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Tag Archive : #Coinbase

Coinbase pausing creator Drops on its NFT marketplace

  • The exchange however maintained that it is not planning to close its NFT marketplace.
  • It wants to align the exchange’s resources in developing other features.
  • Coinbase has been struggling with revenue generation.

Cryptocurrency exchange Coinbase on Wednesday tweeted that it was pausing creator drops in its NFT Marketplace. The exchange however assured clients that the move is not an overture to the closure of the NFT marketplace.

Coinbase explained that it was doing so to free up resources so that it could focus on other tools and features that creators have requested.

Coinbase has been facing a lot of challenges lately. It cut its workforce by 25% and closed its operations in Japan. It also recently got fined in the Netherlands for operating there without a licence.

Jessica Yatronofsky NFT collection

Coinbase announcement came shortly after one of its NFT partners, Jessica Yatronofsky, announced that her NFT collection would no longer be available on the Coinbase NFT Marketplace. Yatronofsky claimed that she had information that the marketplace would cease to operate as of February; something that is most likely the reason for Coinbase to reiterate it was not closing the Marketplace.

According to Coinbase, the changes will help the development team behind the Coinbase NFT to focus more on improving the platform. A representative from the exchange said that the team will now be able to focus on creating long-lasting solutions to serve its community.

In another tweet, Coinbase said:

“Rest assured, our mission for Coinbase NFT hasn’t changed and we remain optimistic about our future as we continue building. We’re excited to find more opportunities to work with creators in the future.”

Coinbase COIN share price

While there is no concrete reason that has been given by Coinbase for pausing the NFT drops, Coinbase share price has been rising over the last few days.

Yesterday COIN closed the market at $65.70, up +7.22 (12.35%). the stock has gained +9.64 (17.20%) in the past five days.

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Coinbase Wallet enhances Web3 user safety with new features

  • Coinbse Wallet has introduced transaction previews and token approval alerts to help users protect against scams.
  • The wallet is also enhancing token approval alerts and has added Ledger hardware wallet compatibility.
  • The goal is to protect Web3 users against NFT scams and help users protect their crypto assets.

Coinbase Wallet, the non-custodial, standalone wallet provided by major crypto exchange Coinbase, has announced a series of new safety features aimed at making Web3 safer for users.

On Monday, the wallet announced that its suite of security features will offer users more clarity and better guardrails as they explore the exciting new world of Web3.

Coinbase Wallet introduces transaction previews

Part of Coinbase Wallet’s quest is to bring more clarity to users in relation to dApps and smart contracts use.  Now the wallet supports transaction previews, which work by showing a user an estimate of their wallet balances before they “confirm” transactions.

This will happen every time customers handle swaps, mint NFTs, and generally transact in Web3, the wallet wrote.

There is also token approval alerts, ability to revoke connections to dApps directly from within the wallet app and multi-chain addresses. The multiple address feature allows users to easily separate assets and NFTs, with each address customizable for labels and different security settings.

Apart from that, Coinbase Wallet now supports expanded compatibility for hardware wallets. Specifically, Coinbase now offers compatibity with Ledger hardware wallets (e.g Nano S), bringing more security to users.

The move comes a few days after Moonbirds founder Kevin Rose lost $1.1 million worth of NFTs in a phishing scam. As we reported over the weeked, the Twitter account of NFT collection Azuki was also compromised, with hackers tricking users to click on a malicious link that saw several wallets drained.

While 2023 has not recorded any major losses resulting from security breaches so far, NFT scams and crypto hacks remain one of the big problems of the cryptocurrency industry. Protecting against these as they explore Web3 is critical for users.

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Crypto needs more public companies – collapse of Circle IPO indicative of industry troubles

Key Takeaways

  • Circle issues the USDC stablecoin, the world’s fifth largest cryptocurrency with a market cap of $44 billion
  • Circle announced plans to go public in July 2021 at $4.5 billion valuation
  • This valuation doubled to $9 billion last February, but deal was cancelled in December
  • Crypto needs more public companies to establish legitimacy, our analyst Dan Ashmore declares 
  • Circle claims it remains intent to go public in long-term, but Ashmore writes that this depends on certain variables

Things were rosy in the world of cryptocurrency back in 2021. 

An exchange by the name of Coinbase went public in April at a valuation of $86 billion. It was the first major crypto company to go public. It was immediately declared a financial giant on Wall Street, its market cap bigger than the stock exchanges it was traded on. Nasdaq’s market cap was $26 billion, while ICE (parent company of the NYSE) was valued at $67 billion. 

It was against this backdrop that Circle, the issuer of USD Coin, the world’s fifth-largest cryptocurrency and second-largest stablecoin, announced plans of its own to float publicly. Valued at $4.5 billion, it was slated to trade on the New York Stock Exchange under the ticker CRCL by the end of the year. 

Circle then began wrestling market share through its USD Coin from rival Tether, and crypto prices kept soared. By February 2021, its valuation doubled to $9 billion. And then everything changed. 

Bear market ends hopes of going public 

As the world transitioned to a tight monetary environment, with rates rising in response to the inflation crisis, the price of risk assets cratered. Crypto was the worst hit, with the market absolutely ravaged. 

This scuppered Circle’s plans to go public, with the company eventually cancelling them in December. A good way to assess how poor the timing would have been, had Circle gone public, is to look at the share price of Coinbase (I wrote a deep dive on Coinbase’s plight here). 

Even after a 45% to start the new year, the market cap still sits at $13 billion, down 85% from its $86 billion valuation when it went public. With this in mind, it’s not difficult to see why Circle elected to let the deal fizzle out. 

Crypto needs public companies

The big loser in all this is crypto. I have written plenty about what I believe is the biggest problem to come out of the last year, and that is the hit to the reputation of the entire industry.

Not only that, but the continued lack of transparency surrounding so many centralised companies in the space is damaging. For too long, these companies have operated in the wild west world of zero regulation and free reign.

Binance presents as a good example. It published proof of reserves reports in the wake of the FTX meltdown, however Mazars, the auditing partner issuing the reserves, abruptly cancelled the relationship and abandoned providing such reports for all crypto companies. 

This came amid continued misunderstanding over what the reports signalled. Namely, these were declared audits by many in the crypto industry, yet in truth were nothing even close. There was no mention of liabilities, nor anywhere near sufficient detail to give any sort of confidence to investors. 

The downfall of so many of these centralised players – Genesis, Celsius, Three Arrows Capital, Voyager Digital, BlockFi, FTX, just to name a few – has hurt the entire industry immeasurably. 

An increased number of public companies would help to counteract the reputational blow that crypto has taken. As poorly as Coinbase has performed for investors, its presence on the stock market does lend an air of legitimacy to an industry which is so badly in need of it. 

Circle claims it remains intent to go public, if the right moment presents itself in future. The entire crypto space should be hoping that proves true, as the industry continues to fight for legitimacy on the big stage.

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Coinbase fined €3.3M by the Dutch central bank

  • The Dutch central bank has fined the US-based crypto exchange on registration grounds.
  • Coinbase has a significant number of customers in the Netherlands.
  • Authorities claim the exchange was non-compliant between November 2020 and August 2022.

In a rare twist of events, popular US-based cryptocurrency exchange Coinbase has been fined $3.6 million (€3.3 million) by the Dutch central bank for non-compliance. The fine comes days after the exchange announced 20% layoffs and termination of operations in Japan due to negative market effects.

The Dutch central bank, De Nederlandsche Bank (DNB), stated that the crypto exchange was not compliant with local regulations for financial service providers in the Netherlands.

Fined for number of customers

According to De Nederlandsche Bank, Coinbase failed to acquire the necessary registration to offer crypto services in the Netherlands before it started operating in the country. The bank said that it considered the size of the exchange as a company and the “significant number of clients” it has in the Netherlands in coming to the decision.

Most specifically, the authorities claimed that the crypto exchange was not compliant during the time period between November 2020 and August 2022.

It is not clear whether Coinbase will go ahead to apply for registration immediately or it will take time going by the claims of having a huge following in the country already.

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Coinbase terminates Japan operations, why is share price still up 50% in two weeks?

Key Takeaways

  • Coinbase is halting all operations in Japan, citing “market conditions”
  • Last week it cut 20% of its workforce, having already cut 18% last June
  • Stock price is up nearly 50% on the year amid crypto rally, but is still 85% off its peak
  • Problems are aplenty at the company, while CEO Armstrong sold 2% of his stake in October

 

Coinbase has been in a world of pain recently.

Just last week, the exchange announced it was laying off 20% of its workforce, having already cut 18% last June. I wrote a piece analysing what this meant for the company, which was trading at a market cap below $10 billion, 90% down from the price at which it went public in April 2021.

This came after CEO Brian Armstrong unloaded 2% of his stake in the company in October, after which I wrote a deep dive analysing what it all meant for a company that has been viewed as the torch-bearer to carry crypto into mainstream circles once and for all following its high-profile floating on the Nasdaq.

But today, more bad news came. The exchange announced it is halting all operations in Japan, citing “market conditions”.

Coinbase stock price on the up

Despite the onslaught of bad news, Coinbase’s share price has been a big winner in the early weeks of 2023, up 48% in just 18 days.

This comes amid the biggest crypto rally in 9 months, which has seen prices surge across the board. While the bounceback in Coinbase’s share price is great news for investors, it also ironically sums up exactly what the problem is – Coinbase’s correlation to the crypto market.

There are few things more volatile than crypto, so it is not good news to be tied at the hip to its price action. But Coinbase’s performance is dependent on the crypto market because as the price falls, transaction volumes and interest in the industry, and by extension Coinbase, plummets.

During the pandemic, this was a great thing. The money printer was on maximum power, interest rates were low and retail investors were all aboard the FOMO train, armed with a healthy curiosity about crypto and a fat stimulus cheque.

But with the changing macro environment, the crypto industry has freefallen from $3 trillion to $800 billion, before this recent surge popped it back above $1 trillion.

Why are Japanese operations ceasing?

Despite the pleasant pump this past few weeks, zooming out tells you that Coinbase has shed 85% of its value since going public, gone through two rounds of layoffs, seen its CEO sell 2% of his stock in October and now is ceasing operations in Japan.

All Japanese Coinbase customers will have until February 16th to withdraw their holdings from the platform. If they fail to do so, the remaining assets will be converted to Japanese yen. Coinbase had worked hard during the previous crypto winter to expand into the Japanese market, so the abrupt departure is a shame.

But Coinbase is not the only exchange to make this move, with rival Kraken also announcing it was ceasing Japanese operations last month. Also like Coinbase, Kraken had cut a large chunk of its workforce, laying off 30% of employees after the FTX collapse shook the market. The plight of Coinbase’s extreme correlation with the crypto market is once facing exchanges across the industry.

Coinbase Q3 results revealed that transaction volume fell 44% from Q2. The fall in volume and interest ultimately is what has caused the plummeting share price, layoffs, and now ceasing of Japanese operations, with a glance at Google Trends all you need to see the scale of the dropoff in the public’s attention to the exchange.

For $COIN investors, they will hope that the last few weeks of softer macro data and a crypto bounceback are an omen of things to come, otherwise this share price rally will be short-lived.

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Coinbase halts operations in Japan, customers to withdraw assets

  • Coinbase has announced that it has stopped its operations in Japan.
  • The exchange has cited “market conditions” for the move.
  • Customers are advised to withdraw funds before the deadline

After announcing its plans to cut down operation costs by 25% last week, cryptocurrency exchange Coinbase has today announced that it has halted operations in Japan.

The exchange seems to be taking drastic measures to avoid going the way of the other crypto firms that have filed for bankruptcy due to liquidity issues. In today’s announcement, the exchange cited market conditions as the reason behind the halting of operations in the third-largest economy in the world.

The introduction of the announcement reads:

“Due to market conditions, our company has made the difficult decision to halt operations in Japan and to conduct a complete review of our business in the country. However, we are committed to making this transition as smooth as possible for our valued customers.”

Feb. 16 deadline to withdraw assets

Following the announcement, Coinbase will remove the fiat deposit functionality on January 20, 2023, after which Japanese customers will have until February 16, 2023, to withdraw their fiat and crypto assets from the exchange.

Customers will be allowed to withdraw their assets to the Coinbase wallet, any other self-custody wallet, or any other cryptocurrency service provider. They can also choose to liquidate their assets and withdraw in form of JPY, Japan’s national currency.

After the elapsing of the deadline, customers will have to coordinate with the Legal Affairs Bureau to get their balances.

The statement read:

“In the month following February 17th, Coinbase will send any remaining JPY to a Guaranty Account at the Legal Affairs Bureau in accordance with legal requirements. If customers do not take any action before February 16th, they will have to coordinate with the Legal Affairs Bureau to retrieve their JPY balance.”

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Coinbase lays off 950 employees, CEO says the exchange is well capitalized

  • The exchange wants to reduce operating costs by 25%.
  • It is the second crypto exchange after Huobi to confirm layoffs in 2023.
  • Coinbase CEO has however confirmed that the exchange is well capitalized.

The American-based cryptocurrency exchange, Coinbase has announced through its website that it is cutting down on its operating expenses by 25%. The move includes laying off 950 employees, which accounts for about 20% of the company’s workforce.

The exchange’s CEO, Brian Armstrong, has listed the ongoing bear crypto market and the broader macroeconomy as the main reasons to reduce the company’s expenses.

Hard times for the exchange

While announcing the laying off, the CEO also assured the public that the crypto exchange is well capitalized and added that crypto is not going anywhere.

Nevertheless, the CEO noted that while the exchange has gone through multiple crypto bear markets, the current bear market is proving to be a real struggle for Coinbase. He said that it is the first time a global economic meltdown has aligned with a bear crypto market. He said:

“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario. While it is always painful to part ways with our colleagues, there was no way to reduce our expenses significantly enough without considering changes to headcount.”

2023 has already seen several layoffs

Coinbase joins several other companies that started the year 2023 by announcing layoffs. Huobi exchange also recently confirmed 20% layoffs.

For example, Salesforce announced it is planning to reduce its workforce by 10%, which would translate to laying off about 8,000 people. Amazon also confirmed that it is carrying out its second round of layoffs that will see it lay off about 18,000 people from its workforce.

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What is happening at Coinbase? Another 20% of employees laid off

Key Takeaways

  • Coinbase has announced it is cutting 20% of its workforce, having cut 18% back in June
  • The company is trading at a market cap of below $10 billion, down over 90% from the price at which it went public at in April 2021
  • CEO Brian Armstrong had sold 2% of his stake last October when the stock traded at $63. Today, it is $38
  • Armstrong warned of “more shoes to drop” in the crypto market
  • Prices thus far this year have headed upward off optimism that inflation is softening

Un oh. Coinbase today announced that it is again cutting out a substantial period of its workforce. A blog post announced the cuts Tuesday morning, which comprise another 950 jobs. The company had previously laid off 18% of its workforce in June. This means that in the last six months, 35% of its employees have been made redundant.

With perfect hindsight, looking back, we should have done more. The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case” – CEO Brian Armstrong in an interview with CNBC.

Why are Coinbase enacting layoffs again?

I wrote a deep dive on the state of the exchange in October, after it was revealed that CEO Armstong was selling 2% of his stake. Coinbase was trading at $63 that day. Today, it is at $38. If you thought Bitcoin was bad, Coinbase has been worse. It is now down over 90% from the price it went public at.

Its market cap is currently below $10 billion, having briefly been worth $86 billion on its first day of trading.

Coinbase has said that the layoffs will reduce operating costs by 25%, when considered in conjunction with other restructuring. There will be an increase in operating expenses of between $149 million and $163 million for the first quarter as a result of the cuts, however.

“It became clear that we would need to reduce expenses to increase our chances of doing well in every scenario”, Armstrong added, before affirming that there was “no way” of doing this without laying employees off, and adding that several projects with a “lower probability of success” will be shut down.  

Could things get worse in crypto?

While crypto markets have got off to a hot start this year thanks to positive macro and inflation data, Armstrong ominously warned that there is “still a lot of market fear” in crypto following the FTX collapse, and that there are likely “more shoes to drop” when it comes to contagion spiralling through the industry.

Of course, layoffs have not been limited to the crypto market. Tech companies such as Amazon, Salesforce and Meta have cut thousands of employees over the past few months. Tech is notoriously volatile and with low profits the standard, with valuations derived from the discounting back of future promise, high-interest rates have punished the sector.

But Coinbase have made errors. An apparent lack of risk management with regard to the Bitcoin price, given how correlated the company’s fortunes are to the crypto market, has cost them. A quick glance at the above chart shows that the Bitcoin price and Coinbase stock very much move in tandem.

The original round of layoffs in June came only four months after the company spent $14 million on a Superbowl commercial, which in retrospect signalled the top of the crypto market quite poignantly. FTX and Crypto.com also spent millions for notorious adverts in the big game. Armstrong also admitted at the first round of layoffs that the company had expanded too quickly.

What next for crypto?

For crypto, this news in isolation does not mean much. It is merely an anecdote which underlines the scale of the damage this past year. Coinbase was the bellwether for the industry, the first high profile crypto company to go public, at a time when most expected a slew of companies to follow.

But the market has transformed entirely. And for it to bounce back, there is no other way to put it: the macro climate needs to ease up such that the tightening interest rate climate can be loosened up. Crypto trades like a high risk asset, and hence the loose monetary policy and basement-level interest rates of the past decade have propelled it boisterously.

That is now over. But with inflation seeming to soften to open the year, hope is renewed that the Federal Reserve may move back to even a “normal” monetary climate sooner than originally anticipated. Then, and only then, can crypto investors begin to think about heading vertically on charts.

For now, it is a wait-and-see approach, with the next all-important inflation data in the US out Thursday.

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People want to see regulated firms that have major global accounting firms, says Circle’s CEO

  • Jeremy Allaire believes it is important for more crypto companies to become SEC-registered.

  • He added that there is a need for regulated firms in the cryptocurrency space.

  • Allaire says he stores assets on both cold storage wallets and regulated crypto platforms.

More crypto companies need to be SEC-regulated

Jeremy Allaire, the CEO of Circle, told CNBC in a recent interview that he believes more cryptocurrency companies should be SEC-regulated. Circle is the company behind the USDC stablecoin.

When asked if he would leave his money on Binance, Allaire said;

“I think right now, everyone is trying to ask, ‘what are safe places to hold your crypto? People want to see regulated firms that have major global accounting firms that are providing public company levels of audit.”

He added that storing coins in external wallets where users hold can hold their tokens and be in charge of their keys is an excellent choice. However, he added that more companies in the space need to be regulated by the Securities and Exchange Commission (SEC).

When asked if Circle is using cold storage wallet or if it had funds in some crypto platforms. Allaire said;

“The Allaire family has a mixture of cold storage and qualified, regulated custodians. These companies are regulated inside the United States.”

The stablecoin war heats up

The past few months have seen an increasing war amongst stablecoin issuers in the cryptocurrency space. In September, Binance, the world’s leading crypto exchange, announced that it would begin auto-converting USDC, USDP, and TUSD to BUSD (Binance USD) in a bid to enhance liquidity and capital efficiency for users.

Last week, Coinbase urged its users to swap their USDT stablecoin for USDC. According to Coinbase, USDC is the more trusted and reputable stablecoin.

USDT remains the leading stablecoin, with a market cap of $65 billion. It is closely followed by USDC with a $45 billion market cap, while Binance’s BUSD has an $18 billion market cap.

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Cathie Wood’s Ark Invest buys another $3.2 million worth of Coinbase shares

  • Ark Invest has invested another $3.2 million in Coinbase, bringing its total shares to 5.8 million.

  • COIN is up by nearly 4% during Thursday’s pre-market trading session.

  • Coinbase has underperformed this year and could record losses by the end of the year.

Ark Invest purchases $3.2 million worth of Coinbase shares

Cathie Wood’s Ark Invest revealed a few hours ago that it had purchased $3.2 million worth of Coinbase shares (COIN). The investment firm continues to increase its exposure to the company despite the ongoing bear market.

Following this latest development, Ark Invest now holds 5.8 million COIN shares, worth approximately $228 million. COIN is a part of its tech-focused ARK Innovation ETF (ARKK) as the company doubles down on investments during the bear market.

The latest investment comes a few days after Ark Invest purchased 78,982 shares of Coinbase shares at $3,184,554.24. 

COIN has responded positively to the news of Ark Invest’s latest investment. The stock price is up by 3.8% during Thursday’s pre-market trading session and is now trading at $40.19. 

COIN is down by 83% YTD

Despite performing well over the past few hours, COIN has underperformed since the start of the year. Year-to-date (YTD), COIN has lost 83% of its value, thanks to the broader cryptocurrency market experiencing a bearish trend.

COIN began the year trading at $251 per share but is now trading just above $40 per share. Bitcoin and the other leading cryptocurrencies have lost more than 75% of their value over the last 12 months, a major factor that affected COIN’s performance.

Brian Armstrong, the CEO of Coinbase, revealed earlier this month that he expects the company’s 2022 revenue to decline by 50% or more compared to what they recorded in 2021. He said;

“Last year in 2021, we did about $7 billion of revenue and about $4 billion of positive EBITDA, and this year with everything coming down, it’s looking, you know, about roughly half that or less.”

In 2021, the company generated around $7 billion in revenue, but market analysts expect the figure to drop to $3.2 billion in 2022. 

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