Coinbase, the largest crypto exchange in the US, valued at $68 billion ahead of direct listing

coinbase mobile phone app
In this photo illustration, Bitcoin course’s graph is seen on the Coinbase cryptocurrency exchange application on February 12, 2018 in Paris, France. Founded in June of 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like bitcoin, ethereum, and litecoin. The company is based in San Francisco, California generated in 2017 a record turnover of one billion dollars (about 810 million euros) with exceptional trading volumes, which made it the most downloaded mobile app on iOS last December.

  • Coinbase Global on Wednesday revealed that the company now has a valuation of $68 billion ahead of its planned direct listing, Reuters first reported.
  • If the filing is approved by regulators, it will mark a significant milestone for the digital currency ecosystem.
  • Coinbase CEO Brian Armstrong and other executives will host an “Ask me anything” session on Reddit through the end of the week.
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Coinbase Global, the largest cryptocurrency exchange in the US, on Wednesday revealed that the company now has a valuation of $68 billion ahead of its planned direct listing due in large part to recent private transactions, Reuters first reported.

The increased valuation signifies how much the company’s value has surged alongside the huge rally in the price of bitcoin, which hit record highs in March. The company in a regulatory filing that Reuters first reported said its shares in the private market traded at an average price of $343.58 per piece in the first quarter of 2021, a massive rise from $28.83 per piece in the third quarter of 2020.

If the filing is approved by regulators, it will mark a significant milestone for the digital currency ecosystem that has sometimes struggled to earn the confidence of more conservative regulators and investors. D.A. Davidson analysts in early March said the listing is crucial since it symbolizes the convergence of cryptocurrency and traditional finance.

D.A. Davidson analysts led by Gil Luria also added that Coinbase’s public debut will be the “Amazon moment for crypto,” as cryptocurrency will move from “a large curiosity to becoming the future path for much of the financial system.”

The San Francisco-based company, however, did not indicate if the US has authorized it to trade cryptocurrencies, which the government classifies as securities. Founded in 2012, Coinbase has registered roughly 114.9 million shares for its direct listing.

On Wednesday, Coinbase CEO and co-founder Brian Armstrong published a post on Reddit, asking people for comments and questions about his company, the valuation, its future financial performance, and cryptocurrencies as a whole. Armstrong and other executives will host an “Ask me anything” session on the social media platform through Friday at 10 pm ET.

Coinbase has 43 million users in more than 100 countries. Its competitors include Grayscale, Kraken, and Gemini, as well as broader consumer digital wallets like Square, PayPal, and Robinhood.

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Cryptocurrency inflows hit record high of $4.2 billion for the first quarter

Photo illustration of visual representations of digital cryptocurrencies
Photo illustration of visual representations of digital cryptocurrencies

  • Inflows to cryptocurrency investment products a new peak of $4.2 billion for the first quarter of 2021, according to CoinShares.

Inflows to cryptocurrency investment products reached a new high of $4.2 billion for the first quarter of 2021, according to data from digital assets investment firm CoinShares.

The new record broke the previous quarterly high of $3.9 billion in the fourth quarter of last year, CoinShares data show. Year to date, bitcoin has seen the highest inflows at $3.3 billion. Ethereum followed with $731 million.

Crypto assets under management, according to CoinShares, have also risen to $55.8 billion versus $37.6 billion at the end of 2020.

Bitcoin in March has staged another strong rally after an already impressive February, soaring to $61,742 on March 13. It has so far breached the $1 trillion market capitalization mark three times this year.

The uptrend builds on the token’s big wins in February, when it garnered support from heavyweight companies such as Tesla and Mastercard.

Bitcoin however has since consolidated its gains, partly in response to profit taking, but also as a reaction to India announcing it was mulling a law that would ban cryptocurrencies on Monday.

“Looking at the bigger picture, last weekend’s break above its previous high was a(nother) positive sign in the long run-up of [bitcoin] and a confirmation of the current uptrend,” Julius de Kempenaer, senior technical analyst at StockCharts.com told Insider.

He also said he sees the $52,000-level as the support and the $61,700-level as the resistance.

“The rhythm of higher highs and higher lows that is tracing out since the start of this year is still intact… As long as this support level and the rising trend line hold up, things continue to look good for [bitcoin].”

Inflows from retail traders have overtaken institutional investment this quarter, according to data published by JPMorgan strategists, proving the rising levels of interest from retail traders, most of whom are younger, more aggressive, and use mobile trading apps such as Robinhood.

In the same period, institutions bought 173,000 bitcoins, lower than the nearly 307,000 bought last quarter, compared to the 187,000 bitcoins bought by retail investors. JPMorgan tracked bitcoin futures, fund flows, and company announcements to gather this data.

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Binance, the world’s largest crypto exchange, appoints former US senator Max Baucus as government liaison

Crypto application.

Binance Holdings on Thursday announced it has appointed Maxwell Baucus, a former Senator for Montana, as its policy and government-relations adviser.

The 79-year-old Democrat will be providing high-level guidance to the world’s largest cryptocurrency exchange, bringing with him “a wealth of political and regulatory expertise” after more than 30 years in American politics, including a seven-year run as Chairman of the Senate Finance Committee, the statement said.

Baucus, who also served as US ambassador to China from 2014 to 2017, will “play a key role consulting and liaising with US regulators and authorities” on policies that will affect and impact the cryptocurrency ecosystem, the statement added.

“His experience at the highest levels of government and intimate understanding of global regulation brings exceptional value to Binance and enhances our already strong compliance and policy team,” Binance CEO Changpeng Zhao said.

The Malta-based company currently does not serve US residents. In 2019, it set up a San Francisco-based bureau in the hopes of addressing that.

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22% of Goldman Sachs clients expect bitcoin to exceed $100,000 in 12 months

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Bitcoin has fallen sharply from all-time highs this week

  • Goldman Sachs in a recent survey revealed that 22% of its clients expect bitcoin’s price to hit at least $100,000 in the next 12 months. 
  • 54% predict the price of the cryptocurrency will hover between $40,000 to $100,000 in the same period. 
  • Published on March 3, the investment bank surveyed 280 respondents on their exposure, perspective, and outlook of digital assets. 
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Goldman Sachs said that 22% of its clients expect the price of bitcoin to hit at least $100,000 in the next 12 months, according to a survey from the investment bank seen by Coinbase. Meanwhile, 54% of the respondents predict the price of the cryptocurrency will hover at $40,000-$100,000 in the same period. 

Published on March 3, the investment bank surveyed 280 respondents on their exposure, perspective, and outlook of digital assets. The same survey also showed that 40% have exposure to cryptocurrencies.

57% believe that positive news such as institutional investing drove the price higher. In February, major companies threw their weight behind bitcoin, including Tesla and MasterCard, while the token saw renewed backing from MicroStrategy.

Looking ahead, 34% of the respondents believe the greatest hurdle in allocating money to digital assets is regulation, while 24% see the lack of well-regulated and investible assets as the greatest obstacle.

US treasury Secretary Janet Yellen has been vocal about her criticism of bitcoin, saying it has been as a tool to “launder the profits of online drug traffickers.” The former Federal Reserve chief has also cast doubt on the utility of bitcoin as a form of payment.

On March 1, it was reported that Goldman Sachs Group restarted its cryptocurrency trading desk amid a boom in bitcoin. The desk, Reuters reported, will be part of the bank’s efforts to keep up with the rapidly evolving digital assets sector. 

Bitcoin in February cracked the $1 trillion dollar market capitalization threshold and jumped to $58,640, its highest record to date. Bitcoin has risen 63% year-to-date.

Bitcoin traded lower by 3% on Friday, at $47,516.

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Trading of first bitcoin ETF slows in Canada after a roaring debut for the groundbreaking fund

A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph
A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course’s graph

  • The Purpose Bitcoin ETF during its first two days of trading saw nearly $400 million of shares change hands. 
  • But on Tuesday, Bloomberg reported the amount slumped to just $17 million. 
  • Buzz has also quieted down around Evolve Fund Group’s Bitcoin ETF, which launched a day after BTCC. 
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Just a few weeks after the first exchange-traded fund in North America made a roaring debut, the excitement looks to be waning. 

The Purpose Bitcoin ETF, which trades under the ticker BTCC, on Tuesday saw $17 million shares change hands, according to Bloomberg. That is compared to its first two days of trading, which saw $400 million of shares traded. 

In total, the long-awaited ETF has attracted over $500 million in assets. However, the recent steep decline may suggest the fluctuating levels of interest in bitcoin, which many view as a hedge against inflation.

“The initial surge in interest was evidence of some combination of pent-up demand, investors switching from other means of getting bitcoin exposure, and the fact that bitcoin’s price was notching new highs as the Purpose ETF began trading,” Ben Johnson, Morningstar’s global director of ETF research, told Bloomberg. “Longer term, I expect volumes will be correlated with bitcoin’s price.”

Buzz has quieted down around as well for Evolve Fund Group’s Bitcoin ETF (ticker EBIT), which launched a day after BTCC. Around $3 million shares traded on Tuesday, far less than the $15 million right after its release, according to Bloomberg.

Bitcoin had an epic run in February, touching the $1 trillion market capitalization mark and breaching the $58,000-level.

“This is a great time to be in crypto. We are seeing genuine adoption of this amazing technology, said Bitfinex CTO Paolo Ardoino. “If you look back at 2017 the capacity of the network was nowhere near what it is now.”

In the US, CBOE Global Markets filed with the Securities and Exchange Commission on Monday seeking approval to list shares of VanEck’s bitcoin ETF. It is among the latest attempt to launch a bitcoin ETF in the US.

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CBOE files for approval to list the first US bitcoin ETF

Bitcoin
Bitcoin.

CBOE Global Markets has filed a request with the US Securities and Exchange Commission seeking approval to list shares of asset manager VanEck’s bitcoin exchange-traded fund, in the latest attempt to launch a bitcoin ETF in the US. 

CBOE on Monday filed a Form 19b-4 seeking permission to list and trade shares of the VanEck Bitcoin Trust. The filing builds on Van Eck’s earlier S-1 filing from December 30. VanEck also filed a proposal in September 2019, which it withdrew.

The form signifies the beginning of the formal review process, which could result in the first US bitcoin ETF. If approved, VanEck’s fund will also be CBOE’s first cryptocurrency product since the exchange holding company halted offering bitcoin futures in February 2019. CBOE in December 2017 was the first regulated financial institution to offer bitcoin futures contracts in the US.

Once the regulator announces that it is reviewing the application, the first 45-day timeline begins, in which the SEC is mandated to either approve or reject the application. It can also extend the review period for up to 240 days.

The SEC in the past has rejected numerous applications for bitcoin ETFs. The CBOE in its filing highlighted the advantages of a bitcoin fund, especially for retail traders.

“Exposure to bitcoin through an ETP [exchange-traded product] also presents certain advantages for retail investors compared to buying spot bitcoin directly. The most notable advantage is the use of the Custodian to custody the Trust’s bitcoin assets.” It did not disclose the name of the custodian.

In North America, two bitcoin ETFs have been approved by Canada, with The Purpose Bitcoin ETF beginning trading last month.

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Bitcoin could be like the FAANG stocks for the next decade – but it will take more than the buy-in of the retail army to get it there, an investment chief says

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“It’s going to require institutional capital.”

  • Bitcoin could become the next “great tech stock” of the coming decade, an investment chief said.
  • But only retail traders buying into the coin won’t be enough, according to Skybridge’s Brett Messing.
  • “It’s going to require institutional capital,” he said. “Retail can’t get it there.” 
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Bitcoin could become what Tesla, Facebook, and Google were for the last decade, according to Brett Messing, partner and chief operating officer at Skybridge Capital.

The investment chief explained that just like three of those tech stocks were some forms of networks, bitcoin too is a monetary network. 

“Bitcoin is actually going to be the great tech stock over the next decade, in addition to being digital gold,” Messing said at a virtual roundtable discussion this week.

According to him, there are two potential outcomes for the digital token in the near future: either it could remain a niche asset and trade between $5,000 and $50,000, or it could grow to be a “real asset” that could easily hit as much as $500,000. 

But in order for it to get to even a quarter of that level, “it’s going to require institutional capital,” he said. “Retail can’t get it there.” 

Bitcoin was last trading at $$32,129 on Friday, almost $10,000 lower than its record high of $41,000 earlier this month.

“It’s now a $600 billion asset class. I think it is arguably beyond the point at which it can be manipulated, and I think as it matures, that will become increasingly the case.”

SkyBridge Capital, run by hedge fund manager Anthony Scaramucci, invested $25 million into a bitcoin-focused fund that went live on January 4.  The “SkyBridge Bitcoin Fund” was launched so that the fund got in before bitcoin’s price soars even higher.

The firm’s flagship fund is a $7 billion Registered Investment Advisor (RIA), but for the purpose of managing the bitcoin fund, it isn’t acting as one. “By doing that, we don’t have to satisfy what’s called a custody rule under the Advisers Act,” Messing said, referring to the issue of custody service by hedge funds who hold large amounts of cryptocurrency.

But he expects Gary Gensler, President Joe Biden’s pick to run the US SEC, to be “very bitcoin-friendly,” and that one of his first acts will be to provide clarity on the custody role.

In terms of risks to bitcoin, government regulation is by far the biggest. Just like it is for technology companies.

Messing said: “If you talk to… what is Mark Zuckerberg worried about? What is Jeff Bezos worried about? The thing they worry about the most is the government, and that’s the first concern.”

A breakdown in infrastructure is another point of concern since bitcoin makes big moves everyday on exchanges that could falter.

Lastly, there could be a greater risk that no one is prepared for.

“We’re trying to be crypto-hip, but whoever knew that we’d be sitting here in a pandemic on Zoom?” said Messing. “No one predicted this. I imagine the risk for Bitcoin is one that none of us are going to identify.”

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