It’s an exciting time in crypto with prices moving in the direction we all like.
There’s plenty going on in the news too: some good, some bad, but all potentially important.
So let’s get started with the latest from Coinbase, where there are hints at a shift taking place.
Here’s what’s in today’s issue:
- Sam shares his thoughts on Coinbase beating Q3 revenue expectations, OpenSea cutting staff and restructuring, the Swiss National Bank launching a CBDC pilot scheme, BitGo and Copper offering exchange access from cold storage & AI boosting Dune Analytics.
- This week on chain.
- This week’s trending coins by Rebecca.
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Coinbase Q3 Revenue Beats Expectations
Last week, Coinbase published a summary of its Q3 financials, and the positive news to come from it is that earnings and revenue exceeded expectations.
The Q3 2023 Shareholder Letter (and by the way, Coinbase is quick to point out that as the only public crypto exchange, it’s the only one to publish details this way) declares from the start that “Q3 was a strong quarter for Coinbase”, and shows that:
- Total revenue was 674.1 million, against expectations of 650.9 million.
- Transaction revenue made up 288.6 million, down from 327.1 million last quarter.
- Subscription and services revenue was 334.4 million, almost the same as the 335.4 million last quarter.
The report also shows trading volume falling to $76 billion, from $92 billion last quarter (while it was at $159 million one year ago), with institutional activity continuing to make up the bulk of volume.
This is the second quarter in a row that subscription and services revenue has topped transaction revenue, and it’s by a wider margin this time, so what does tell us about where Coinbase is heading?
The data overall looks relatively positive considering the macro environment and where we are in the crypto cycles, and it seems like Coinbase has powered through and can benefit greatly from increased transactions if the crypto markets pick up from here.
At the same time though, it’s notable that Coinbase is increasingly profiting from services and subscriptions–meaning revenue generated from the likes of Base, USDC (from which revenue is shared between Circle and Coinbase), and custody fees–and that the exchange is centered within a network of valuable products and services.
But what are your thoughts about Coinbase, do you think it can dominate the crypto space as more than just an exchange, and is it a good idea to hold COIN besides your crypto? Reply to this email and tell us what you think.
OpenSea to Cut Staff and Restructure
Over at the first major NFT marketplace OpenSea, there was less buoyant news, as the platform has announced that it’s cutting its staff by 50%.
Co-founder and CEO Devin Finzer put a positive spin on the announcement, framing changes as part of a move towards OpenSea 2.0, which is aiming to be a more efficient organization, and wants “to move with speed, quality, and conviction to make more meaningful bets.”
OpenSea first launched back in 2017, when most people had never even heard of the term NFT, and has been central to the space since then.
However, it’s frequently come under criticism (perhaps unfairly, but hey, that’s one for NFT Twitter to argue about), including for–among many other gripes–not rewarding its users with a token launch.
What’s more, this is while rival Blur, which is all about token farming, has grabbed a huge amount of market share, although Blur too has come under fire for the ways its token incentives distorted the market, so maybe NFT traders just like venting at exchanges.
Yuga Labs and Magic Eden Working Together on New Marketplace
Meanwhile in the cozy world of NFTs, Bored Ape creator Yuga Labs and always-innovative marketplace Magic Eden are teaming up to work on a new platform.
According to the latest announcement, this will be an Ethereum marketplace that is designed to enforce creator royalties (a topic that has been a major issue this year in NFTs.)
Yuga Labs has made clear that it believes strongly in rewarding creators, and the new marketplace is scheduled to launch by the end of this year.
Swiss National Bank Launching CBDC Pilot Scheme
Over in the expensive Alpine fortress known as Switzerland, the Swiss National Bank is embarking on a pilot project to test the viability of wholesale CBDCs. The venture is called Helvetia Phase III, which admittedly is a cool-sounding label, and it will run from December 2023 to June 2024.
Just to be clear, this is not a public retail CBDC (used in place of money), and is being tested by several major Swiss banks to assess ways of settling digital asset transactions, in this case focusing on bond and repo transactions in CHF.
And in other banking related developments from Switzerland, the fifth largest cantonal bank, St. Galler Kantonalbank, is now offering BTC and ETH custody and trading. This is in partnership with the Switzerland-based SEBA Bank, which specializes in crypto, the services are being offered to selected clients, and there are plans to add other cryptocurrencies in future.
BitGo and Copper to Offer Exchange Access From Cold Storage
BitGo, which specializes in digital asset services for institutional clients, and Copper, the crypto custody firm, are partnering to offer new services aimed at allowing institutional users to access and trade on spot and derivatives exchanges, while keeping assets safely off-exchange in cold storage custody.
Accessible exchanges will include Bybit, OKX and Bitstamp, among several others, and the move comes at a critical moment: institutional investors are interested in crypto and the market is picking up, but the collapse of FTX (and other platforms) damaged trust and emphasized the need to remove counterparty risk.
With this new development though, BitGo and Copper are now addressing exactly these issues, and that can only be a positive for crypto adoption.
AI Boosts Dune Analytics
If you want the latest crypto data, then Dune Analytics is a valuable resource, and it’s about to increase its accessibility through the use of AI.
The new innovation, called DuneAI (name checks out) will let users ask questions and get data and insights using entirely natural language, and means there’s no SQL database knowledge required.
Alongside this, Dune is also launching the Dune Data Hub, which lets enterprises upload and extract data, and will (according to Dune) operate at a scale that can integrate with services such as Amazon S3 and Google’s BigQuery.
We all know that BTC has performed exceptionally well this year in dollar terms, but how do both BTC and ETH measure up against gold in 2023 so far?
The answer is, not badly at all (particularly in the case of bitcoin), with BTC up 93% this year against gold, while the comparable figure for ETH is 39%.
And when it comes to volatility, both BTC and ETH have been much more volatile than gold, as you might expect, but of the two major cryptocurrencies, BTC has shown much stronger upside volatility than ETH, while downward movements are more closely aligned between the two.
And focusing in just on digital assets, we can find that Bitcoin’s market cap dominance has continued to rise, while ETH, altcoins combined, and stablecoins have all dropped similarly to one another. That said though, while Bitcoin’s market cap has grown by 110% this year to date, the altcoin market cap has still recorded a 37% increase.
Also, one other striking piece of data when it comes to bitcoin is that the GBTC discount against BTC has narrowed from 41% to 15% across just around five months, in line with increasing confidence that the SEC will give the green light for the Trust to be converted into a spot ETF.
When it comes to stable coins and the market liquidity they bring, there’s reason to be positive as it looks like the percentage change in supply over 90 days may be about to switch from negative to positive. This fits in with suggestions that the low is in for stablecoin supply, which is important if crypto is really moving into bull market territory.
Also, it follows that there’s a clear correlation between crypto prices and USD liquidity in the market–as brought by stablecoins–so it makes sense to keep track of supply, and in that case it looks like we’re at the beginning of a shift, as liquidity that had left the market begins to return.
And just to check in with NFTs for a moment, the revival continues, with NFT trading volume continuing to rise, now reaching almost its highest point in three months. Notably, the MEME token from Memeland launched last week, and is likely to have fuelled some of the trading that’s been taking place since then.
Shifting our attention across to Ethereum Layer 2s, the number of weekly active wallets recently hit a new all-time high, showing that there’s an active ecosystem, and suggesting that L2 development will continue to be a strong narrative from here.
And if you’re looking for a protocol that has gone from strength to strength, even through the depths of the bear market, then look no further than MakerDAO, which has performed well over the space of the past year, as it’s revenue has increased about tenfold from around 50,000 USD to over 500,000 USD, which actually takes the figure to a little higher than the previous peak in mid-2021.
Compared to Ethereum L2s and alternative Layer 1s such as Solana, Cardano has been out of the spotlight recently, but if we look at TVL on Cardano, we can see that there’s been steady growth this year, and a sharper spike over the past month. TVL is currently at around 285 million USD, while it was at only around 65 million USD at the start of the year.
In past cycles, Cardano has tended to move a little later than other protocols, although all while steadily building, and it looks possible that trend may continue.
Here are my key takeaways from the trends this week and whilst Bitcoin is in accumulation at $35K the altcoins are taking off!
- Arbitrum is an Ethereum Layer-2 scaling solution that’s teasing its upcoming digital collectible collaboration with car maker Fiat. Arbitrum has also broken out of its double-bottom pattern on the USD trading pair.
- Dione is a Layer-1 blockchain that’s launched the 45-day public testing phase of its Odyssey Chain Testnet.
- Celestia is a modular data availability network that’s just launched its mainnet with the airdrop of its native token TIA. The launch was lackluster with less than 350,000 transactions in the first 4 days and $1M in unclaimed airdrop tokens.
- Toncoin is the native token for the TON blockchain inherited from Telegram that’s set a new record for the world’s fastest network after processing around 42M transactions at a speed of 104,715 transactions per second (TPS).
- DinoLFG is a memecoin that’s teasing an upcoming announcement in the next week and crypto influencer, Cryptoking, has bought $5,000 worth of DINO tokens in one day.
- Rollbit is a lottery token that’s just listed AVAX and MEME for futures betting. Rollbit’s RLB token has more than doubled since late September, so there’s anticipation that whales will take profits leading to a trend reversal.
- Litecoin is a Bitcoin fork that’s hit a new all-time high in its network hashrate after celebrating its 12th birthday in October. The Litecoin Foundation has also launched an auction of collectibles.
- Vulcan Forged is a blockchain gaming studio that’s hosted a
- Solana is a Layer-1 blockchain that’s completed its Breakpoint conference and announced Circle’s EURC stablecoin will launch on the network. Solana’s Magic Eden has also partnered with Yuga Labs to launch a new royalty based NFT marketplace.
- Memecoin is a memecoin by Memeland that’s launched its token airdrop and firesale for users to claim. Its MEME token has also been listed on Binance and Rollbit.
- Chainlink is a decentralized oracle network that’s had a post go viral on X showing the possibilities of NFTs for storing car data on-chain.
- Unibot is a Telegram trading bot on Uniswap that’s fully reimbursed users affected in its recent $630K exploit.
- Render is an image and video rendering protocol that’s completed its transition from Ethereum to Solana.
- Tectum is a Layer-1 blockchain that’s hit the milestone of 7,500 TET holders. Tectum has also partnered with Future Lounge to showcase its projects.
- PancakeSwap is a DEX on BNB Smart Chain that’s seen its CAKE token gain 92% in the past week after introducing a new Portfolio Manager feature.
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
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