Coinbase earnings rocket, Ethereum ETF hopes grow, and Bitcoin marches on
DATA from CryptoCompare shows that the price of Bitcoin moved slightly up throughout the past week, rising from around $48,000 to now trade at $52,300 after breaking through the psychological resistance at $50,000 for the first time since December 2021.
Ethereum’s Ether, the second-largest cryptocurrency by market capitalization, saw a more pronounced rise throughout the week, moving from around $2,500 to surpass $2,900 as it moves towards the $3,000 mark.
Headlines in the cryptocurrency space this week focused on Bitcoin’s price performance and future outlook, with Bitcoin options traders setting their sights on new all-time highs for the cryptocurrency. Data from options trading platform Deribit has shown a surge in open interest for call options expiring on March 29, with strike prices going to $75,000.
Bitcoin’s price has been rising as inflows from the recently launched spot Bitcoin exchange-traded funds (ETFs) keep on growing, while miners offload their holdings in anticipation of the network’s upcoming halving event in April, which will reduce Coinbase block rewards miners receive from 6.25 BTC to 3.125 BTC per block.
The halving is expected to further pressure BTC’s circulating supply, as demand is seemingly growing after the launch of the spot Bitcoin ETFs.
Nevertheless, miners have seen significant revenue from Ordinals launched on the Bitcoin network, having earned over $200 million from Ordinals transaction fees since their launch. These transactions now account for about a fifth of miners’ income.
Over the week, leading trade groups have urged the U.S. Securities and Exchange Commission (SEC) to alter accounting rules that currently increase the cost for U.S. banks to hold cryptocurrencies and other digital assets on behalf of their clients.
The banks’ coalition, comprising organizations like the Bank Policy Institute, the American Bankers Association, the Securities Industry and Financial Markets Association, and the Financial Services Forum, argues that current rules are too expensive and hinder their ability to offer digital asset services
Instead, the coalition suggests excluding certain assets from the definition of cryptocurrency and exempting themselves from recording these assets as liabilities, while still disclosing their crypto activities. The SEC, however, is concerned about the risks associated with crypto and wants to maintain stricter regulations.
The week also saw Citigroup explore the tokenization of private equity funds with the use of blockchain technology. In collaboration with Wellington Management and WisdomTree, Citigroup conducted a proof of concept to demonstrate the practicality of issuing and managing tokenized private equity funds within a controlled environment.
Coinbase smashes Q4 earnings estimates
Nasdaq-listed cryptocurrency exchange Coinbase has significantly outperformed analysts’ expectations in the last quarter of 2023, exceeding both earnings and revenue forecasts. The company revealed earnings per share of $1.04, above the $0.02 analysts estimated, and revenue of $953.8 million, topping the $826.1 million forecasted.
Coinbase’s performance benefitted from the launch of spot Bitcoin ETFs in the United States and from a 100% increase in trading volume compared to the third quarter of the year.
Meanwhile, venture capital investment in cryptocurrency-related start-ups rose 2.5% in the final quarter of 2023 to reach $1.9 billion. The figure marks the first uptick in VC investment in cryptocurrency start-ups since early 2022, after rising interest rates and the collapse of crypto giants, including FTX and Terra, which affected the market.
This week also saw global investment manager Franklin Templeton, which manages $1.5 trillion worth of assets, join the race to launch a spot Ether exchange-traded fund (ETF) after filing an application to list the "Franklin Ethereum ETF" on the Chicago Board Options Exchange.
Franklin Templeton’s ETF stands out as it plans to stake a portion of its ETH holding to generate additional income, echoing a strategy adopted by ARK 21Shares.
NYAG expands crypto lawsuit against DCG, Gemini to $3 billion
Over the week New York Attorney General (NYAG) Letitia James intensified her legal battle against the Digital Currency Group (DCG) and other cryptocurrency entities, alleging investor losses of over $3 billion.
The NYAG sued crypto lender Genesis and exchange Gemini for alleging misleading cryptocurrency investors and leading to losses exceeding $1 billion through the Gemini Earn program, which allowed investors to lend funds in exchange for returns.
The NYAG wants DCG and its affiliates to pay back more than $3 billion to the 230,000+ investors who were allegedly harmed by their actions, making the lawsuit much bigger and broader.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
