A Week Full of Coinbase (March 1, 2021)

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Good morning. Welcome to Monday Markets Wrap-up, part of our new series: BitPinas Daily. We will look back at all the major news and updates that happened this week. Crypto is global, but sometimes news that matters happens while we sleep. So we bring to you what’s happening in our space here and abroad. We highlight three to four important news of the past week and list down the rest.  (Except that we have more than 8 stories this week.)

Market Price as of March 1, 2021:

Bitcoin$44,970-3.61%
Ethereum$1,416.66-4.28%
BNB$209-7.52%
DOT$33.80-1.04%
ADA$1.30-2.99%
SLP$0.03-22.1%


Bitcoin closed February 28, 2021, at $44,970 per BTC. We’re down 19% in the last 7 days and up 59% since the year began. This is also 23% below the all-time high of $58,640, which was hit on Feb. 21, 2021.

Bitcoin’s market capitalization stands today at $861,351,790,172 which is 59% of the entire cryptocurrency market. The entire crypto market, by the way, now has a market cap of $1,443,281,352,119 (-0.8%).

On the table above, there’s the cryptocurrency SLP. If you wonder what that is, check out this article: Playing Axie Infinity vs Minimum Basic Salary in the Philippines.

Coinbase

35% Retail, 65% Institutions make Up Coinbase’s Volume By Customer Segment

Coinbase had released its S-1 registration statement filing with the U.S. SEC, detailing its business and plans. Here are just some of the information that stands out:

  • Ticker Symbol will be ‘COIN’
  • It had $1.1 billion in net revenue in 2020 
  • $482.9 million net revenue in 2019

So important are the following two charts that implies retail participation in Coinbase has decreased compared to institutional participation. (Charts are from The Block)

If it wasn’t clear above, here’s the other chart showing retail vs institutional participation:

The company intends to go public and get listed on the NASDAQ this year.

Coinbase Hints About Issuing Its Own Token

The company’s S-1 filing hinted that it may raise additional capital to help it grow. How they will do this might be in the form of issuing new stock or “it could take the form of a blockchain token” that is tied to customer reward or loyalty programs.

Sounds like BNB. 

It doesn’t mean that they will actually issue their own tokens but the filing suggested they have considered it, The Block reported

Coinbase Risks

DeFi, Satoshi’s Unmasking Identified as Risks to Coinbase

Everytime a company wants to go public, it also needs to tell the SEC what are the risks to its business. Coinbase identified the following:

  • The identification of Satoshi Nakamoto. Last year around May, the markets were rattled when some very old Bitcoins moved for the first time. Some analysts said it could possibly be Satoshi’s. 
  • Negative perception of Bitcoin or Ethereum. It cited the unpredictability of the coverage of cryptocurrencies in mass media and social media.
  • Decentralized Finance. “We compete against a growing number of decentralized and noncustodial platforms and our business may be adversely affected if we fail to compete effectively against them.”
  • Company’s revenue is dependent on the volatile prices of Bitcoin
  • Potential security breaches and future litigation.

Ethereum 

Ethereum’s Biggest Mining Pools Have Opposing Stance on EIP-1559

EIP-1559 is a planned upgrade to Ethereum that would burn part of the transaction fees as profits to ETH holders instead of miners. The goal of which is to improve network security but really, it’s really to ensure transactions fees are not high as it is today. 

And who are earning much from transaction fees? The miners.

But the two biggest mining pools in Ethereum don’t share the same view about this improvement. 

F2Pool is the third-largest Ethereum pool with 11% of the network’s hash rate. They support the proposal. 

“Today, the general community along with core developers are siding with evolving Ethereum to include EIP-1559. It is important to side with the users and core contributors,” the group said in a blog post. 

Sparkpool, the largest mining pool with about 24% of the hashrate, said it opposes the proposal.

Get updated with EIP-1559 here:

Ethereum Mining’s Monthly Revenue Reaches All time high over $1 billion in February

It does not come as a surprise that Ethereum mining revenue has reached $1 billion this month. From that number, $541 million comes from transaction fees. Transaction Fees!

Here’s the chart from The Block:

The publication also noted that the growth reflects the surging interest in ETH mining, as demonstrated by GPU shortages and Nvidia releasing a new line of dedicated crypto mining hardware.

Bitfinex, Tether

Bitfinex and Tether (the company) settle their New York Case

In 2019, the New York Attorney General’s (NYAG) office charged that Bitfinex had used Tether’s funds to cover $850 million it had lost to Crypto Capital, a payment professor. At that time, the story is that Crypto Capital’s funds were seized by the government in Poland, Portugal, and the U.S. 

The other point of contention is that the NYAG alleged that for a certain period of time, USDTs (the stablecoin by Tether (the company))is not backed 1:1 by Tether’s dollar reserves in a bank account.

Of course, the case is now settled with Bitfinex and Tether not admitting or denying anything. Both companies agreed to pay $18.5 million as part of the settlement.

Square

Square Reports $4.57 Billion in Bitcoin Sales for 2020 via Cash App

“During the full year 2020, we saw significant growth in bitcoin revenue year over year. While bitcoin revenue was $4.57 billion in 2020, up approximately 9x year over year, bitcoin gross profit was only $97 million, or approximately 2% of bitcoin revenue,” Square said.

Also very interesting

“In 2020, more than three million customers purchased or sold bitcoin on Cash App, and, in January 2021, more than one million customers purchased bitcoin for the first time.”

By the way, Square bought more Bitcoins:

“Square also announced today that it has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million.”

Nvidia

Nvidia Expects $50 Million Revenue from Its Ethereum Mining Product

Nvidia is planning to sell industrial Ethereum mining rigs and expects them to contribute $50 million in revenue in its first quarter of sales. 

The company knows that its gaming GPUs are being used to mine Ethereum but admitted they don’t have a way to quantify them. Nevertheless, they estimated between $100 million – $300 million of 2020 Q4 revenue are from cryptocurrency mining.

PDAX

PDAX Press Conference

PDAX held a press conference organized by the Geiser Maclang group to discuss the issue regarding the system outage that happened, which caused, PDAX has claimed, unfunded orders and system wide errors. There were also reports of users able to buy BTC at Php 300,000 (roughly $6,000) and were also able to custodize and transfer those Bitcoins out of the exchange on February 16, 2021. 

Axie Infinity

Axie Infinity’s First Inter-Scholarship Tournament

What else is happening

  • Bitcoin Transfers To Exchanges Surged, More Selling Pressure in the Future?
  • ETH briefly drops to $700 on Kraken
  • Beeple’s Digital Art Now at $3 million in Christie’s
  • Michael Saylor Wants More Bitcoin
  • Ancient 100 BTC Moved For The First Time Since 2010

This article is published on BitPinas: A Week Full of Coinbase (March 1, 2021)

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Michael Mislos

A business ad graduate from the Pamantasan ng Lungsod ng Maynila, Mike is the website manager of Bitpinas.com. He is responsible for almost every content you see on the site, from topic/news selection to editing of articles. Mike believes correct information about blockchain and cryptocurrency can empower people to make accurate decisions about the industry, which, in turn, should deter bad actors from taking advantage of crypto & blockchain. [Telegram @mikemislos]