Coinbase Pre-IPO Contracts Now Trading on FTX, Price Surged 145% Within an Hour

Coinbase Pre-IPO Contracts Now Trading on FTX, Price Surged 145% Within an Hour

CBSE contracts recorded US$2.25 million in trading volume on its debut day, and its price went as high as $296.

Crypto derivatives platform FTX has now listed Coinbase’s pre-IPO contract with ticker CBSE.

Unlike tokenized stocks but much like Airbnb’s Pre-IPO contracts, they track the market cap of Coinbase. These contracts are tradeable with up to 5x leverage.

CBSE balances will be converted into the equivalent amount of Coinbase Fractional Stock tokens at the end of Coinbase’s first public trading day on June 1, 2022. If Coinbase does not publicly list by then, CBSE balances will cash-expire to US$32, which is in line with Coinbase’s $8 billion valuation.

The contract started trading at around $120 today and went just above $296 in less than an hour. Ever since this significant uptick within the trading’s early hours, the contract’s price has been trading around $240.

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At one point, Coinbase Pre-IPO contracts were traded at an implied $70 billion market price, which made the San Francisco-based cryptocurrency exchange’s worth at 20% of BTC, 100% of ETH, and 300% of total DeFi market cap.

The contract tracks Coinbase’s market cap divided by 250,000,000. These contracts have garnered tremendous attention, as evident from about US$2.25 million trading volume.

These Coinbase pre-IPO contracts are recording more volume than SRM/USD and much higher than ABNB’s under $2,500 on the exchange.

“This IPO will capture investors’ imagination of what is possible in crypto the same way Google did it for the Internet,” noted Santiago R Santos of investment firm ParaFi Capital.

Coinbase announced its plans of going public just before the weekend, for which the largest US crypto exchange has hired Goldman Sachs Group.

Founded in 2012, Coinbase has more than 35 million users all over the world.

It confidentially applied with the US SEC on Thursday to go public, a move that would make it the first significant crypto company to be listed on the stock market. Crypto data provider Messari valued the exchange at $28 billion following this news.

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Author: AnTy

Gemini Increases Fiat Currency Options with CAD, HKD and AUD Support

Gemini crypto exchange has added support for three fiat currencies within its trading platform, according to an official announcement by the firm on August 17.

The Winklevoss brothers’ led digital asset trading platform will now feature the Canadian dollar (CAD), the Australian Dollar (AUD), and the Hong Kong dollar (HKD).

This milestone comes as a significant boost to Gemini, which has been looking to scale its operations globally. The firm has signaled a possible debut in the Asia Pacific region after it recently hired a managing director for this jurisdiction. Gemini further revealed that it is considering the application of a Singapore regulatory license.

With these newly included fiat currencies, the ambition of operating on a global scale are now a possibility for the Gemini crypto exchange. Initially, users could only top up their accounts based on the U.S dollar, a feature that left out a good number of prospects in other markets. The exchange has since highlighted that its users will derive the same utility from newly added fiat currencies.

Its clients in Australia, Canada, and Hong Kong can now top up their accounts and buy/sell crypto based on their native currencies. Gemini, however, noted that these newly featured fiat currencies are yet to be offered on the exchange’s Active Trader Platform but will be made available soon, given it is part of the product roadmap.

This latest expansion by Gemini is among the exchange’s 2020 highlights, with a notable mention being its recent partnership with Samsung. The two firms are now working together towards enabling Samsung Blockchain wallet users to leverage Gemini’s mobile application in crypto trading.

Other than that, the exchange has listed several cryptocurrencies, including Brave’s native token ‘BAT,’ DAI, LINK, and OXT. In terms of its expansion strategy, the exchange appears to be optimistic on the European market and has hired a former Sterling Bank Exec to make inroads in this market.

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Author: Edwin Munyui

Crypto Market Bounces Back by 44.5% in Q2 As BTC Gains 78% Since Black Thursday: CoinGecko

The market cap of cryptocurrencies has grown by 44.5% within Q2, according to the first quarterly report by CoinGecko.

In addition to this, Bitcoin’s price gained over 78%, making a comeback from the March bloodbath of Black Thursday. However, the activity in spot trading has gone down by 55%, contrary to expectations.

“Bitcoin’s average monthly price is now up 78% from the March bottom. It took roughly 48 days for the markets to recover from the vertical drop of the Black Thursday, the day when Bitcoin fell vertically by 35% (over USD 3000) in 24 hours.”

The report, published on July 3, marks the first in a series of three scheduled releases. As the world emerges from lockdowns, markets surged throughout Q2. Going by the stats, the trend appears to have been replicated in crypto markets hence debunking the notion that crypto markets are not correlated to traditional asset prices.

Crypto Market Bounceback

Though highly volatile, the digital asset ecosystem may have passed a resilience test, given the economic effects of COVID-19. The crypto market bounced back from the March lows and now seems to have consolidated in what most stakeholders consider a stable position.

Currently, the total market cap of crypto stands at $268 billion, with Bitcoin dominating this portfolio at 63%.

Looking back at the onset of Q2, things were more uncertain, although crypto maximalists have always been optimistic about mainstream adoption, especially with COVID-19 now at our doorsteps. Well, an increase of 44.5% could probably mean that some of the underlying factors have triggered a shift to crypto assets.

Nonetheless, trading activity has been down as crypto hotheads shift focus to DeFi. CoinGecko also noted that the reduced spot trading is likely attributable to more people HODLing and diminished market confidence after Black Thursday. The report reads:

“This may also simply be a result of investors HODL-ing, having no confidence to trade, or perhaps a market shift towards DeFi and Derivatives trading.”

The shift in liquidity towards DeFi networks has significantly boosted ETH, as it topped gains compared to BTC and Tether. The DeFi market is on its way to hitting $2 billion in total locked value, making the ETH prospects even better. While this is the case, the USDT is the most popular trading pair in both spot and derivative markets. A sign that stablecoins have also found a niche in this volatile ecosystem.

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Author: Edwin Munyui

Stellar Community to Vote on ‘Protocol 13’ Update; Will Equip Exchanges with ‘Fine-Grained Control’

Stellar’s community is preparing for a vote that will enable crypto exchanges within its ecosystem to exercise more regulatory oversight. Dubbed ‘Protocol 13′, the new set of updates includes other modifications as well meant to improve the Stellar user experience. Notably, this vote is expected to take place later in the week.

In this new update, a ‘fine-grained control’ approach will be enabled such that exchanges will have control over specific digital asset activity. This means that a service provider in this line can authorize for independent action on every digital currency transaction as opposed to the existing version, which affects even legitimate orders. An earlier post from the Stellar Development Foundation (SDF), had alluded that,

“Often, issuers of regulated assets want customers to be able to trade their assets, but they also need to exert a high level of control over who can hold them, how much they can hold and under what conditions they can sell or buy more,”

Stellar’s Proposed Protocol 13

Should the community vote to pass this initiative, onboarding securities in blockchain and crypto ecosystems might become much more accessible. Usually, the headache comes in regulation given the stringent oversight requirements by financial watchdogs like the SEC. However, Stellar’s Protocol 13 now proposes a solution for this quagmire based on the ‘red flags’ that allow one to “revoke authorization while maintaining orders on the books.”

Interestingly, this protocol will also provide the flexibility of altering regulations over time based on industry developments such that a counterparty can view the status,

“With fine-grained asset control, an issuer of a regulated asset can set the asset to require the new kind of authorization … and when a user wants to make a payment or new offer, the issuer can check to see if it’s allowed given regulation.”

It is quite noteworthy that Stellar had already integrated block functions for exchanges to deny services to investors in sanctioned countries such as North Korea and Iran. Also, market manipulation through large stock purchases is currently limited by a 5% cap unless one fills Schedule 13(D) disclosure with the SEC.

Other Updates

Apart from the authorization update, the soon to be voted protocol 13 includes a fee bump function. This feature is meant to assist transacting parties in the quick recovery of their user fees and bump up the cost on low-value payments for settlement during high network frequency. Another feature is a ‘multiplexed’ account to enable the separation of balances held by different sub-accounts under a custodial service provider.

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Author: Edwin Munyui

DeFi Total Locked Value Doubles Since the March Market Crash, Now Over $1.01 Billion TVL

The DeFi market cap has doubled within a span of two months according to analytics firms’, DeFi Pulse, and DeFiMarketCap.

However, the two entities differ in the analytics that they provide. DeFi Pulse focuses on the exact total value locked (TVL) within this upcoming market. While DeFiMarketCap tracks the value of tokens within the DeFi space. According to the former, the value stands at $1 billion while the latter shows a $2.288 billion valuation as of press time.

The market had been thriving, hitting the $1 billion mark in February as per DeFi Pulse stats. These gains were wiped out a month later on Black Thursday as the crypto market dipped together with international global commodity prices. At the time, TVL went to a low of $559 million but has since recovered based on the prevailing stats.

DeFi Pulse
Source: DeFi Pulse

The DeFi Market Bounce Back

DeFiMarketCap which was launched in April to compete with the likes of DeFi Pulse and CoinMarketcap shows that the TVL in Decentralized Finance crossed the $2 billion mark over the weekend.

The platform reveals that Maker protocol currently dominates the DeFi market with around $568 million; roughly a quarter of the total market capitalization. It is followed by Ox and Kyber Network Crystal which are both ERC-20 compliant.

On the other hand, DeFi Pulse shows a bounce back to the $1 billion mark on June 8; a level which was last surpassed at the beginning of March. While both platforms agree to a spike by almost double, the approach in TVL measures may have caused the difference in values. DeFi Pulse tracks the TVL of digital assets like ETH and DAI which are used in liquidity creation and staking. Its newly established counterpart, however, tracks the total value of all tokens attributed to certain protocols such as Maker.

Fundamental Value Drivers

The DeFi market return to its attractive TVL can be pegged to a number of fundamental factors. One of the leading narratives is a general reversal of the downtrend experienced by global markets at the height of the COVID-19 pandemic.

The crypto market seems to have replicated performance, a development that has left some questioning the value of digital assets in violating ‘market norms’.

The recent addition of wBTC as collateral for minting DAI stablecoins within Maker’s protocol has also spurred DeFi activity.

This Bitcoin-based digital asset was added as recently as May and is already the second most popular within MakerDAO’s staking portfolio. Its value proposition lies in tapping Bitcoin’s liquidity into an ETH dominated ecosystem. Given these developments, investor confidence in the DeFi markets has significantly grown despite global uncertainty in financial markets.

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Author: Edwin Munyui

Solana Blockchain Adds First Stablecoin Terra to Expand Into The DeFi Space

Solana blockchain and Terra are collaborating to integrate the first stablecoin within Solana’s recently launched mainnet. The US blockchain platform aims to operate at ‘web scale’ while Terra which traces its origin to South Korea is backed by e-commerce giant, TMON. This partnership was announced on April 15 and is expected to improve the fundamentals of both projects.

Though still a young network, Solana has claimed its security, scaling and decentralization features are among the leading in today’s blockchain market. Notably, this initiative went live as late as 2019 after a Multicoin Capital led series A funding. They also winded up a token auction on CoinList this March and consequently got listed on Binance. The firm has since touted its value proposition in handling more than 65,000 transactions per second.

With Terra in the picture, Solana can further expand its smart contract ecosystem as more stakeholders opt for stable payments in a highly volatile market. Raj Gokal, the COO of Solana, echoed these sentiments,

“By bringing stablecoins onto our network, we aim to dramatically expand the design space for developers, opening the door to novel applications that require price-stable payments.”

On the other hand, Terra is set to leverage Solana’s efficiency to further spur its adoption. The project raised a significant $32 million back in 2018 in a funding round led by Binance. Currently, the platform’s payment app dubbed ‘CHAI’ facilitates $3 million in daily transaction volumes while its active users are over 1 million. Terra’s competitive edge is particularly on transaction fees where its 0.5% is much favorable compared to an average 3.5% on normal cards.

Given the new alliance with Solana, the two are set to be integrated through a low latency bridge which will balance token transfers through the ability to mint and burn on either network. Terra’s team has highlighted this will be a major stepping stone to its expansion goals,

“As we continue to grow, we expect demand to expand into new regions and new blockchain ecosystems beyond our own.

Anticipating this, we recognize the priority of building bridges and relationships to grow the reach of Terra’s stablecoins within the Solana ecosystem.”

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Author: Edwin Munyui

Tether (USDT) Stablecoin Rolls Out on the Bitcoin Cash Blockchain Network via SLP

Quick Read:

  • Tether (USDT), the leading stablecoin within crypto markets, is now available on the Bitcoin Cash Network.
  • This USD backed digital currency scaled to BCH as the more crypto users opt for stability amid uncertainty in oil markets and Coronavirus (COVID-19).

The demand for stablecoins has been on an uptrend in the past week surging Tether’s market cap to over $5.7 billion. As it stands, more than $480 million have been minted within the past weeks. These figures may continue rising especially with the move to leverage BCH’s Simple Ledger Protocol (SLP). The SLP is basically Bitcoin Cash generic token and fuels this network just like ERC-20 tokens do within Ethereum’s ecosystem.

Prior to the BCH launch, Tether (USDT) was already available on Tron, Omni, Liquid Network, EOS, Algorand, and Ethereum. This stablecoin began its journey on the Omni layer protocol but later shifted most operations to Ethereum’s network. However, some shortcomings like scaling options forced Tether to leverage more platforms as the market grows.

The BCH network is known for its lower fees and larger blocks compared to Bitcoin. Therefore, Tether is optimistic that leveraging this capacity will improve the stablecoin’s efficiency and value. The company’s CTO, Paolo Ardoino, highlighted that;

“A key strength of Tether is that it is underpinned by a rich diversity of different blockchains. Our latest collaboration with Bitcoin Cash will provide Tether with a variety of benefits.

We expect the adoption after launch to be pretty easy for any integrator. The launch will also support more applications on the Bitcoin Cash chain, with Tether facilitating payment for these applications.”

Given this development, Bitcoin Cash users will be more exposed to USDT via the network’s app. This platform was upgraded recently to allow participants access to the SLP native token. Bitcoin Cash Chair, Roger Ver, noted that it is exciting that the world’s largest stablecoin will start using BCH blockchain including Bitcoin.com wallets.

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Author: Edwin Munyui

Bitcoin Miners Now Unprofitable But An Unbroken S2F Model Says Weak Hands Shaken Out

  • Despite the crash, bitcoin stayed well within the S2F model bands
  • Bitcoin Electricity Cost at the point where miners start to turn off rigs
  • But as miners drop out, the hash rate will go down, the difficulty will adjust, new miners will enter, and new blocks will keep on being produced uninterrupted

Bitcoin price is currently in the red, down 1.04% in the past 24 hours while hovering around $5,300 while the volume remains near $2 billion on top ten exchanges with real volume. Altcoins are yet again following Bitcoin’s lead and seeing a jump much higher than the leading crypto asset.

Coin360
Source: Coin360

Bitcoin price might be feeling the green but over 50% drop in the digital asset’s price in two days left the miners “unprofitable.”

“Bitcoin miners now unprofitable. Bitcoin Electricity Cost tested, this is the point where miners start to turn off rigs, b/c the electricity bill is more than 1BTC,” said analyst Charles Edwards.

The production and electrical Cost of bitcoin is a historic floor in its price, explains Edwards and the production cost of mining one bitcoin is currently around $7,900 while electricity cost is $4,745.

Bitcoin will continue to produce blocks uninterrupted

Bitcoin miners might start to turn off their rigs but these conditions don’t last long. With bitcoin holding above $5,000, we would start to see the hash rate drop.

The hash rate of the bitcoin network that reached its all-time high on March 1st at just above 136 Th/s is currently down at 102.8 Th/s but it isn’t anything out of the ordinary yet. These kinds of ups and downs are part of the processing power of the network. With the hash rate and difficulty dropping, the network will continue to generate blocks as usual.

If the current bearish situation of the bitcoin continues into the halving in May 2020, “Some miners will drop out. The hashrate goes down. The difficulty adjusts, making it easier for new miners to enter the market. Bitcoin continues producing blocks uninterrupted,” explained analyst Mati Greenspan.

But does it mean bitcoin price could go lower? Absolutely. Despite losing over 50% of its value in two days and historically the current level is seen as “strong support,” bitcoin could very well go lower “as sustained time here will lead to decreased Hash Rates and likely further price drops. I would not be surprised to see lower prices in coming weeks,” said Edwards.

Good thing, weak hands are shaken out

Scheduled for March 11, 2020, the third block reward halving will cut down the reward from 12.5 bitcoin to 6.25 coins. Just less than two months away in the backdrop of a bleak macro view, price around $5,000, and supply shock incoming, things could get really ugly for miners.

“Overleveraged miners are going to be unbelievably fucked come halving” with “BTC collateral that needs to be liquidated, to the tune of hundreds of millions USD,” said bitcoin whale Joe007.

As we previously reported, this combined with the possibility of a recession means “big miner stress”.

The good thing is despite the crash in bitcoin price, the Stock-to-flow model remains intact with analyst PlanB stating, “Some people think S2F model broke yesterday. Of course it did not. Bitcoin oscillated nicely around model value and stayed well within model bands. The extreme volatility within the model bands shakes out the weak hands. No extreme returns without extreme risk (volatility).”

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Author: AnTy

NYFDS Gives Crypto Firms 30 Days to Submit A Coronavirus (COVID-19) Contingency Plan

New York’s Financial regulator, NYFDS, has given crypto firms registered within this state one month to have submitted a preparedness plan for the COVID-19 pandemic.

The watchdog sent out letters to crypto entities it regulates which was followed by a state of emergency declaration by New York’s Mayor, Bill De Blasio.

These firms are required to outline how they plan to tackle short term and long-term operational risks amongst others as the world’s economy dips due to Coronavirus (COVID-19).

The letter sent out to over 15 firms regulated by the NYFDS partly reads;

“COVID-19 has already had adverse economic effects domestically and globally. It is critical that each regulated entity establish plans to address how it will manage the effects of the outbreak and assess disruptions and other risks to its services and operations.”

Markets across the world have been red with crypto also falling victim. These highly volatile assets lost over 30% this week despite stakeholders having faith that they would be a great alternative for value realization during black swan events. The NYFDS concern with players in this field is, therefore, no surprise given the industry’s brief history.

The NYFDS Risk Mitigation Proposal Outline

Crypto firms targeted by the NYFDS are required to highlight a minimum of 9 areas that pose an operational risk to their businesses. In addition, they should have 3 separate plans to tackle the identified shortcomings.

Basically, the operational outlook will cover company specifics that are exposed including probable solutions that can be implemented in a scalable manner. The NYDFS took this approach as it yet to quantify how much financial damage Coronavirus (COVID-19) has done and will do in the coming days.

This development means the likes of Ripple, BitPay and Coinbase will have to analyze the options of working remotely. Furthermore, the regulator requires them to update health protection tactics to prevent their employees from COVID-19 exposure.

Apart from coming up with a contingency plan, crypto firms operating in New York have to regularly check whether their suggested strategy is effective. As of reporting date, the number of reported COVID-19 cases in New York is below 100 but the city’s mayor, Bill de Blasio, might spike to 1000 hence the state of emergency.

Coinbase Ahead in COVID-19 Prevention

This San Fransisco based crypto exchange appears to have already taken initiatives to prevent more risks than the markets are already experiencing. Coinbase rolled out its contingency plan last month and it comprises four tiers; 0-3. At the moment, only Japan is at tier 1 with all the other subsidiaries still at 0. Ideally, all employees will work remotely in case it reaches a point where all outlet locations are placed in tier 3; this will probably be at the extremes of COVID-19.

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Author: Edwin Munyui