2024-01-26 16:01

Analyst Own Lau noted higher trading volume, the recent approval of the spot bitcoin ETFs, and a potential win in the company’s lawsuit against the SEC as the main drivers for the upgrade. Shares of Coinbase (COIN) rose as much as 6% on Friday after investment bank Oppenheimer raised the rating of the stock to “outperform” from “perform” with a price target of $160 per share, arguing that the company is strong and its management team is tough. "The stock was under extreme scrutiny during crypto winter. While many peers went under, COIN is still standing and fighting for its businesses and the industry. We believe the company is stronger than many people realize, and the management team is tougher than most investors think," analyst Owen Lau wrote in a note. The upgrade is based on multiple factors, including a “good chance” that Coinbase will win its lawsuit against the Securities and Exchange Commission (SEC) or that the court will dismiss the case. Another driving force is the recent approval of ten spot bitcoin exchange-traded funds (ETFs) for which Coinbase serves as a custodian for several issuers. This will not only bring the company revenue by being a key part of the infrastructure but will benefit from the new wave of investors, increasing adoption and higher trading volume, Lau said. The upgrade comes after JPMorgan downgraded the stock earlier this week to an underweight rating, citing a disappointing bitcoin ETF catalyst. With the current low fees for trading the ETFs – some at 0% for the first six months or until the fund reaches a certain amount of assets – investors trading on crypto exchanges could be swayed to put their money in the ETFs instead of trading on platforms such as Coinbase, but Lau doesn’t see that happening. Instead, he said that the vast majority of retail traders will likely keep their money on the exchange as it allows them to engage in other blockchain use cases. Lau also noted the higher trading volume that Coinbase has seen since the start of the year and predicts that volume will continue to increase over the next two years as the Federal Reserve is looking to cut interest rates this year and as the industry is awaiting the bitcoin halving in April. Trading volume could increase as much as 66% year-over-year, Lau said. Shares of Coinbase rose more than 400% last year, driven by a broader crypto market recovery after a tumultuous 2022. The stock is down more than 20% this year, underperforming the broader crypto market. The CoinDesk 20 index, a benchmark that tracks the 20 largest crypto assets, shows a decline of roughly 11% year-to-date. However, for the year ahead, Lau sees a good chance that Coinbase could become a profitable company for the first time since the fourth quarter of 2021, as he estimates 25% growth year-over-year. https://www.coindesk.com/business/2024/01/26/coinbase-upgraded-by-oppenheimer-as-crypto-exchange-stronger-than-many-people-realize/

2024-01-26 10:29

ARKW now holds $91.4 million of ARKB, constituting a 5.98% weighting of the fund's total value ARK Invest continued to offload shares of ProShares Bitcoin Trust ETF (BITO) in the last week while accumulating its own spot bitcoin exchange-traded fund. Cathie Wood's investment firm sold a total of 2,226,191 shares of the bitcoin futures ETF since Jan. 19, worth around $42.8 million at Thursday's closing price of $19.22, from its Next Generation Internet ETF (ARKW). Meanwhile, it has bought 1,563,619 shares in the ARK 21 Shares Bitcoin ETF (ARKB), worth approximately $62.3 million. ARKB closed on Thursday at $39.87, up a negligible 0.68% on the day. ARK held BITO as a short-term play having offloaded its shares of the Grayscale Bitcoin Trust (GBTC) late last year, in anticipation of approval of spot bitcoin ETFs in the U.S., with plans to swap BITO for a spot bitcoin ETF once the approval came. ARKW now holds $91.4 million of ARKB, constituting a 5.98% weighting of the fund's total value. Its BITO shares now number just 366,128 at a value of $7 million, a 0.46% weighting. Read More: Bitcoin ETF Flows Show Negative Trend For First Time Since Launch https://www.coindesk.com/markets/2024/01/26/ark-bought-623m-worth-of-own-etf-in-last-week-sold-427m-of-bito/

2024-01-25 22:57

A standalone blockchain, Celo is looking to migrate to become a layer-2 network atop Ethereum. The months-long selection process has started to look like "The Bachelorette," with teams behind the Arbitrum, Optimism, Polygon and zkSync networks all vying to win the technology mandate. The time has come to put the cards on the table. For the past couple months, developers behind the Celo blockchain have been evaluating technical proposals from teams who might provide technology as the project migrates to become a new layer-2 network atop Ethereum. Vying for the mandate are some of the biggest players in the blockchain industry, standing behind the most prominent layer-2 networks in existence: Optimism, Polygon, zkSync, Arbitrum, all of them eager to share technological blueprints with new chain builders in hopes of attracting more critical mass to their mini-ecosystems and software offerings known as "stacks." In a blog post on Thursday, Tim Moreton, CEO of cLabs, the leading developer behind Celo, wrote that "as we wrap up the technical evaluations, we’re moving to evaluating the non-technical dimensions described in the framework." Translation? Let's talk terms. "This is different to evaluating published software," Moreton wrote. "It’s harder to predict exactly how quickly we’ll be able to conclude this, especially as the candidate stacks are actively assembling their economic terms and incentive programs." The details of terms like revenue sharing can be key factors for builders of new layer-2 networks. Arbitrum, the biggest layer-2 network in terms of TVL, disclosed last week that users of its "Expansion Program" must "promptly transfer 10% of the protocol net revenue" to the Arbitrum Foundation, under the terms of use. Moreton didn't provide a specific timeline for when a final recommendation might come about, writing, "We're working as fast as we can to get a comprehensive proposal that we feel confident proposing." Blockchain's version of "The Bachelorette" Celo is a lesser blockchain, ranked 26th based on the crucial metric of total value locked, or TVL, at $116 million; for comparison, No. 1 Ethereum has $30.6 billion. But with the big Ethereum layer-2 networks racing to establish themselves as early leaders in the fast-moving space, their pursuit of Celo has taken on an outsize marketing significance – a beauty pageant of sorts, the blockchain industry's version of The Bachelorette. "Each of the candidate projects are awesome achievements with strong roadmaps backed by strong teams and communities, and are each moving fast," Moreton wrote. "We’re trying to find the best stack for Celo’s needs, not the best stack." One thing that stands out from Moreton's post is just how hard the various teams appear to be working to land Celo, supplying test networks, hands-on technical assistance and access to top executives. Optimism developers provided the cLabs team with an "internal OP Stack-based testnet, which has helped the team become very familiar with the codebase,” Moreton said. Polygon executives have provided "deep technical expertise" along with two testnets. Alex Gluchowski, co-founder of Matter Labs, a developer behind the zkSync project, joined a Celo community call and wrote an "insightful post, providing his take on the exercise of applying the suggested framework to the zkSync Stack & zkSync," according to Moreton. "The zkSync team have been a pleasure to collaborate with," he wrote. "They demonstrated remarkable proactivity, organizing meetings, sharing their 2024 roadmap and engaging in detailed technical discussions with our engineers." Regarding Arbitrum, "we were able to gather a lot of info from public sources, documentation and running the stack locally," Moreton wrote, but "we also had the opportunity to pose questions to the Arbitrum team in our shared chats and calls." https://www.coindesk.com/tech/2024/01/25/celo-shopping-for-blockchain-partner-turns-to-the-delicate-issue-of-money/

2024-01-25 20:42

Outflows at Grayscale’s GBTC have remained high while inflows for the other funds as a group have slowed. The group of recently launched spot bitcoin exchange-traded funds (ETFs) are seeing combined negative flows for the first time since they opened for trade on Jan. 11 as money moving into funds like BlackRock's IBIT and Fidelity's FBTC has failed to keep pace with the exits from Grayscale’s GBTC. According to data collected by Bloomberg Intelligence analyst James Seyffart, the 10 spot bitcoin ETFs (GBTC included) saw a net outflow of $158 million on Wednesday. Day-to-day flows can, of course, be mercurial. Numbers compiled by CoinDesk from the issuers' websites shows total bitcoin held by all of the spot ETFs (GBTC included) as of Jan. 24 of about 649,000 versus more than 660,000 a week earlier, a decline of roughly 11,000 tokens. The only fund that saw actual negative flows over the week was GBTC, which saw its total bitcoin in trust fall to 523,516 from 592,098. Among the other nine funds, BlackRock’s IBIT and Fidelity’s FBTC are leading the way, with each now holding more than 40,000 bitcoin as of Jan. 24 versus 20,000-25,000 for each one week ago. Both are also closing in on $2 billion in assets under management. However, inflows for both funds have slowed over the past several days. BlackRock, for example, added just 1,663 tokens on Jan. 24, its weakest daily addition since opening for business, and down from 8,705 on Jan. 17. Despite the slowdown over the last week, net inflows the 10 spot ETFs opened for business on Jan. 11 remain sizable. Seyffart's Bloomberg colleague Eric Balchunas calculated total dollar inflows of $824 million since launch, which translates into a net bitcoin addition of about 17,000-20,000 tokens. https://www.coindesk.com/markets/2024/01/25/bitcoin-etf-flows-show-negative-trend-for-first-time-since-launch/

2024-01-25 17:22

Grayscale and BlackRock are among the companies trying to bring spot ether ETFs to market. The U.S. Securities and Exchange Commission delayed an application by Grayscale Investments to convert its Ethereum trust product (ETHE) into an exchange-traded fund (ETF). One day earlier, the agency did the same regarding BlackRock's application for a similar vehicle. The SEC has traditionally opposed spot crypto ETF products, only allowing a flurry of spot bitcoin ETFs to go live in the U.S. for the first time earlier in January. Thursday's delay of any decision on Grayscale's application is unsurprising, as is its delay of the BlackRock bid. In the run-up to the SEC approving spot bitcoin ETF applications, issuers and exchanges began filing updated documents addressing various questions from the regulator. It's unclear whether the spot ethereum ETF applications have progressed to this stage. However, this week's filings pose a number of questions for the general public to weigh in on, including one about whether a spot ethereum ETF might be similar to a spot bitcoin ETF. "Do commenters agree that arguments to support the listing of Bitcoin ETPs apply equally to the Shares," the filing asked. "Are there particular features related to ETH and its ecosystem, including its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities, that raise unique concerns about ETH’s susceptibility to fraud and manipulation?" Other questions focus on market manipulation, whether spot and futures markets are correlated and whether the CME futures market is of significant size – similar questions to those the SEC has asked about bitcoin when reviewing those applications. https://www.coindesk.com/policy/2024/01/25/spot-ether-etf-applications-decisions-delayed-by-sec/

2024-01-25 17:17

Around $1.3 billion has shifted from GBTC to new spot bitcoin ETFs, equivalent to a monthly outflow of about $3 billion per month, the bank said in a report. Selling pressure in bitcoin (BTC), the world’s largest cryptocurrency, from investors taking profits in crypto investment vehicle, the Grayscale Bitcoin Trust (GBTC), may be largely over, JPMorgan (JPM) said in a research report on Thursday. The bank notes that bitcoin has dropped over 20% in the two weeks following the launch of spot bitcoin exchange-traded funds (ETFs) in the U.S., and said profit-taking in GBTC by investors who had bought the fund at a discount was a main driver behind the correction. Before its conversion to an ETF, GBTC was one of the few ways for investors in the U.S. to gain exposure to bitcoin without owning the underlying cryptocurrency. It's still the largest bitcoin investment product with over $20 billion in assets under management. JPMorgan had previously estimated an outflow of around $3 billion from GBTC due to profit taking from the ‘discount to net asset value’ (NAV) trade. These flows are significant, as when investors take profits on this trade, money leaves the crypto market, putting downward pressure on bitcoin’s price. “Given $4.3b has come out already from GBTC, we conclude that GBTC profit taking has largely happened already,” analysts led by Nikolaos Panigirtzoglou wrote, adding that “this would imply that most of the downward pressure on bitcoin from that channel should be largely behind us.” The bank’s estimates imply that about $1.3 billion has moved from GBTC to newly created spot bitcoin ETFs, which are cheaper. This is equivalent to a monthly outflow of $3 billion. These outflows are likely to continue if Grayscale is too slow to lower its fees and could even accelerate if other spot ETFs “reach critical mass to start competing with GBTC in terms of size and liquidity,” the report added. Crypto exchange FTX’s bankruptcy estate also dumped around $1 billion worth of GBTC since its conversion to an ETF, resulting in added selling pressure on the underlying digital asset, a CoinDesk report showed. https://www.coindesk.com/markets/2024/01/25/grayscales-gbtc-profit-taking-likely-over-easing-bitcoin-selling-pressure-jpmorgan/