OpenSea Killer, Coinbase NFT Marketplace, Sees ‘Insane’ Interest, Over 1M Users on the Waitlist

OpenSea Killer, Coinbase NFT Marketplace, Sees ‘Insane’ Interest, Over 1 Million Users Sign-up on the Waitlist

In a matter of 24 hours, Coinbase’s NFT marketplace has garnered an extremely positive response.

“We are getting a LOT of signups – so grateful for all your interest,” Coinbase vice president of product Sanchan Saxena wrote on Twitter.

“We are seeing insane loads on our servers and our team is working hard to get this resolved.”

The yet-to-be-launched marketplace for NFTs saw more than one million sign-ups on its waitlist on the very first day it opened, reported Bloomberg citing a person familiar with the situation.

In August, Coinbase had said that its customer usage had slowed at the start of the third quarter due to the crypto prices going down and that in response, it is seeking to diversify its revenue. NFT marketplace is the move in that direction.

“Fees are more likely to mirror retail than institutional crypto-trading commissions,” wrote Bloomberg Intelligence’s senior fintech analyst Julie Chariell in a report.

“NFT trading at our 3% fee estimate would bring much more revenue per trading dollar, along with less volatility to Coinbase operations than the crypto trading platform.”

While some of the signups could be duplicates and spam, it is extremely clear that Coinbase’s NFT extension has become a hot topic already. These numbers will beat the popular marketplace OpenSea very easily.

OpenSea’s total traders’ overtime on Ethereum, those registered users who have made at least one transaction, are currently at 535,345 while monthly active traders made a 281,400 high in September, according to Dune Analytics.

In the first half of 2021, Opensea had increased its market share from just 35% to a whopping 95%. Of the $2.8 billion spent on NFT marketplaces last month, the majority of it, $2.72 billion, changed hands on OpenSea.

But now, this dominance is being threatened by other entrants. After the leading crypto exchanges Binance and FTX jumped in this week, Coinbase also entered this race to lead the NFT marketplace space.

With its 68 million users, Coinbase can further expand the NFTs audience by making it “more accessible,” effortless, and putting the complexity behind the scenes.

In other news, OpenSea said it recently patched security flaws that would have allowed bad actors to loot its users’ digital crypto wallets. The issue was first brought to the attention by the researchers of Israel-based cybersecurity company Check Point, which noted that the attacker used “malicious” NFTs to lure users in.

“Security is fundamental to OpenSea….we investigated the matter and implemented a fix within an hour of it being brought to our attention,” said the company in a statement.

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Author: AnTy

Bearish Still? Coinbase CoFounder’s VC Firm Is Raising Over A Billion Dollars to Invest in Startups

Bearish Still? Coinbase CoFounder’s VC Firm Looks to Raise Over a Billion Dollars to Invest in Startups

Cryptocurrency venture capital firm Paradigm is looking to raise more than $1 billion for its new fund that will invest in startups.

The fund could weigh between $1.25 billion and $1.5 billion, first reported by CoinDesk citing an investor deck.

Co-founded by cryptocurrency exchange Coinbase’s Fred Ehsram, the firm aims to close its fundraising efforts on November 12.

Besides raising funds from its limited partners, they are also reportedly seeking a minimum general partner commitment of 1%. The firm has also been doing the rounds among family offices recently.

Additionally, the firm is hiring Matthew Mizbani of hedge fund Coatue Management as a partner. Reportedly, Mizbani, who previously worked at Morgan Stanley and Two Sigma, has been hired for the new fund.

While crypto prices are slowly moving still, money in the private market continues to flow. According to a report from Bank of America, VCs poured in $17 billion in crypto projects in the first half of 2021, “dwarfing” the $5.5 billion from the same period last year.

In Q3, another $8 billion have been injected in private investment across 423 deals.

In late June this year, VC giant Andreessen Horowitz (a16z) had also announced that it had raised a whopping $2.2 billion for its third crypto fund — the industry’s largest crypto-related fund to date.

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Author: AnTy

US Homeland Security Signs a $1.4 Million Deal with Coinbase Analytics

US Homeland Security Signs a $1.4 Million Deal with Coinbase Analytics

The crypto exchange signed its largest “law enforcement sensitive” federal deal yet for its Coinbase Analytics software.

The Immigration and Customs Enforcement (ICE) branch of the US Homeland Security has inked a $1.36 million deal with the cryptocurrency exchange Coinbase.

According to the Federal Procurement Data System, this contract has been given for “business application” and “application development software.” The contract further reads, “This requirement is LAW ENFORCEMENT SENITIVE[sic], therefore minimal information will be provided publicly.”

According to the contract summary, the deal uses Coinbase’s blockchain tracing software, Coinbase Analytics, for $455,000 for one year, which goes up to $1.4 million if extended through 2024.

This isn’t Coinbase’s first contract with the ICE, which paid the company $29,000 for its forensic software on the basis that Coinbase was “the only vendor who can reasonably provide the services required by the agency.”

The latest deal is worth more than 40x of the last time and is Coinbase’s largest federal contract yet.

Last year, it became public that Coinbase wanted to sell its analytics tool to two US government branches: the Drug Enforcement Agency and the Inland Revenue Service.

Coinbase Analytics was formerly known as Neutrino before the exchange acquired it in 2019 for $13.5 million.

The acquisition was a controversial one as Neutrino was founded by the members of the Italian spyware company Hacking Team. Last year, CEO Brian Armstrong expressed his “mistake” of making the purchase and laid off the dubious members of the team.

At the time, he also stressed that information offered in its Analytics software “has always been kept completely separate from Coinbase internal data.”

Coinbase CEO further said the company wanted to recoup some costs and build relationships with law enforcement. Hence, it decided to sell its software to government agencies.

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Author: AnTy

A Flood of Demand Has Coinbase Boosting the Size of its Debut Junk-Bond on Lower Rates

A Flood of Demand Has Coinbase Boosting the Size of its Debut Junk-Bond on Lower Rates

Moody initiated a debit-issuer rating for Coinbase at non-investment grade or junk, citing an “uncertain regulatory environment and fierce competition” for not rating the company higher.

The demand for the crypto sector in the traditional markets is so high that cryptocurrency exchange Coinbase has to boost the size of its junk-bond offering to $2 billion from $1.5 billion.

In fact, at least $7 billion of orders poured in, according to a Bloomberg report citing a person with knowledge of the matter.

“Institutional investors are aggressively buying Coinbase debt,” said Su Zhu, CEO, and co-founder of Three Arrows Capital. “Huge endorsement of supercycle.”

Coinbase had announced that it is raising debt just this week, and now it has sold equal amounts of 7-year and 10-year bonds at interest rates of 3.375% and 3.625%, respectively, which is lower than the initially discussed borrowing costs.

The new bonds are rated one step below investment grade, and according to Bloomberg bond indexes, a similarly rated debt has a 2.86% yield on average.

Before Coinbase (COIN), MicroStrategy (MSTR) sold $500 million of notes in June to fund its Bitcoin purchases. Meanwhile, the crypto exchange is earmarking its proceeds for general corporate purposes, including product development and potential mergers and acquisitions.

“The strong demand is clearly a big endorsement by debt investors,” said Julie Chariell, an analyst at Bloomberg Intelligence.

Non-Investment Grade Rating

Moody’s Investors Service initiated a debit-issuer rating for Coinbase at non-investment grade or junk, citing an “uncertain regulatory environment and fierce competition” as the reason for not rating the company an investment-grade debt issuer. Moody’s analysts in a report published Tuesday wrote,

“Coinbase’s financial profile suggests investment grade credit strength, but for now the uncertain regulatory environment and fierce competition offset these strengths.”

The credit rating agency assigned a Ba1 rating to Coinbase’s senior guaranteed notes, saying three factors viz. increased regulatory clarity, a big expansion to boost revenue, and prudent cost management during fallow periods could lead to an upgrade of Coinbase’s overall rating.

According to Moody, the fact that Coinbase earns “a percentage of the notional value of trades matched on its platform” can be “very lucrative” in an up market, but when prices decline, the firm’s transaction revenue will also decline.

And while Coinbase is diversifying its products and expanding its subscription-based revenue to address its reliance on transaction revenue,

“it will take time for this strategy to have a material effect.”

And, of course, regulatory uncertainty is a big risk. Recently, Coinbase said they are getting pushback from the SEC on the launch of its lending product. On Tuesday, SEC Chief Gary Gensler said that crypto lending and staking services fall under securities laws.

“Given the novelty of crypto assets, many questions remain unanswered relating to the future regulatory frameworks of the plethora of tokens, blockchains and products and services that are part of decentralized finance.”

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Author: AnTy

No, Coinbase Has Not Relisted XRP

Late on Thursday, some cryptocurrency market participants got excited to see XRP on Coinbase, which was a surprise as earlier this year, on January 19, Coinbase “fully” suspended trading in XRP.

The San Francisco-based cryptocurrency exchange announced the delisting of XRP back in late December, just like the majority of the trading platforms in the country. The delisting came in the light of the Securities and Exchange Commission (SEC) charging Ripple and its two key executives, co-founder Chris Larsen and CEO Brad Garlinghouse, for the sale of $1.3 bln unregistered securities.

But on Sept. 9, some users found XRP markets on the exchange that gave way to speculation that Coinbase has relisted the crypto asset.

But then, a few hours later, Coinbase put an end to it all, saying it was a technical issue.

“As previously announced, Coinbase has suspended trading in XRP. Due to a technical issue, XRP was temporarily viewable on the Coinbase Pro mobile app for some customers but was not tradeable,” clarified the exchange on Twitter.

Still, this was enough to send the price of XRP soaring from $1.1 to $1.244 but only to drop back to $1.04 a few hours later. As of writing, XRP is trading at $1.10 with a market cap of $51 bln as the 7th largest crypto asset.

While some people were excited about their favorite crypto asset being back on the biggest cryptocurrency exchange in the US, others saw this “issue” as Coinbase striking at the SEC for hindering its plans to launch its new lending product.

As we reported earlier this week, Coinbase shared that they have received a Wells Notice from the SEC for its Coinbase Lend product that allows its users to earn interest on their crypto holdings, starting with 4% on USDC.

Interestingly, Ripple CEO Garlinghouse tweeted the Die Hard GIF with the text “Welcome to the party, Pal” to Armstrong’s tweet discussing the “really sketchy behavior” from the SEC.

The same day, Garlinghouse released a blog post on the Ripple website titled “The SEC’s Attack on Crypto in the United States.”

“With the latest SEC cryptocurrency regulation tightening its grip on greater investor protection on digital currency, we remain confident after reviewing the SEC’s complaint today that we are on the right side of the law and of history.”

“Nothing will fundamentally alter our trajectory.”

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Author: AnTy

SEC Chairman Gary Gensler Targets Crypto Lending Platforms, Starting with Coinbase Lend

SEC doesn’t want Coinbase Lend to allow its users to earn a 4% interest rate on USDC “over 8x the national average for high-yield savings accounts.”

Coinbase has been warned by the US Securities and Exchange Commission (SEC) against launching a new product, Lend, that allows its users to earn interest on their crypto holdings.

The biggest crypto exchange in the US said it had received a Wells notice saying the agency will bring an enforcement action against them if the company goes ahead with its product. Coinbase said that it plans to delay the launch at least until October.

Coinbase Lend allows users to earn a 4% interest rate on USDC stablecoin, which it says is “over 8x the national average for high-yield savings accounts.”

In the company blog post, Paul Grewal, Chief Legal Officer, said they had been proactively engaging with the SEC about Lend for nearly six months. But didn’t get any response from the agency other than that the SEC considered Lend to involve security.

Instead of providing an explanation, the SEC has opened a formal investigation and has asked for documents and written responses, along with the name and contact information of every single person on their Lend waitlist.

“We have not agreed to provide that because we take a very cautious approach to requests for customers’ personal information. We also don’t believe it is relevant to any particular questions the SEC might have about Lend involving a security, especially when the SEC won’t share any of those questions with us,” said Grewal.

Coinbase CEO Brian Armstrong also took to Twitter to share the “really sketchy behavior” from the SEC.

He also pointed out how in his confirmation hearing, SEC Chair Gary Gensler said that it is “important for the SEC to provide guidance and clarity.” And now, they are doing exactly the opposite.

Earlier that month, in an interview with FT, Gensler asked crypto companies to “Talk to us, come in,” adding, existing platforms are “begging for forgiveness, rather than asking for permission.” And when Coinbase did just that, the SEC didn’t provide any explanations.

“If you don’t want this activity, then simply publish your position, in writing, and enforce it evenly across the industry.”

As we reported, Gensler has been targeting two areas: crypto trading and lending platforms and stablecoins that are embedded on these platforms. He also asked for legislative priority on them, whether centralized or decentralized.

The CEO then argued that while SEC claims to be working to protect investors and create fair markets, who exactly “are they protecting here and where is the harm?”

Armstrong also met with every regulator and branch of government in the DC that he could in May this year except the SEC that “refused” to meet him, “saying “we’re not meeting with any crypto companies.” This was right after we became the first crypto company to go public in the US,” he said.

In response to Armstrong’s Twitter thread, Dallas Mavericks’ Mark Cuban advised him to go on the offensive.

Meanwhile, the crypto community pointed to the fact that Gensler is a former Goldman Sachs partner and speculated that the banking industry is making the moves behind the curtain to try and curb the crypto industry that is revolutionizing finance and working on putting them out of business. Others speculate that it could be a personal political power grab by SEC leadership.

“Hopefully the SEC steps up to create the clarity this industry deserves, without harming consumers and companies in the process. America could really use us all working together to figure this out right now,” concluded Armstrong.

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Author: AnTy

BTC Shoots Above $50k as Funds Start Recording “Modest” Inflows, Ether’s Inflation Rate on A Downtrend

Bitcoin has hit $50,000 yet again.

The leading cryptocurrency went as high as $50,350 on Coinbase today, a level last seen on August 23rd and before that May 15.

Confidence is returning in the second leg of the bull market as bitcoin recovered sharply from its July low of around $28k.

“Purely from a TA basis, it looks like if $50 goes (it prob will), $58k will be on deck in no time. Then it’s a battle for new ATHs and potentially beyond,” said Travis Kling, who’s running Ikigai Fund.

The price appreciation, more importantly, has come during a period of the lowest spot volume in the last year, which has been due to seasonality. Kling added,

“The biggest risk to this scenario playing out is increased tapering fears. That was a much bigger concern pre-Jackson Hole. But Powell seems content to punt on tapering at least until YE. If we print strong jobs numbers in the coming months, there’s risk that timeline moves up.”

The price action turned positive as Bitcoin fund flows finally stabilized and even recorded inflows, though modest, for two consecutive days, according to ByteTree data. Transaction counts are picking up from low levels as well, up from 1.35 million in early July to now approaching 1.75 million.

Additionally, “miners inventories have now peaked, and they are selling again. This is normally bullish as it implies the market is strong enough to take the pressure,” noted Charlie Morris of ByteTree.

While Bitcoin (BTC) finally made a big move, Ethereum (ETH) has been leading the market this time around.

The second-largest cryptocurrency rallied high at nearly $3,845 late on Wednesday, a level last seen on May 16, just four days after hitting ATH at $4,380. Since July 20 low, Ether has soared 122% in value.

ETHBTC also surged to roughly 0.0785, not seen since May 19th, after breaking out of a multi-year long-term wedge.

All of this has been while ETH perpetual record low funding rates leading to optimism that this breakout can run even higher.

However, according to Loomdart, popular crypto trader, it might be time to deleverage here as “think a lot of catch up leverage stepped in yesterday to kinda hope other L1 strength can be matched, think we go higher eventually regardless, but yeah not bad place to tp,” he said.

Amidst the rising price and continued NFT mania, average gas fees on the network have risen past 136 Gwei, which is leading to more burns. 170,000 ETH worth $545 mln has been burned since EIP 1559 was implemented on August 5.

OpenSea’s contracts alone contributed to 30.67% of all ETH burned (~27k ETH), followed by Uniswap V2 and V3 contracts contributing 20.44%.

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This increasing amount of ETH getting burned has resulted in Ether’s annualized daily inflation falling to 1%, from ~3% before EIP-1559 activation. This week’s data revealed sub 1% inflation rates, hovering around 0.6% annual inflation, which is significant.

“Although it’s unlikely that this sustains until the PoS merge, EIP-1559’s impact on ETH’s inflation is the equivalent of two BTC halvings (using 3% as pre-London inflation),” noted Delphi Digital.

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Author: AnTy

JPMorgan Discloses Owning Coinbase (COIN) Shares Which Gets A New Target 61% Above Current Price

JPMorgan Discloses Owning Coinbase (COIN) Shares Which Gets A New Target 61% Above Current Price

Banking giant JPMorgan disclosed in a filing with the US Securities and Exchange Commission (SEC) that it owns 62,589 shares of Coinbase as of June 30.

As of writing, the shares of COIN are trading at $258.24, down from its all-time high of $429.54 hit briefly on its trading debut on Nasdaq in mid-April.

This week, John Todaro, vice president at Needham & Co., a cryptocurrency and blockchain research company, also started covering Coinbase, giving it a ‘Buy” rating with a target price of $420.

San Francisco-based Coinbase is a market-leading crypto exchange with “significant future opportunities beyond exchange service, which include staking, custody, yield-bearing products, and more,” Todaro wrote in a note.

According to the analyst, these services will further accelerate its position as a one-stop shop for crypto financial services while noting that concerns around their fees meanwhile are misplaced.

The research firm projects Coinbase, “the largest crypto exchange by trading volume,” to have a 467% increase in 2021 revenue but only a mere 9% in the next year.

“We view COIN as the leading, fiat-crypto on-ramp and expect the company’s exchange business to grow rapidly and sustainably as new investors adopt its crypto assets and services,” Todaro added.

Another Bank Joins In to Boost Crypto Adoption

In other news, another bank, Pennsylvania-based Customer Bank, which has $19.6 billion in assets, has joined the small list of FDIC-insured institutions in the US to offer crypto firms basic accounts.

The bank believes it is “well-positioned” to be the third banking option after Signature Bank and Silvergate Bank to offer a “strong offering” to the crypto asset space. Their main focus right now is to build a low-cost deposit franchise similar to these banks.

Moreover, about two dozen clients will begin testing the bank’s blockchain payments platform through Tassat next month before the service is offered for the rest of the crypto industry in October.

The Tassat Pay Network works much like JPMorgan’s JPM Coin, tokenizing the USD deposits and moving them between digital wallets on its platform.

“Customers continue to try to find ways to be involved, engaged, and interested in the cryptocurrency world,” said Sam Sidhu, Customers Bank’s vice chair and COO. “Some banks might offer rewards or custody services to consumers. We are focused on the businesses that may directly or indirectly service those customers.”

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Author: AnTy

Investment Giant With $79 Billion in AUM Discloses Owning 2.6 Million Shares of Coinbase (COIN)

Investment Giant With $79 Billion in AUM Discloses Owning 2.6 Million Shares of Coinbase (COIN)

Investment giant Tiger Global Management which has $79 billion assets under its management, continues to pile into the cryptocurrency industry through crypto exchange Coinbase.

Tiger Global was already invested in Coinbase as it led the exchange’s Series E equity round in which the company raised $300 million.

According to the latest regulatory filing with the US Securities and Exchange Commission (SEC), Tiger Global disclosed just over 2.6 million Class A shares, a $665 million worth stake in the leading crypto exchange of the US.

As of writing, Coinbase stock is trading at $256.83, down from last week’s high of $294. COIN shares still have a long way to reach its all-time high of $429, hit briefly on its debut day in April on Nasdaq through a direct listing.

Last week, US PC Chipmaking giant, Intel, revealed that it owns a small stake in the crypto exchange. Intel is holding 3,014 COIN shares worth just under $800k, less than 0.005% of Coinbase’s current market cap.

The top owner of COIN shares is Ark Investment which has a 3.96% stake in it, owning over $1 billion worth of shares, followed by Vanguard Group, Nikko Asset Management, Fidelity, Mitsubishi, and Goldman Sachs.

Coinbase is a pick-and-shovel play in the crypto asset class for traditional and institutional investors. Instead of directly investing in thousands of cryptos, investors are putting their money into the company that provides financial infrastructure and technology for the crypto economy.

Recently, the company reported a revenue of $2.23 billion for the second quarter, beating the analyst estimates, as its monthly transacting users grew 44% to 8.8 million users. Coinbase’s net profit exploded about 4,900% from the same period a year earlier to $1.6 billion.

While the company expects its trading volume to be lower in the Q3, analysts polled by Refinitiv expect a full-year EPS of $7.76 per share alongside revenue of $6.29 billion.

12 out of 18 analysts polled gave COIN stock a ‘buy’ rating with a consensus price target of $358.

Bank of America meanwhile gave the stock a rating of ‘neutral’ and a price target of $273, with BofA analyst Jason Kupferberg writing that while Coinbase is aiming to ‘become the Amazon of crypto assets,’ he is still waiting for more concrete signs of progress.

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Author: AnTy