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Coinbase Global Now Has Options Trading, Affirms Nasdaq

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Prominent cryptocurrency exchange, Coinbase, raised eyebrows when it announced that it was going public. The exchange ditched the IPO path and decided to Direct List the exchange under the ticker symbol, ‘COIN’. Nasdaq and Coinbase, both witnessed a massive plunge as the asset surged from $381 to $424. While this debut proved to be successful, the exchange has reportedly decided to roll out options trading on Nasdaq.

Reuters, in its latest report, revealed that Coinbase Global would enable COIN.O options further allowing its trading on Nasdaq.

Coinbase Expands Its Features On Nasdaq

Coinbase is touted as the largest crypto exchange in the United States. Despite its popularity, the exchange faced widespread criticism for its untimely downtime. Nonetheless, the exchange bounced back with its direct Nasdaq listing. Regardless of the fact that the first day appeared to be extremely beneficial for the exchange, users expressed concern about volatility. This did not stop the crypto platform from expanding.

Users will now be able to make a bet on the fortunes of the crypto platform with the latest equity options feature. Furthermore, it was revealed that the exchange would allow its users to trade options under, COIN,O starting from 20 April 2021.

Additionally, volatility seemed to be a grave problem for the exchange’s latest venture. The world’s largest cryptocurrency exchange, Binance was quick enough to announce the listing of the Coinbase Stock Token [COIN], however, the exchange went on to later assert that the listing would be postponed citing volatility concerns.

At the time of writing, COIN was trading for $333 and continued to emerge as a promising asset. The exchange decided to lure in several indiviuals with a Bitcoin giveaway. The exchange tweeted,

“To celebrate $COIN, we’re giving away $1.5M in bitcoin. Sign up for a new Coinbase account before April 22 for a chance to win. Contest rules and details are at https://bit.ly/2QwFGdm Void where prohibited. No purchase necessary. Restrictions apply.”

Binance Postpones Coinbase’s COIN Stock Token Listing Citing ‘Volatility’ Concerns

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Cryptocurrency exchange Binance has announced that it has postponed the listing of Coinbase Stock Token [COIN] due to market volatility issues. The official press release stated that investors will be notified once the COIN/BUSD pair is available for trading on the platform.

This came just hours after the exchange announced adding support for tokenized version of Coinbase stock for trading. This was the second stock token listing after TSLA which were zero-commission digital tokens that are fully backed by a depository portfolio of underlying securities representing the outstanding tokens.

Events that unfolded after the high-profile Coinbase’s debut on Nasdaq

The Coinbase listing occurred without the IPO route. The cryptocurrency exchange, instead, went ahead with the Direct Listing route under the ticker symbol ‘COIN’. 

COIN’s reference price was set at $250 by Nasdaq. However, the shares made a debut of more than 50% higher at $381 before making a climb to $424. It was no less than a landmark event for the cryptocurrency market with Coinbase’s valuation briefly rising to above whopping $112 billion.

Failing to retain this level following the excessive market frenzy, COIN dropped to $313 subsequently closing at $328.28 per share on Wednesday, with the valuation of the exchange at $85.8 billion on a fully diluted basis.

In the wee hours of 15th April, however, the shares of the platform rose to $361 in premarket trading. This could have been triggered due to the three funds at Cathie Wood’s Ark Investment Management buying the shares. According to reports, the flagship Ark Innovation ETF, Ark Fintech Innovation ETF as well as Ark Next Generation Internet ETF made a massive purchase of a combined 749,205 shares of Coinbase.

Despite the high-profile launch, concerns regarding volatility in the realm of digital assets and regulatory uncertainty continued to linger in the Brian Armstrong-led company’s share price. However, several experts weighed in that Coinbase’s growth has been quite impressive and despite its competitors creeping in closer, it still has an upper hand.

In the latest edition of CNBC’s “Squawk Box Europe”, Carol Alexander, a professor at the University of Sussex Business School, opined that risk management from a regulatory and the operational point of view is “much better on Coinbase” as opposed to its rivals.

Alexander also went on to add,

“They’ve got this solid revenue stream from the fees and the custodial services as well. There’s no real competitor to them on the centralized exchanges because Kraken, Gemini — I don’t think they’re the next ones to go.

Binance Adds Support For Coinbase Stock Token Hours Before NASDAQ Listing

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Coinbase’s IPO is a big moment for the entire cryptocurrency industry. Its decision to enter the market through a direct listing sparked enough curiosity and has generated high expectations.

Taking the opportunity, its counterpart, Binance has announced support for Coinbase Stock Token [COIN] on the 14th of April which will market the beginning of the COIN/BUSD trading pair. According to the official press release by Binance, the stock tokens are zero-commission digital tokens that are completely backed by a depository portfolio of underlying securities representing the outstanding tokens.

COIN holders would qualify for economic returns on the underlying shares, which includes dividends. This is the second such listing by Binance which had announced zero-commission, tradable stock tokens on the 13th of April starting with Tesla.

Coinbase happens to be one of the most valuable companies and the first-ever in the crypto industry to enter the US stock exchange.

Things To Expect After Coinbase Debut

The highly-anticipated development has triggered Bitcoin and the cryptocurrency industry to go for a record-breaking surge. The market expects to see dramatic, and potentially protracted, swings in the days to come as the space strives for mainstream adoption.

Coming back to Coinbase’s D-Day, Nasdaq had set a reference price for the firm at $250 per share.

If the shares in circulation, coupled with stock options and restricted shares, are taken into consideration, it can be found that the cryptocurrency exchange’s overall valuation will start a little above $65 billion. In addition, of the SF-based exchange hits the public market around its latest private market valuation of $100 billion, it would straight away be one of the 85 most valuable US companies.

It is safe to say that with a figure as huge as this, Coinbase not only has more users and revenues than many of the largest Wall Street biggies but also becomes the biggest US stock market entrant since ride-hailing business company Uber back in 2019.

Kraken’s Head of Growth Dan Held tweeted about about potential spillover effect into other crypto sectors following Coinbase’s big debut:

“Exchange valuations will likely be surging post-Coinbase IPO. That + general organic upswell of users could cause a spillover into other types of Crypto companies like wallets, custodians, etc.”

Coinbase Estimates $1.8B In First Quarter Revenue Ahead Of Equity Market Debut

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US cryptocurrency exchange, Coinbase revealed amassing a revenue of $1.8 billion in just the first quarter of 2021. According to the preliminary report, the platform estimated to report net income somewhere close to $730 million and $800 million on revenue of $1.8 billion in contrast to a dwarf of just $190.6 million revenue from the same time last year.

In fact, the first quarter financial have surpassed for all of 2020 when the company earned $322 million on revenue of $1.3 billion. In short, Coinbase did more revenue in the first quarter of this year than in all of 2020. With this, the latest revenue surged by more than nine-fold from a year earlier. This news comes a week prior to the cryptocurrency exchange’s public listing on the Nasdaq under the ticker COIN.

In the second quarter of 2021, Coinbase expects nearly $35 million of one-time expenses related to its direct listing. The company revealed that it intends to “augment” historically strong organic growth with customer acquisition and engagement by meaningfully increasing its investment in sales and marketing.

What drove Coinbase’s earnings and revenues?

Coinbase’s fortunes are tied closely to the swings of the crypto market and hence the meteoric rise of Bitcoin to $60,000 is what led the first-quarter revenue to climb to a record high. While the world’s largest crypto-asset was up by more than 700% over the past year, Ethereum raked in gains of more than 1000% around the same time frame.

This, in turn, catapulted the collective market cap to hit an astonishing $2 trillion and this amplification of the manic rally is what hellped the exchange to profit handsomely.

Coinbase also said,

“We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class”

According to reports, the company said that it has 56 million verified users which is 4x more than Robinhood. Meanwhile, the monthly active users on the platform has increased to over 6 million, thanks to the bull market. The figure surged from 1.3 million in the first quarter.

Bitcoin Usurps Charts To Become Best-Performing Asset In Last 10 Yrs

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Bitcoin [BTC] has created a niche for itself over the past. Exceeding the $1.3 trillion market cap has been another crucial milestone for the digital asset in the backdrop of massive institutional support.

Despite the fact that the crypto-asset underwent a correction from over $61,000 to a modest $57,680, in less than 24-hours, the technicals have never been more positive and have aided in triggering a buying season. On the derivatives side as well, trade volume in Bitcoin options was found to be surging steadily consistent with the trade volume on spot and derivatives exchanges.

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Bitcoin Vs Other Assets

With its monumental rise above $60K, Bitcoin has now usurped the charts to become the best-performing asset in the last decade. Since 2010, the crypto-asset registered an average annualized return of 230%. With this, it became the only asset in the charts to have noted triple-figure gains. The only other year Bitcoin did not experience at least a triple-figure gain was in 2019 where it recorded a surge of 95% over the year.

Notably, in the year 2013, it saw a massive 5507% increase.

The data was published by Charlie Bilello, Founder and CEO of Compound Capital Advisors in his latest tweet:

Bitcoin has defeated all the other asset classes by at least a factor of 10. In doing so, it surpassed the US Nasdaq 100 Index which recorded an average annualized return of just 20%.

Trailing far behind in the chart of the last decade were the shares in the US-headquartered companies with market caps more than $10 billion, i.e., US Large Caps has generated an average annualized return of 14%. US Small-Cap stocks followed suit with just a 12.9% annualized return for the past ten years.

Other asset classes projected single-digit returns over the same time period. The precious metal, Gold, for instance, stood at an average annual return of just 1.5% in the last decade as opposed to Bitcoin’s stunning three-digit gains. While Bitcoin’s price recorded 109% YTD gains, Gold stood in the red with a net loss of 9.5%.

Bitcoin: NASDAQ Listed-Firm Invest $250 Million in BTC as Part of “Strategic Allocation”

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Over the past few hours, Bitcoin’s valuation stumbled down to $11,300, as the support line at $11,500 was briefly breached. With the price recovering back up to $11,375 at press time, it is fair to say that the asset is struggling at the moment.

Keeping that in mind, major organizations were hardly getting deterred as some of them saw huge potential in Bitcoin from a long-term scenario.

According to a report by Fortune, MicroStrategy, a Virginia-based business intelligence software organization, they have accumulated a whopping 21,454 bitcoins worth nearly $ 250 million. The business firm worth more than $1.2 billion, also listed on NASDAQ, indicated that the digital asset offered a  “reasonable hedge against inflation” and that, it was a “capital allocation strategy“.

With the dollar economy substantially weakening in 2020 due to the apparent Pandemic and consistent quantitative easing measure, Michael J. Saylor, CEO of MicroStrategy, indicated that they were currently turning their heads towards digital assets. According to him, the company believed that such “alternative investments” allow MicroStrategy to protect that U.S dollar-dominated balance sheet. He added,

“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility and community ethos of bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value.”

The announcement inevitably gained attention from the Bitcoin community, and none other than Barry Silbert, CEO of Grayscale, responded on Twitter. Silbert conveyed,

Such mainstream investment by a publicly traded firm unheard of in the markets of Bitcoin. Organizations with such credibility usually inject capital into bonds or stocks as part of a capital hedge strategy, so taking the route to Bitcoin only strengthens the legitimacy of the digital asset.

 

Willy Woo suggested Bitcoin is in Major bull phase

Although some of the people were lamenting on the short-term decline of Bitcoin, Willy Woo, popular crypto analyst, and Bitcoin proponent suggested that the digital asset is currently entering a major bull phase.

He suggested that 93.5% of the total Bitcoin supply is currently in profit hence, even though the price under a state of correction, it is all part of the long-term picture.

Previously, Woo had explained that the Bitcoin bull/bear cycle is triggered by the reduction of sell pressure after every 4 years post-halving. Since the beginning, the rally has become more and more stretched out, as the selling pressure from each halvening cycle continues to drop. Therefore, Bitcoin’s current 4-year cycle of the rally may eventually transcend into a traditional rally that may last 10 years.

Bitcoin: Is it the best time to bet against Crypto with rising Stocks?

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After an agonizing period in the first half of 2020, the traditional asset class began to show a come back to the markets. Doubts over an imminent recession have begun to fade as Dow Jones and S&P 500 have registered consecutive gains over the last two weeks. After setting a new record of three straight positive weeks, NASDAQ also showed persistence in the market.

On the other hand, some investors were starting to lose the plot with bitcoin. Since the beginning of June, the largest digital asset has been stuck in the range of $8800 to $9500, and with traditional markets rising, traders have been looking at the option of shorting bitcoin.

The charts did not suggest a different scenario either.

BTC 1

The 1-day chart of Bitcoin epitomizes the concerns of traders as it pictured towards an unnerving bearish future. The formation of a descending triangle will not win any favors for Bitcoin from the investors, as a bearish dropped seemed increasingly likely towards the end of July. The support at $8879 has been held strongly over the past month and any breach below that level may wreak havoc for the asset.

In spite of such strong concerns, Jay Hao, CEO of OKEx Exchange believed that traders should have more faith in Bitcoin and not short on the asset over the near future.

Speaking about the current conundrum, Hao admitted that the downturn in Bitcoin spot and futures trading volume inclined towards the decision of shorting Bitcoin.

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However, he revealed that in spite of low trading volume, Bitcoin OTC trading has been consistent. He said,

“Data from Coin.dance shows that volume on the two major OTC trading platforms, Paxful and Localbitcoins, has not decreased significantly. Even on Paxful, due to the impact of the epidemic and the fluctuation of the fiat currency Exrates, the OTC trading volume has increased significantly.”

Hao added that example of other factors as well, which include steady Bitcoin transaction count during the downturn over the past couple of months.

So Is it the right time to short Bitcoin?

Rise in the stock market will definitely take capital away from crypto investments as investors would like to opt for a more stable investment vehicle. However, it is important to understand that the recovery period will be registered by Bitcoin as well, sooner or later.

Now, keeping patience with Bitcoin may be tough when the traditional market is performing better, but it’s important to understand that a shift in momentum can surface at any time. Hence,   the shorting of Bitcoin may not be the best step forward at this time, since the digital asset does not show signs of extreme adversity at all; at least not yet.

Bitcoin’s Price Crash Can Be Attributed To Institutional Investors, Claims Report

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Bitcoin’s price movement has been the town’s talk for the past few weeks, especially after its value had dropped by more than 35%. While most of the industry was trying to stay afloat during the Coronavirus pandemic, some new information has come to light about the recent Bitcoin price crash.

According to a report published by Chainalysis, institutional and professional investors were the main reasons for the Bitcoin price crash. This was different from the belief that retail investors were to blame for the market dip. 

Bitcoin price crash by almost 40 percent over the past two weeks and the dip had resulted in an investor rout. For an industry that has been anticipating the arrival of institutional money, the overturn in the capital was an unexpected twist.

Chainalysis found out that the bitcoin transfers between 10 BTC and 1,000 BTC constituted almost 70 percent of all transactions to crypto exchanges.

During the trading time between March 12 and March 13, cryptocurrency exchanges saw an unprecedented rise in trading volume. During a typical trading day in March, exchanges witnessed trades of around 319,000 BTC but that multiplied by 9x on March 13.

Experts claimed that the sell-off was because of the worldwide Coronavirus scare. According to the report:

“These trends suggest that the deeper pocketed professional traders and investors were driving the market, but they were joined, both on the selling and the buying, by a large number of retail holders.”

During the aforementioned date, almost 10 percent of all Bitcoin transfers were over 10,000 BTC. Bitcoin crashed along with its counterparts such as the Nasdaq and the S&P 500. The mainstream stocks and crude oil had sunk to 25 year lows and investors were in deep despair.

Bitcoin price crash came as a surprise to many because it went against the concept of a ‘safe haven’ asset.

At the time of writing, Bitcoin was trading for $5,980.82 with a total market cap of  $109.31billion. A surprising 13.11 percent increase in its price had also lifted the 24-hour market volume to $50.47 billion.

Pandemonium Occurs as Cryptocurrency, S&P and Dow Crash

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World markets have recently plunged, with all stocks ranging from the cryptocurrency market to the NASDAQ / S&P market hit by the Coronavirus scare. This had a ripple effect across different industries, with investors having to watch their assets dissolve in front of their eyes.

Stocks crashed mainly due to the decision of the United States to ban travelers from Europe for a period of 30 days. The government has taken the move to contain the spread of Coronavirus from hotspots in Europe.

The MSCI global gauge of stocks posted its largest daily percentage drop on record along with its European counterparts. The DJI, Wall Street’s Dow industrial index fell by the biggest margin since the Black Monday crash of October 1987. This financial atmosphere has been so bearish that several world governments decided to increase liquidity into their systems.

The New York Federal Reserve pumped more liquidity to banks so that they could reverse a few losses. Increasing repo rates have been a sign of market dips, and investors have been careful to look out for them. However, the dollar surprised everyone by rising against other national currencies.

At the same time, oil fell further to close a week of losses. ‘Liquid gold’ has fallen more than than the past two decades with no signs of stopping.

Markets took a turn when Donald Trump imposed travel restrictions on people coming in from Europe. The impact was so massive that trading was halted or 15 minutes shortly after it opened in the NYSE.

The S&P 500 fell by 7 percent with the day closing at a 9.5 percent fall. Zhiwei Ren, the managing director at Penn Mutual Asset Management claimed that the threat of recession was imminent.

John McClain, a portfolio manager at Diamond Hill Capital in Columbus, Ohio stated:

“Fear of the unknown is gripping markets and it’s more impactful in the credit markets at the moment; liquidity has effectively evaporated. People are looking ahead and saying ‘What’s this world going to feel like when we’re all working at home?”

The ECB has dropped capital requirements to allow the banks in the eurozone to cope with Coronavirus. This move did not last long as the ECB held interest rates on hold, which disappointed the markets.

The cryptocurrency market suffered the most with Bitcoin freefalling more than 35 percent in the last 24-hours. At the time of writing, Bitcoin was trading for $5816 with a total market cap of $106.264 billion. This was after a 3.8 percent increase in price which brought the $73.789 billion. Bitcoin’s performance has also elevated the value of other altcoins such as Ethereum and XRP on the charts.

Stock Markets Recover as Bitcoin Fails to Hold on to $8k

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Market movements across the board have been bearish, and many investors have panicked because of volatile price shifts. The United States has seen a marked shift in federal movements, and the promise of a government bailout across companies has led nowhere.

The last day saw a massive sell-off after the dip in prices sent investors to nearby exchanges scurrying. All the domestic indices rose which was a bear crash relief.

Bitcoin, the world’s largest cryptocurrency has been on a reverse trend by going down on the value chart. The turbulent movement in the S&P market was meek in comparison to the fall in the digital asset world. At the time of writing, Bitcoin was trading for $7,670.90  with a total market cap of $140,117 billion. The double-digit fall also caused the 24 market volume to drop to $39.37 billion.

On March 10, the Dow Jones Industrial Average rose 1167.1 points. This 4.89 percent growth was reflective on the S&P 500 as well. The latter jumped by 4.94 percent or 135.7 points on the charts. The Nasdaq Composite also rose by 3.936 percent, a 4.95 point pick-up. The biggest losers were the SaaS and cloud stocks.

SaaS stocks rose by 3.1 percent, which meant that the stock was one of the biggest losers as well as the smallest gainers on the charts. Experts believed that software companies were being repriced in the public market because of a lower premium rate compared to other companies. The biggest surprise factor was the fact that the bear market had lowered Bitcoin’s yearly gain to 9 percent.

According to analysis, Bitcoin’s short term resistance was clocked at $8460 while a shift towards the $7734 mark would result in more sellers. At the moment, Bitcoin’s temporary seller exhaustion point was at $8158 while the maximum bounce was found out to be $8460.

The current 9 percent gain was in stark contrast to the 45 percent increase that Bitcoin recorded in February. This was only possible due to Bitcoin crossing the $10,000 mark.

Although Wall Street had gained in the short term, the S&P 500 was still at a nine-month low of $2739. This was a 10 percent decrease in the year to date spectrum. Ashish Singhal, the Chief Executive Officer [CEO] of CoinSwitch had stated:

“A general sense of uncertainty seems to be the driving factor of investment decisions made by retail investors across different investment types, including bitcoin.”

Despite the price crashes, cryptocurrency proponents all across the world we’re confident that Bitcoin would recover from its current predicament. Nischal Shetty, the CEO of WazirX placed his bets on the upcoming Bitcoin halving for this price surge. He believed that the halving combined with the increased adoption across the globe will contribute to a price resurgence.