BitDigest April 14 · Issue #880

Apr 14, 2021
  • Bitcoin and ether hit new highs driving crypto marketcao above $2.2 trillion as the market awaits Coinbase’s Nasdaq listing
  • Crypto Mom issues update to proposed Token Safe Harbor Proposal 
  • Republican House Leader says idea that you can ignore digital currencies and they will go away has not worked

Happy Coinbase Listing Day!

Having spent the majority of my time (including many early mornings) over the past several years focusing on the digital currency ecosystem has been an incredible experience. It has been both exciting and gut wrenching, but as many of us remember, the first years were the hardest. We had already fallen down the proverbial rabbit hole and believed we were working to help drive a financial and technological breakthrough but we encountered constant resistance along the way.

Last night I was thinking about a story about my Father (my apologies if I have written about this before.) In 1958, my Father was one of the first people to receive an American Express card. Back then it was actually a paper card but he has recounted his experience of showing a piece of paper with his name and a multi-digit account number printed on it to his Father and explaining how this card would allow him to pay for dinners and travel without the use of cash. My Grandfather could not understand what my father was trying to explain and kept telling him that no one would accept his paper card and that he would always need to pay with real money.

This was probably a similar conversation to what I encountered with my Father when I told him I was interested in a digital money that had been developed by an unknown man called Satoshi Nakamoto and was not backed by any government or company. How will people use and accept it if you cannot actually touch it and how does it get its value he asked.

Digital Currency Group CEO Barry Silbert often speaks about the 5 phases people go through when learning about cryptocurrencies: dismissive, skeptical, curious, believer and evangelist. As a reader of BitDigest, it is difficult to see how people can still be dismissive about digital currencies. Look no further than the ongoing developments in China, the EU and the US, digital currencies are here. Many people are still skeptical, but I think the curiosity stage is gaining the most support today especially as bitcoin reaches a new milestone with Coinbase’s direct listing.

What started as a way for crypto investors to buy and sell digital currencies has evolved into a globally regulated exchange that is expected to open with a greater marketcap than Nasdaq, the Deutsche Bourse, London Stock Exchange, or Intercontinental Exchange. Over the past 9 years, Coinbase CEO Brian Armstong and the team have gone from an idea to building a multi-billion dollar financial services company allowing investors to trade and custody digital currencies in a manner similar to online trading of stocks.

Congratulations and thanks to the team at Coinbase. Not only will today provide a great financial reward to management, investors and employees of the company, today is bringing further credibility to the crypto cause and will held drive us into the next ‘believer’ stage.  We should all celebrate today!

If you would like to learn about the history Coinbase, I recommend reading “King of Crypto: One Startup’s Quest to Take Cryptocurrency out of Silicon Valley and onto Wall Street” by Jeff John Roberts.

By the way it took American Express another 19 years after issuing the first credit card to my Father for the company to go public.

Pre Market Opening Update: COIN

Ahead of the direct listing Coinbase provided an update regarding the total number of shares to be listed (130.7 million) and that the 68.5 million shares of Class B common stock would be “convertible, at any time, at the option of the holder, into one share of Class A common stock.”

Nasdaq released notice that the reference price for Coinbase’s direct listing (COIN) is $250. As the notice states “the reference price is NOT an offering price and nobody has purchased or sold shares at that price. The opening public price will be determined based on buy and sell orders in the opening auction on Nasdaq.”

Given the establishment of the reference price, everyone is asking where COIN will open. This is the billion dollar question.

CNBC is reporting that the opening price on the five most significant direct listings –( Spotify (NYSE:SPOT), Slack (NYSE: WORK), Palantir (NYSE: PLTR), Asana (NYSE: ASAN) and Roblox (NYSE: RBLX)—was on average about 37% above the reference price signifying an opening price around $343, very close to the average private market price in the first quarter of $343.58

Several people I spoke with suggested an opening price closer to $600 and FTX pricing for Coinbase future contracts is trading at $581 this morning (6:51 AM) so this figure may be more accurate.

The market will be watching and I can assure you the COIN listing will be a leading headline in this afternoon and evenings newscasts. I am excited to watch and celebrate.

The Headlines

BitDigest April 14 · Issue #880

Crypto Mom Releases Token Safe Harbor Proposal 2.0

www.sec.gov
SEC Commissioner Hester Peirce issued an updated release of her Token Safe Harbor Proposal providing developers with a three-year grace period within which, under certain conditions, they can facilitate participation in and the development of a functional or decentralized network, exempted from the registration provisions of the federal securities laws. She is recommending that semi-annual updates be provided to enhance token purchaser protection, and an exit report requirement at the end of the three-year period to provide greater project clarity which should include “guidance on what outside counsel’s analysis should address when explaining why the network is decentralized.”
BitDigest April 14 · Issue #880

Republican Leader Says Government Cannot Ignore Digital Currencies

www.twitter.com
🐦📺Republican House Leader Kevin Mc McCarthy (R-CA) says government leaders have failed to ignore digital currencies in hopes that it would go away and sees digital currencies “moving towards the future…and the basis is going to continue to grow…[so therefore] those who are in government that make policy better start understanding what it means for the future.“
BitDigest April 14 · Issue #880

IRS Looking to Crypto Investors to Pay More Taxes

www.marketwatch.com
Commissioner Charles Rettig says the Internal Revenue Service is being “out-gunned,” likely missing out on collecting $1 trillion in annual tax revenues, and sees bitcoin as part of the problem.
BitDigest April 14 · Issue #880

India’s Working to Protect Investors From Crypto Volatility

www.decrypt.co
India’s finance minister says that his government efforts to oversee digital currencies is intended to protect investors against crypto’s historic volatility.
BitDigest April 14 · Issue #880

EBON Responds to Short Seller Report

www.globenewswire.com
Ebang International (NASDAQ: EBON) issued a public response to the claims in the short seller report by Hindenburg Research stating that proceeds from the IPO and other company funds were not managed through “opaque” dealings with insiders; the company has no dealings with Yindou as stipulated in the report’ the company remains committed to designing and manufacturing bitcoin miners; the company did not purchase a white label exchange solution and in fact developed its own software and technology to power its new exchange; and, they did not participate in artificially inflating trading volumes on the new exchange.

Market Data

BitDigest April 14 · Issue #880

ECB Releases Citizen's Expectations on Digital Euro

www.reuters.com
✅A survey released by the European Central Bank reveals that euro-zone citizens expect the European Central Bank’s proposed digital currency to be private (43%), secure (18%), usable across the euro area (11%), less expensive (9%) and usable offline (8%).
BitDigest April 14 · Issue #880

First North America Bitcoin ETF Breaks $1 Billion AUM Barrier

www.purposeinvest.com
📈Purpose Investment’s bitcoin ETF (TSXL BTCC.U), the first North American bitcoin exchange traded fund (ETF), announced that the ETF celebrated its one-month fund anniversary by hitting AUM of $1 billion (CAD $1.25 billion). 🍾
BitDigest April 14 · Issue #880

Grayscale AUM Hits $50 Billion

www.twitter.com
🐦📈Following yesterday’s US market close, Grayscale Investments announced that AUM had reached $49.2 billion. Based on this morning’s market pricing, Grayscale has broken the $50 billion ceiling – another reason to celebrate the crypto industry today and an incredible feat by the leading digital currency asset manager. 🎉🥳
BitDigest April 14 · Issue #880

BofA Survey Says Bitcoin Is a Bubble

www.u.today
✅Bank of America’s April’s survey of fund managers finds that 74% of respondents believe bitcoin is a bubble.
BitDigest April 14 · Issue #880

Bitcoin Power Consumption Jumped 66x Since 2015

www.bloomberg.com
Citi researchers report that bitcoin mining is consuming 66 times more electricity than it did back in late 2015, and the carbon emissions associated with it will likely face greater scrutiny.

Exchange, Custody and Product News

BitDigest April 14 · Issue #880

Binance Listing Coinbase Stock Token

www.binance.com
Days after announcing the addition of fractionalized stock-tokens, Coinbase’s largest competitor, Binance announced plans to list the Coinbase Stock Token (COIN) as a trading pair against its native digital currency Binance Coin (BNB).

Thoughts on the Ecosystem

BitDigest April 14 · Issue #880

Bitcoin's Use in Illicit Activity is Overstated

www.cryptoforinnovation.org
Former acting director of the Central Intelligence Agency Michael Morell issued a report suggesting that generalizations about bitcoin’s use in illicit finance are overstated and “most likely less” than the traditional banking system, and that blockchain analysis is a “boom for surveillance” and a “powerful but underutilized forensic tool for governments to identify illicit activity.”
BitDigest April 14 · Issue #880

Digital Wallets Will Follow EVs as One of the Next Big Disruptive Trends

www.cnbc.com
Ark Invest’s CEO Cathie Wood says that digital wallets are one of the next major digital trends explain that the digital wallets are effectively “a little bank branch in your pocket…two-sided market places, merchants and consumers…[and] are going to usurp a lot of the role the banks play today.

Reports you may have missed

Crypto markets are declining following news that most of the SEC’s lawsuit against Coinbase will proceed (more below). BTC (-1.27%) reached intraday highs of $71.8k before declining to $69k after the news. Rumors have circulated that Morgan Stanley and PNC will soon approve access to Bitcoin ETFs on their wealth management platforms. Together, Morgan Stanley and PNC hold over $1.5 trillion in client assets and likely will provide a tailwind...

Following the worst week of ETF flows since inception, BTC (+3.89%) is rebounding, rising to $69.6k, and ETH (+4.09%) has reclaimed the $3,500 mark. Last week’s outflows totaled $888 million, representing about a fifth of the inflows seen in the previous two weeks. ONDO, an institutional RWA protocol, is one of the top performers today, rising 7.61% as investors remain optimistic about the future of tokenized assets and their ability...

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