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Coinbase Reports Incredible Quarter, But Valuations Remain Uncertain: What to Expect https://bitcoinist.com/coinbase-reports-incredible-quarter-but-valuations-remain-uncertain-what-to-expect/?utm_source=rss&utm_medium=rss&utm_campaign=coinbase-reports-incredible-quarter-but-valuations-remain-uncertain-what-to-expect
https://bitcoinist.com/?p=148527
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<p><span>Crypto exchange giant Coinbase released its earnings for the first fiscal quarter of 2021 ahead of its </span><a href=”https://bitcoinist.com/coinbase-to-direct-list-on-the-nasdaq-on-april-14th/” data-wpel-link=”internal”><span>direct listing on the Nasdaq on April 14</span></a><span>. Its revenue skyrocketed to a record-setting $1.8 billion — singlehandedly topping all of last year’s revenue combined.&nbsp;</span></p>
<p><span>The company attributed its parabolic growth and blowout earnings to Bitcoin’s red-hot rally. As the major cryptocurrency retests $60,000, its yearly return on investment (ROI) sits at 900% — an unprecedented level of growth for an asset class with a market capitalization over $1 trillion.&nbsp;</span></p>
<p><span>“We have seen all time high crypto prices drive elevated levels of user activity and trading volume on our platform. We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class,” Coinbase CEO Alesia Haas said.&nbsp;</span></p>
<h2><b>Coinbase Exceeds Expectations in All Major Earnings Metrics</b></h2>
<p><span>With crypto being all the rage this year, most cryptocurrency exchanges have enjoyed a massive influx in trading volume and users. Per </span><a href=”https://www.businesswire.com/news/home/20210406006015/en/” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>BusinessWire</span></a><span>, Coinbase’s trading volume increased by 276% to $335 billion, and its quarterly revenue hit $1.8 billion. Net income for Q1 was estimated to be anywhere between $730 million and $800 million.</span></p>
<p><span>The number of active users on the platform increased from 2.8 million in Q4 2020 to 6.1 million in Q1 2021. Verified users (who have undergone KYC procedures) saw a 30% increase to 56 million. As for the exchange’s balance sheet, Coinbase saw its crypto assets appreciate by 1,200% from $17 billion to $223 billion. Considering that the combined market capitalization of the crypto market hit $2 trillion not long ago, this would place Coinbase’s holdings at a whopping 11% of total market share.</span></p>
<h2><b>Market Valuation Remains Uncertain; Bulls and Skeptics Weigh In&nbsp;</b></h2>
<p><span>Despite Coinbase’s incredible first quarter results, analysts and investors alike have been split on the crypto exchange’s valuation. According to FTX’ Coinbase “</span><a href=”https://ftx.com/en/trade/CBSE/USD” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>pre-IPO contract</span></a><span>” — which is currently at $527 — investor sentiment seems to have placed Coinbase’s valuation at a generous $137 billion.&nbsp;</span></p>
<div id=”attachment_148528″ class=”wp-caption alignnone” readability=”24.941176470588″><img aria-describedby=”caption-attachment-148528″ loading=”lazy” class=”wp-image-148528 size-full” src=”https://bitcoinist.com/wp-content/uploads/2021/04/download-2.png” alt width=”1347″ height=”790″><p id=”caption-attachment-148528″ class=”wp-caption-text”>Pre-listing contract value of Coinbase (CBSE/USD) on <a href=”https://www.tradingview.com/chart/?symbol=FTX%3ACBSEUSD” data-wpel-link=”exclude” target=”_blank” rel=”follow noopener”>Tradingview.com</a></p></div>
<p><span>Analysts at Investment bank DA Davidson raised Coinbase’s price target by 125% following its blowout quarter. Reiterating a buy rating, Davidson gave the crypto exchange a 20x forward price to sales ratio, which would equate to approximately $90 billion in market capitalization given total shares outstanding.&nbsp;</span></p>
<p><span>On the other hand, research firm New Constructs stated that the crypto exchange’s valuation should be closer to $18.9 billion. Their reasoning for the significantly lower valuation was primarily due to declining industry-wide transaction margins. With more exchanges competing for users, it’s a race to the bottom for the lowest possible fees. </span></p>
<p><span>In a research note, New Constructs CEO asserted that Coinbase had “little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high expected valuation.”</span></p>
<p><span>While that may be true, many recent IPOs and growth stocks at large have commanded exorbitantly high valuations compared to earnings. As a reference point, Bitcoin holders Square (</span><a href=”https://www.tradingview.com/chart/?symbol=NYSE%3ASQ” data-wpel-link=”exclude” target=”_blank” rel=”follow noopener”><span>$SQ</span></a><span>) and Tesla (</span><a href=”https://www.tradingview.com/chart/?symbol=NYSE%3ASQ” data-wpel-link=”exclude” target=”_blank” rel=”follow noopener”><span>$TSLA</span></a><span>) trade at price-to-equity ratios of 594 and 1057, respectively. </span></p>
<p><span>These companies often trade at higher premiums because its future earnings growth is accordingly priced in. When considering the incredible potential upside of the crypto industry, Coinbase’s $100 billion valuation appears to be fairly justifiable.&nbsp;</span></p>
<p><span>Nonetheless, $COIN will become available to trade on the Nasdaq exchange in four days.</span></p>
<pre><span>Featured image from UnSplash</span></pre>

<p><strong><a href=”https://blockads.fivefilters.org”></a></strong> <a href=”https://blockads.fivefilters.org/acceptable.html”>(Why?)</a></p> Sat, 10 Apr 2021 11:20:11 +0000 San Lee
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https://bitcoinist.com/coinbase-reports-incredible-quarter-but-valuations-remain-uncertain-what-to-expect/
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Bitcoin Investment Firm NYDIG Raises Additional $100 Million https://bitcoinist.com/bitcoin-investment-firm-nydig-raises-additional-100-million/?utm_source=rss&utm_medium=rss&utm_campaign=bitcoin-investment-firm-nydig-raises-additional-100-million
https://bitcoinist.com/?p=148523
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<p><span>Crypto investment provider NYDIG raised an additional $100 million in growth capital earlier this week. The new funding round featured MassMutual, Stone Ridge Holdings, New York Life, and Liberty Mutual Insurance, among others as strategic partners. This follows the investment firm’s </span><a href=”https://bitcoinist.com/bitcoin-firm-nydig-gets-200m-injection-from-morgan-stanley-soros/” data-wpel-link=”internal”><span>$200 million cash injection back in early March.</span></a><span>&nbsp;</span></p>
<p><span>In the previous funding round, Robert Gutmann, CEO of NYDIG, stated that the additional funds would be used to develop “Bitcoin-related strategic initiatives spanning from investment management, insurance, banking, clean energy, and philanthropy.” With recent funding and strategic hires, Gutmann promised to deliver an “explosion of innovation in Bitcoin products and services.”</span></p>
<h2><b>How Potential Inflation has led to NYDIG’s Growth&nbsp;</b></h2>
<p><span>Ross Stevens, CEO of Stone Ridge and Executive Chairman of NYDIG, continued, “Fiat depreciation causes inflation in fiat premiums, while collapsing the purchasing power of claims. We see a brighter bitcoin-powered future for the billions who depend on the insurance industry every year.” More simply put, high inflation erodes the current value of fixed-rate future payments — which is an obvious detriment of insurance companies. Using Bitcoin over fiat, insurers can indirectly “hedge” against inflation.&nbsp;</span></p>
<p><span>Growing institutional demand for cryptocurrencies has led to NYDIG nearing $6 billion in assets under management. The firm partnered with Morgan Stanley’s private wealth management arm to offer Bitcoin investments to wealthy clients.&nbsp;</span></p>
<p><span>The New-York based firm also </span><a href=”https://www.prnewswire.com/news-releases/nydig-raises-100-million-from-strategic-partners-including-starr-liberty-mutual-insurance-and-other-pc-insurers-launches-global-insurance-solutions-business-under-mike-sapnar-301264834.html” data-wpel-link=”exclude” target=”_blank” rel=”follow noopener”><span>announced</span></a><span> that Mike Sapnar, CEO of major insurance company TransRe, would join the company as the global head of insurance solutions, assisting the firm in paving the way for “Bitcoin-driven innovation” in the property and casualty industry.&nbsp;</span></p>
<p><span>“With the addition of Mike Sapnar, a trusted partner for years, and now with Starr, Liberty Mutual, New York Life, and MassMutual as shareholders of NYDIG, we will be working tirelessly to enable new Bitcoin-denominated products for global insureds,” Stevens said.</span></p>
<pre>Featured image from UnSplash</pre>

<p><strong><a href=”https://blockads.fivefilters.org”></a></strong> <a href=”https://blockads.fivefilters.org/acceptable.html”>(Why?)</a></p> Sat, 10 Apr 2021 07:12:58 +0000 San Lee
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https://bitcoinist.com/bitcoin-investment-firm-nydig-raises-additional-100-million/
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Over 70% of US investors looking to DeFi in 2021 https://bitcoinist.com/over-70-of-us-investors-looking-to-defi-in-2021/?utm_source=rss&utm_medium=rss&utm_campaign=over-70-of-us-investors-looking-to-defi-in-2021
https://bitcoinist.com/?p=148519
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<p><span>If participating in DeFi doesn’t make you feel like standing at the gates of disruption, just waiting for someone to turn around the key, you’re likely doing it wrong.&nbsp;</span></p>
<p><span>To contextualize the changes in DeFi over the last year, it is essential to recap that, just one year ago, in April of 2020, </span><a href=”https://defipulse.com/” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>the now $51 Billion</span></a><span> of value locked in DeFi protocols reached an All-Time-High of a “mere” 700 million. Because of this, it should be no surprise that, according to a recent survey, </span><a href=”https://www.prnewswire.com/news-releases/new-report-shows-72-of-us-accredited-investors-plan-to-invest-in-defi-this-year-301242940.html” data-wpel-link=”exclude” target=”_blank” rel=”follow noopener”><span>as many as 72%</span></a><span> of US and 60% of UK’s accredited investors aim to utilize DeFi over the coming year.&nbsp;</span></p>
<hr>
<h2><strong>Changing times, booming industries</strong></h2>
<p><span>Value locked isn’t the only thing that has changed in DeFi. Thanks to the growing interest in these protocols, the supply of stablecoins in the crypto market </span><a href=”https://www.entrepreneur.com/article/362319″ data-wpel-link=”exclude” target=”_blank” rel=”follow noopener”><span>has grown beyond $26 billion</span></a><span>, </span><a href=”https://polkadot.network/” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>Polkadot’s</span></a><span> network has witnessed a 44% increase in developer activity, and the traffic of Ethereum’s network has grown to critical heights, soaring beyond the imaginable.&nbsp;</span></p>
<p><span>According to </span><a href=”http://eqifi.com” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>EQIFi’</span></a><span>s Chairman, Jason Blick, the way institutions and governments think about these instruments has also changed. Jason tells us:</span></p>
<blockquote readability=”6″><p><strong><i>“Bank of America analyst Francisco Blanch recently claimed that “DeFi is the most fundamental challenge to modern finance that we’ve encountered. He’s 100% right.”</i></strong></p></blockquote>
<h2><strong>Is DeFi ready to meet 70% of all American investors?</strong></h2>
<p><span>Jason, and many others, know the data well enough to be excited about 2021 becoming just as big as 2020 in History books. As Chairman of a fully-regulated bank that offers access to cryptocurrencies and DeFi instruments to high-net-worth individuals and companies (two sectors left behind by mainstream crypto adoption), he exhibits a calming certainty. Jason also thinks that those not following </span><a href=”http://eqifi.com” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>EQIFi’s</span></a><span> example of providing customers with regulated access to DeFi will suffer in the future.</span></p>
<blockquote readability=”13″><p><em><span>As he says, “</span><span>The future of finance, especially for traditional centralized institutions, will be determined by how they deal with the challenge of DeFi. They can choose to embrace it, modernize their systems and the fundamentals of how they run their business, or they can fall by the wayside. It’s as simple as that.”</span></em></p></blockquote>
<p><span>Indeed, the stars seem to be aligned for DeFi’s second great wave to take the world by storm. Almost in agreement, <a href=”https://bitcoinist.com/nigeria-fight-back-against-central-bank-cryptocurrency-limitations/” data-wpel-link=”internal”>crypto</a> users (and those waiting on the sidelines) seem to wait for the final piece of the puzzle to roll up the curtains.&nbsp;</span></p>
<h2><strong>Ethereum 2.0: The great disruptor</strong></h2>
<p><span>Despite the recent interest in alternative chains, Ethereum continues to be the network of choice of DeFi protocols. There, however, has been controversy on the increasing congestion of the ETH network, as we mentioned above. In fact, this excess traffic has caused transaction costs to rise to near-three-figure sums, making DeFi too costly to operate for average retail investors.&nbsp;</span></p>
<p><span>Ethereum’s founder, Vitalik Buterin, has recently commented on the complex changes that the Ethereum Foundation aims to implement </span><a href=”https://vitalik.ca/general/2021/04/07/sharding.html” data-wpel-link=”external” target=”_blank” rel=”nofollow noopener”><span>to increase significantly the number of transactions that ETH can process</span></a><span> without affecting its security. He also expressed his interest in keeping the chain decentralized. Since Ethereum aims to scale to become a “worldwide, decentralized supercomputer”, these changes are critical for the network to withstand the subsequent computational requirements.&nbsp;</span></p>
<p><span>However, the good news is that, after a criticized waiting period, Ethereum 2.0 is now on track to debut in the near future. If 70% of America’s accredited investors and 60% of those in the UK are looking to get into DeFi (either directly, through a bank, or a crypto exchange), they’ll be met by growing innovation, more efficient chains, and, maybe, a smiling “I told you so” from the crypto community.&nbsp;</span></p>
<hr>
<p><em><strong>Disclaimer: The information presented here does not constitute investment advice or an offer to invest. The statements, views, and opinions expressed in this article are solely those of the author/company and do not represent those of Bitcoinist. We strongly advise our readers to DYOR before investing in any cryptocurrency, blockchain project, or ICO, particularly those that guarantee profits. Furthermore, Bitcoinist does not guarantee or imply that the cryptocurrencies or projects published are legal in any specific reader’s location. It is the reader’s responsibility to know the laws regarding cryptocurrencies and ICOs in his or her country.</strong></em></p>

<p><strong><a href=”https://blockads.fivefilters.org”></a></strong> <a href=”https://blockads.fivefilters.org/acceptable.html”>(Why?)</a></p> Fri, 09 Apr 2021 18:04:59 +0000 Bitcoinist
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https://bitcoinist.com/over-70-of-us-investors-looking-to-defi-in-2021/
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