solid start.

Coinbase is known for simplifying crypto investing for the mainstream, and its NFT platform will follow a similar model. The onboarding process seemingly does not require know-your-customer (KYC) protocols because users will self-custody their assets with their own wallets.

NFTs might be raking in billions of dollars in sales, but they are still considered a nascent market segment. Outside of crypto investors, they have mainly captured the attention of artists and celebrities. Coinbase is seemingly looking to change that. Coinbase NFT will start with the Ethereum network and then expand from there.

“The initial launch will support Ethereum based ERC-721 and ERC-1155 standards with multi-chain support planned soon after.”

Coinbase has been facing increased competition of late as more companies jump into the crypto trading fray. Online broker Robinhood is one recent example, and it has something Coinbase doesn’t — a zero-commission model.

NFTs are one of the latest crazes in the cryptocurrency industry, and while the market has its critics, it’s expected to stick around for the long haul.

Ups and Downs

Investors did not reward Coinbase for its NFT plans. In fact, the stock got punished in the session, falling nearly 3% to just below $250 per share.

With bitcoin trading above $50,000, however, the cryptocurrency market becomes increasingly appealing to investors, including those who might be catching a case of FOMO. Coinbase’s fee income, which is its biggest driver of profits, should benefit from higher trading volumes during the bull market.

Coinbase’s Q3 earnings are expected to come out on Nov. 9. NFT sales won’t be reflected until Q4 if the launch stays on track.

Coinbase Says Hackers Stole Cryptocurrency From at least 6,000 Customers

The hack took place between March and May 20 of this year, according to a copy of the letter posted on the website of California’s Attorney General.

Unauthorized third parties exploited a flaw in the company’s SMS account recovery process to gain access to the accounts, and transfer funds to crypto wallets not associated with Coinbase, the company said.

“We immediately fixed the flaw and have worked with these customers to regain control of their accounts and reimburse them for the funds they lost,” a Coinbase spokesperson said on Friday.

The hackers needed to know the email addresses, passwords and phone numbers linked to the affected Coinbase accounts, and have access to personal emails, the company said.

Coinbase said there was no evidence to suggest the information was obtained from the company.

News of the hack was earlier reported by technology news portal Bleeping Computer.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta)

 

The Other Side of the Coin: Can Coinbase Overcome a Slow Start on Wall Street to Recover its Value?

After floating on the cusp of a cryptocurrency market downturn, can we expect Coinbase to deliver a strong end to 2021 for investors?

Coinbase opted to launch on the Nasdaq via a direct listing in April 2021 with a reference price of $250 – however, the poor performance of the cryptocurrency market since the arrival of COIN and the threat of regulatory scrutiny has caused shares to dip below the company’s opening price.

Despite COIN struggling to hold its opening price, it’s important to acknowledge the company’s blistering fundamentals. Coinbase’s revenue climbed some 144% to $1.28 billion in 2020, before rocketing some 969% year-on-year to $4.03 over H1 of 2021.

The company also became profitable in 2020 with a net profit of $322 million, and accelerated these margins to net profits of $2.37 billion over the opening six months of 2021. At the same time, Coinbase’s trading volume accelerated by 142% to $193 billion in 2020, and then to $335bn and $462bn respectively across the first two quarters of 2021.

So with such mind-boggling numbers in mind, surely COIN’s poor market performance of late is merely a blip? Well, experts are split on the outlook of a stock that’s been battered by a wide range of external threats from regulators and the wider cryptocurrency market alike.

With this in mind, let’s take a deeper look into what the future holds for Coinbase as the world’s first publicly traded cryptocurrency exchange:

Arresting COIN’s Development

Despite its position as a leading cryptocurrency exchange and holding its market cap at around $50 billion at the time of writing, the outlook isn’t necessarily positive for Coinbase when considering the exchange’s exit velocity for 2021.

“In our view at the moment, it is not worth buying Coinbase shares amid recent news,” said Maxim Manturov, head of investment research at Freedom Finance Europe, in reference to SEC threats against the company’s rollout of a new lending feature and the recent decline in value of Bitcoin.

“Also, after the Q2 report, the company expects trading volumes to decline in Q3, which could lead to higher costs and lower profitability for the company,” Manturov added. “In the short term, this could put pressure on Coinbase’s price, which could lead to a weak rise in the company’s shares. For example, analysts at Mizuho Securities believe Coinbase may have lost some bitcoin market share, with retail users trading less and institutional investors’ returns continuing to fall.”

Although Coinbase has since scrapped its plans to introduce a cryptocurrency lending platform amidst threats of lawsuits from the US Securities and Exchange Commission, Manturov noted that it’s possibly worth waiting for Bitcoin to show signs of stability before looking to COIN as a long term investment option.

We’re seeing further evidence of Coinbase’s symbiotic relationship with Bitcoin in the wake of the Evergrande crisis within Chinese real estate. Although the cryptocurrency ecosystem is largely decentralized, investor sell-offs in traditional stocks, like that of Evergrande, can create profound problems in the world of digital finance – with Bitcoin’s value dropping 10% in the wake of the fire sale.

With this in mind, any investment in COIN must come with the awareness that a stock so intrinsically linked to crypto may also become severely affected by market downturns.

Luring Growth Investors

Despite there being legitimate concerns regarding the external pressures that Coinbase faces, the stock is still drawing interest from world-renowned investors.

Notably, Coinbase has lured in Cathie Wood as a speculative investor. The famed CEO of Ark Invest has allegedly built a combined interest of 5.95 million shares in Coinbase – amounting to a total of around $1.46 billion at the time of writing. This level of investment amounts to some 3.4% of total assets under management, making Coinbase one of Ark’s biggest collective holdings.

Wood’s faith in the stock stems from the wider belief that cryptocurrency adoption will continue to grow over the course of the coming decades as more companies opt to hold coins like BTC on their balance sheets.

(Image: Statista)

As the data above shows, there’s a clear and sustained rise in the prevalence of blockchain-based wallets over the course of the past six years. Coinbase’s fundamentals reflect a trend towards both higher assets on platform (AOP) and consistently greater trading volumes. Though the platform makes money on both the buy and sell aspects of crypto, it’s naturally better positioned to make more money if cryptocurrency prices are trending upwards.

Although the cryptocurrency landscape is impacted by many things, inflows typically correlate with higher cryptocurrency prices as new investors are attracted to appreciating assets – whilst existing users benefit from capital gains.

With this in mind, it’s worth zooming out of Coinbase’s recent trials and tribulations and taking into account the wider cryptocurrency ecosystem. As one of the world’s first crypto-oriented arrivals on Wall Street, COIN represents an excellent opportunity for investors to speculate on the future growth of Bitcoin and Ethereum whilst staying in tune with traditional stocks. When playing the long game, a bet on Coinbase represents a bet on the cryptocurrency ecosystem – which, historically speaking, has been a highly rewarding wager of late.

Coinbase Scraps Plans for Crypto Lending Program

The move comes days after U.S. regulators said it would sue Coinbase if it went ahead with its program allowing users to earn interest by lending digital assets.

“As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch the USDC APY program,” Coinbase’s blog post said.

USDC is a stablecoin that is pegged to the U.S. dollar and can be redeemed for $1 on a one-to-one basis.

The crypto exchange also said it has discontinued the waitlist for its USDC APY (annual percentage yield) program, a high-yield alternative to traditional savings accounts that would have paid lenders of USDC to Coinbase a 4% APY.

Coinbase, which said it has seen a rise in crypto interest account in recent times, had been planning to offer a principal guarantee to lenders of USDC in their Coinbase account.

It added that a 4% APY on USDC would provide a customer eight times the national average on high-yield savings accounts, based on a Bankrate.com survey of U.S. savings accounts in June 2021.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sohini Podder in Bengaluru; Editing by Shailesh Kuber)

Coinbase Secures US Contract in Throwback to Soured Deal

Coinbase continues to gain influence despite regulatory headwinds. The leading U.S.-based cryptocurrency exchange has secured a contract with the Department of Homeland Security that’s worth a potential $1.4 million, surpassing the amount of another similar mandate for the company. Based on the terms of the agreement, Coinbase will deliver “application development software as a service” for the U.S. Immigration and Customs Enforcement (ICE) division.

It’s not the first contract that Coinbase has secured with the government. The company was also selected by ICE in August to provide “computer forensics services” to the agency for just under $30,000. The latest contract has a start date of Sept. 16 with an end date in a year from now and the potential for an extension until 2024.

‘Bizarre’ Acquisition

The deal brought up some bad memories on social media for the link that it has to a soured acquisition Coinbase made two years ago. In 2019, Coinbase acquired a company called Neutrino, paving the way for it to perform blockchain analytics.

Coinbase was quickly blamed for not performing proper due diligence after it surfaced that Neutrino, which made spyware tools, had ties to repressive regimes. The exchange was accused of being “wildly out of touch with its customer base.” Now that very deal appears to be what has catapulted Coinbase into the arms of the ICE.

Jesse Powell, who is at the helm of competing cryptocurrency exchange Kraken, was among those to question the reasons behind the contract. He recalled “the even more “bizarre…acquisition [Coinbase] made and reputational hit they took to be able to offer this service to the government.”

Source: Twitter

The response to the deal on Reddit was similarly met with skepticism.

Regulatory Headwinds

Coinbase has shed about 25% of its value since going public in mid-April of this year.

The company is currently battling some regulatory headwinds as it seeks to introduce a lending product with decentralized finance (DeFi) characteristics. Nonetheless, Coinbase CEO Brian Armstrong is not backing down. The company has most recently filed an application to expand into derivatives trading seemingly for products such as bitcoin and Ethereum futures, where it would compete with the likes of the CME.

Coinbase Adds Support for Shiba Inu, Meme Coin Soars

Leading cryptocurrency exchange Coinbase announced it supports meme coin Shiba Inu for users. Coinbase customers can now trade Shiba Inu on Coinbase.com as well as the company’s mobile apps on iOS and Android.

Earlier this month, Coinbase listed Shiba Inu on its professional trading platform, Coinbase Pro, an addition that was initially announced in June but was delayed due to a technical glitch.

Shiba Inu is an Ethereum based decentralized meme token. It was created as an alternative to fellow meme coin Dogecoin, whose mascot is a Shiba Inu, a Japanese dog breed.

The Shiba Inu community cheered the move, sending the cryptocurrency soaring more than 20% in the last 24-hour period to $0.000008299. Trading volume in SHIB/USD was $243 million at last check based on CoinMarketCap data.

The Shiba Inu team is famous for gifting Vitalik Buterin with a large chunk of the Shib supply, which the Ethereum co-founder then sent to a charity.

Elon Musk Bump

Shiba Inu investors also recently celebrated when Tesla CEO Elon Musk, who is a known Dogecoin fan, posted a picture of a new puppy, a Shiba Inu. Musk said in June that his “Shiba Inu will be named Floki,” which is the name of a boat builder character in the Vikings series on The History Channel.

Musk’s big reveal captured the attention of the Dogecoin team, which tweeted in response that his “doge is shaped somewhat like a small bean.” The Doge price is currently trading more than 3% lower at $0.2375. On social media, Dogecoin investors tout the $1 threshold as a target price for the meme coin.   

Source: Twitter

Coinbase Moves

Coinbase announced the Shiba Inu listing in the face of regulatory scrutiny. The company is doing battle with the U.S. SEC over a lending product it wants to launch in October. Regulators have warned Coinbase that if it follows through with its plans, the SEC is prepared to sue.

In addition, Coinbase has started the process to begin trading cryptocurrency derivatives. The company has filed an application with the National Futures Association, which if approved would put it under the regulatory oversight of the CFTC. Coinbase would be joining the likes of the CME, which currently supports futures trading in bitcoin and Ethereum.

S&P 500 Snaps Losing Streak With Tax Hikes, Inflation Data on Horizon

The Dow Jones Industrial Average also advanced, but the Nasdaq Composite Index ended lower.

Investors favored value over growth, with stocks set to benefit most from a resurging economy enjoying the biggest percentage gains.

“There are probably not a lot of positive surprises coming this month,” said Liz Young, head of investment strategy at SoFi in New York. “We’re having another period of volatility where I think that rotation could go back to cyclicals and the reopened trade, as the 10-year bond rate slowly grinds higher through the end of the year.”

Market participants are focused on the likely passage of U.S. President Joe Biden’s $3.5 trillion budget package, which is expected to include a proposed corporate tax rate hike to 26.5% from 21%.

Goldman Sachs analysts see the corporate tax rate increasing to 25% and the passage of about half of a proposed increase to tax rates on foreign income, which they estimate would reduce S&P 500 earnings by 5% in 2022.

The Labor Department is due to release its consumer price index data on Tuesday, which could shed further light on the current inflation wave and whether it is as transitory as the Fed insists.

“I don’t see inflation settling back down under 2% where it was pre-pandemic,” Young added. “Even if some of those transitory forces weaken, we will still stay at a higher rate than we were before.”

Other key indicators due this week include retail sales and consumer sentiment, which could illuminate how much the demand boom driven by economic re-engagement has been dampened by the highly contagious COVID-19 Delta variant.

The Dow Jones Industrial Average rose 261.91 points, or 0.76%, to 34,869.63, the S&P 500 gained 10.15 points, or 0.23%, at 4,468.73 and the Nasdaq Composite dropped 9.91 points, or 0.07%, to 15,105.58.

Of the 11 major sectors in the S&P 500, healthcare suffered the largest percentage loss, while energy, buoyed by rising crude prices was the biggest gainer.

Shares of vaccine makers Moderna and Pfizer Inc sank 6.6% and 2.2%, respectively, after experts said COVID booster shots are not widely needed.

Coinbase Global Inc announced plans to raise about $1.5 billion through a debt offering aimed at funding product development and potential acquisitions. The cryptocurrency exchanges shares slid 2.2%.

Salesforce.com Inc dipped 1.2% as rival Freshworks Inc’s regulatory filing indicated that the business engagement and customer engagement software company is aiming for a nearly $9 billion valuation in it U.S. debut.

Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and one new low; the Nasdaq Composite recorded 53 new highs and 71 new lows.

Volume on U.S. exchanges was 10.30 billion shares, compared with the 9.29 billion average over the last 20 trading days.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Stephen Culp; Additional reporting by Krystal Hu in New York and Ambar Warrick in Bengaluru; Editing by Richard Chang)

Worries Over Economic Recovery Shake World Stocks, Wall Street

Accommodative central bank policies and optimism about reopening economies have pushed equities to record levels but concerns are growing about the impact of rising coronavirus infections due to the Delta variant.

Markets are also still assessing data from last week which showed the U.S. economy created the fewest jobs in seven months in August, and wondering how the U.S. central bank will respond.

The Fed should move forward with a plan to taper its massive asset purchase programme despite the slowdown in job growth, St. Louis Federal Reserve Bank President James Bullard said in an interview with the Financial Times on Wednesday.

“Everything is tapering, tapering, tapering. We are looking at every single central bank – when is the next one?” said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management, though he added: “The Delta variant impact is still running like a wild card”.

The Dow Jones Industrial Average fell 76.74 points, or 0.22 percent, to 35,023.26, the S&P 500 lost 7.8 points, or 0.17 percent, to 4,512.23 and the Nasdaq Composite dropped 87.96 points, or 0.57 percent, to 15,286.37 by 2:17 p.m. EST (18:17 GMT).

MSCI’s world equity index fell 0.41% by after seven consecutive days of gains.

European stocks fell 1% and hit their lowest in nearly three weeks. Britain’s FTSE 100 struck two-week lows, down 0.75%.

“September is the month investors confront reality,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, pointing to uncertainty over the Fed’s tapering plans and inflation fears as a reason investors are taking profits or reallocating funds.

The coronavirus Delta variant and concerns over the economic recovery were also weighing.

“What is likely ahead of us is a continued but temporary deceleration of economic activity of one to three months which likely started in August,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Federal official Robert Kaplan was due to speak later on Wednesday.

In Europe, markets are focused on whether the European Central Bank will this week begin to scale back its bond purchase programme.

The dollar paired some gains after jumping to a one-week high against a basket of other major currencies. It also hit a one-week peak against the the single currency and was trading at $1.1826.

The dollar’s strength offset investors’ risk aversion to pressure bullion to a two-week low. Spot gold prices fell 0.1%.

Longer-dated U.S. government bond yields slipped on Wednesday coming off a two-day climb after labor market data and ahead of an auction by the Treasury in 10-year notes. Yields on 10-year Treasury notes fell to 1.3495%, retreating from this week’s eight-week highs.

Germany’s 10-year Bund yield also hit eight-week highs before edging lower to -0.32% .

“Fears that central banks might start to taper their asset purchases seems to have knocked away a little confidence, particularly given tomorrow’s ECB decision where many expect we’ll begin to see the start of that process, not least with inflation there running at its highest levels in almost a decade,” Deutsche Bank analysts said in a note.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.77%, stemming an eight-session string of gains.

Chinese blue chips dropped 0.41%, weighed down by recent soft data in the world’s second-biggest economy.

But Japan’s Nikkei jumped 0.89% and hit a five-month high, helped by revised gross domestic product growth figures beating expectations.

Bitcoin continued its rout, down 1.1%.

Shares of Coinbase Global Inc dropped over 2% after the firm revealed it has received a legal notice from the top U.S. markets regulator.

U.S. crude oil jumped 1.39% to $69.32 a barrel and Brent crude rose 1.4% to $72.69 per barrel, with prices supported by a slow restart to production in the Gulf of Mexico after Hurricane Ida hit the region.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Alun John in Hong Kong; Editing by Kenneth Maxwell & Shri Navaratnam, Editing by William Maclean and Nick Tattersall)

Why Coinbase Stock Is Down By 4% Today

Coinbase Stock Declines As SEC Says That It May Sue The Company Over Coinbase Lend

Coinbase stock found itself under pressure after the company stated that it received a letter from SEC regarding its Coinbase Lend program. The Lend program will allow customers to earn interest on select assets on Coinbase.

According to Coinbase blog, the company received a Wells notice which means that SEC intends to sue Coinbase in court. Coinbase stated that it was proactively engaging with SEC about Lend for almost six months. SEC believes that Lend involves a security, while Coinbase believes that this claim is without merit.

As a result of these developments, Lend will no be launched until at least October. Not surprisingly, Coinbase stock declined on the news as investors typically get nervous when SEC wants to sue a company.

What’s Next For Coinbase Stock?

Coinbase shares have already been under pressure due to the recent sell-off in crypto markets, and news from SEC served as an additional bearish catalyst for the stock.

However, it should be noted that market’s reaction was relatively calm. Coinbase is a volatile stock and big moves are normal for the company’s shares.

At this point, it is not clear whether we’ll see other developments in the Lend story in the upcoming weeks as the product has not been launched yet, and Coinbase will likely use the time to enter into additional discussions with SEC in an attempt to clarify the regulator’s position.

Meanwhile, the stock will remain in the hands of market sentiment towards crypto-related assets. In case the current sell-off in crypto markets gets stronger, crypto-related assets will find themselves under more pressure which will be bearish for Coinbase stock.

For a look at all of today’s economic events, check out our economic calendar.

Cryptocurrency Prices Tumble and Exchange Trading Falters as Snags Crop Up

Shares of blockchain-related firms also fell as crypto stocks were hit by trading platform outages. But the major focus was on El Salvador, where the government had to temporarily unplug a digital wallet to cope with demand.

Bitcoin, the world’s biggest and best-known cryptocurrency, tumbled more than 17% to $43,000 before paring some losses to trade down 9.20% at $47,140.27. Earlier bitcoin had hit a session high of $52,948.00.

Smaller rival ether, the coin linked to the ethereum blockchain network, fell 11.99%.

Major cryptocurrency exchanges Coinbase Global Inc and Kraken said they faced delays in some transactions on their platforms.

Coinbase said some transactions were delayed or canceled at “elevated rates” and that “our apps may be experiencing errors.” The exchange later said issues with Coinbase card swipes were resolved and that transactions were going through normally.

The Gemini exchange said it temporarily entered a full-maintenance period to address an exchange-related issue that caused performance trouble.

Coinbase shares slid 4.02%.

Anything related to cryptocurrencies appeared to suffer. Cryptocurrency miners Riot Blockchain fell 7.38% and Marathon Digital Holdings slipped 7.76%.

Shares of MicroStrategy Inc, a BTC buyer and business intelligence software firm, fell 7.64%.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Herbert Lash in New York, additional reporting by Saikat Chatterjee in London and Aaron Saldanha in Bengaluru; editing by Sujata Rao and Rosalba O’Brien)

Coinbase Puts More Skin in the Crypto Game

Shares of cryptocurrency exchange Coinbase are up nearly 4% on Friday after the stakes were raised with its cash pile. CEO Brian Armstrong revealed on Twitter that Coinbase has received the green light from the board to buy more than USD 500 million in cryptocurrencies. The digital assets will be added to the balance sheet to bolster Coinbase’s existing crypto portfolio.

Armstrong didn’t stop there. Coinbase will also be directing 10% of its bottom line to cryptocurrencies with plans to increase the allocation “as the crypto economy matures,” he noted. Coinbase’s boss wants to integrate cryptocurrencies more deeply into the company’s operations, as currently it is run on a combination of fiat money and crypto.

Bitcoin, Ethereum, Proof of Stake and DeFi

Armstrong further explained that the exchange’s crypto exposure will be determined by their users by “matching [Coinbase’s] crypto custodial balances.” In addition to bitcoin, Coinbase is buying Ethereum and other coins tied to popular market themes. The announcement stated,

“This means we will become the first publicly traded company to hold Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform, in addition to bitcoin, on our balance sheet.”

Market participants cheered the development, though Galaxy Digital chief Mike Novogratz was quick to point out that his firm “has been doing all this in Canada since 2018.”

Bitcoin Bandwagon

Coinbase isn’t the only U.S. company to gain exposure to bitcoin on the balance sheet. MicroStrategy, which is run by BTC bull Michael Saylor, holds more than 100,000 bitcoins, worth greater than USD 4 billion based on the latest price, in its treasury.

Jack Dorsey’s payments company Square has also been buying thousands of bitcoins and has 5% of its balance sheet in BTC. Not to be outdone, Elon Musk’s Tesla doled out USD 1.5 billion for bitcoin recently. Musk also expects that the EV maker will resume accepting bitcoin as a payment method again once the cryptocurrency’s carbon footprint is reduced.  His space venture, SpaceX, also owns some bitcoin.

Coinbase Run

Coinbase shares are inching closer to the USD 260 threshold, which the stock touched on during Friday’s session but retreated somewhat.

For the month of August so far, Coinbase’s stock is up 8% on the heels of solid quarterly results. According to traders on social media, the setup for Coinbase shares is looking good.

Coinbase Off to a Running Start as Platform Grows

Cryptocurrency exchange Coinbase has reported its highly anticipated second-quarter results. The San Francisco-based company saw its shares trade under pressure leading up to the earnings report on Tuesday. On Wednesday morning, however, the stock climbed 6% higher once the results were clear. Coinbase shares are trading at approximately USD 285 at last check compared to a peak of more than USD 400 on the stock’s maiden day of trading in April.

In Q2, Coinbase surpassed Wall Street expectations, with total revenue coming in at USD 2.2 billion, including USD 1.9 billion in transaction revenue. Net income came in at USD 1.6 billion thanks in part to a tax benefit, while EBITDA was USD 1.15 billion.

Trading Volume Surge

Coinbase experienced trading volume of USD 462 billion, surpassing expectations of USD 382 billion as investors flocked to cryptocurrencies like Bitcoin and Ethereum. The high volatility in cryptocurrency prices is generally positive for crypto exchanges considering they generate fee income from the trades.

In particular, Coinbase experienced a surge in demand for Ether, which actually came in higher than the trading volume for the largest cryptocurrency, bitcoin. Ethereum represented 26% of Coinbase’s overall trading volume in Q2 vs. 24% for bitcoin. “Other” crypto-assets represented the remaining 50% of trading volume.

Source: Coinbase

Another closely watched metric was the number of retail monthly transacting users, and here again, Coinbase delivered. The company saw a 44% spike in this figure to 8.8 million vs. Q1 results. Cryptocurrency prices were particularly volatile in the period, with bitcoin attaining a fresh all-time high in April only to tumble nearly 50% the following month. The Ethereum price followed a similarly volatile path in the quarter.

“Despite price movements, we saw billions of dollars of net asset
inflows and new customers added throughout Q2.”

In addition, institutional adoption appears to be growing with more than 9,000 institutions using the Coinbase platform. Coinbase revealed that it has inked partnerships with high-profile investors including:

  • Elon Musk
  • SpaceX
  • Tesla
  • Third Point
  • WisdomTree Investments
  • PNC Bank

Growing Crypto Demand Is Good for Coinbase

In addition, demand for bitcoin could strengthen after movie chain AMC Entertainment announced that it plans to start accepting BTC payments by year-end. Bitcoin has a greater chance of reaching mainstream adoption as more businesses potentially follow in AMC’s footsteps.

Investors who are bullish on digital assets such as bitcoin and Ethereum might also be bullish on Coinbase’s stock. The more that the cryptocurrency industry grows, the better it is for Coinbase shares.