Your Weekly Update On All Things Crypto |
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State Street is Planning to Go Crypto With Pure Digital |
Last week, State Street, the second oldest bank in the United States, with a total of $3.47 trillion in assets under management (AUM), announced that it plans to collaborate with Pure Digital to launch a cryptocurrency trading platform.
The announcement came from Puremarkets Ltd (Pure Digital), a company that State Street’s trading technology arm Currenex has partnered with to create a wholesale multi-custodial digital currency trading platform. the announcement explained, "Pure Digital will be a fully automated, high throughput OTC market for digital assets and cryptocurrencies with physical delivery and bank custody."
According to David Newns, Global Head of Execution Services for State Street Global Markets, Currenex is currently leveraging its experience and expertise in the FX and digital assets trading marketplace to equip Pure Digital with a robust technological foundation for its digital currency trading initiative.
Yet, when it comes to the possibility of State Street itself exploring the initiative to advance its crypto trading capabilities, the bank has not issued any ‘statement of commitment’ as of yet. Although Lauren Kiley, the CEO of Pure Digital, believes that State Street should be among the many banks choosing their platform soon. Pure Digital expects the collaboration to happen during mid-2021.
While the 2017 crypto bull run had retail users as its driving force, the current explosion in the crypto market is institution-driven. Among big banks, BNY Mellon, Goldman Sachs have already started to make their moves. All eyes are now on State Street as it is one of the largest custody providers and trading operations players in the US.
Lauren Kiley says that their ultimate objective is to transpose FX infrastructure to the crypto space through a bank-led consortium complemented with a platform that will include FX-industry standard APIs and the best execution features.
As a first-of-its-kind trading platform offering a wholesale interbank market for Tier 1 investment banks to trade bitcoin and other digital assets, Pure Digital will facilitate its institutional participants to utilize bilateral credit. It will lead to more efficient capital utilization and greater control for the participating banks.
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Coinbase Releases Monster 1st Quarter Earnings |
Last week, Silicon Valley darling, Coinbase, published their first-quarter 2021 earnings and the numbers blew all analyst predictions out of the water. The crypto exchange and custodian earned a total revenue of nearly $1.8 billion in Q1, 2021. With 56 million verified users and 6.1 million monthly transacting users, Coinbase dwarfs any other retail trading platform on the market. With $223 billion worth of assets on the platform, Coinbase's assets under management (AUM) represent roughly 11.3% of the total crypto market.
Out of this $223 billion, over half ($122 billion) is from the institutions. With a total trading volume of $335 billion, the net income of Coinbase falls anywhere between $700 million and $800 million. The adjusted EBITDA of the platform hovers around $1.1 billion for the single quarter.
The transaction revenue of Coinbase directly correlates with its MTUs, or monthly transacting users, retail users who actively or passively transact in one or more products on the Coinbase platform at least once during the rolling 28-day period ending on the date of measurement.
With its Q1 2021 numbers as a foundation, Coinbase expects its annual average MTU numbers for the entire year to be between 4.0 and 7.0 million.
When it comes to the revenue earned by Coinbase in Q1, what does it mean to register more than its yearly revenue in a single quarter? As the industry experts believe, this massive jump in Coinbase’s revenue brings a solid opportunity for the entire crypto market to explore.
Coinbase is about to go public, a listing that has been widely anticipated by the entire investment industry. Registering such performance just before its IPO, Coinbase could entice an increased volume of investors and drive up its stock value. But, the opportunity is even wider for the crypto industry at large.
Although the crypto market is still a volatile area to predict for the long run and much of its growth stems from the single asset Bitcoin alone, the scope of high returns, even for a shorter interval, is something that allures a wide range of investors. In that sense, Coinbase could well become the trojan horse for the industry to bring an altogether new class of high-return-seeking investors into crypto.
The company anticipates its future revenue scenarios to swing between periods of high profits, when it will be building up its balance sheet, and the so-called "crypto winters" when prices will be down, prompting Coinbase to continue investing in longer-term areas.
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Cryptocurrency 'Hedge Fund' Investing App Nabs $5.3M in Seed Funding Round |
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Ember Fund, a non-custodial cryptocurrency investing app, announced a $5.3 million seed-funding round last Wednesday. The round was led by Richard Jun of Bam Ventures, who was recently brought on as an advisor, and included Anthos Capital, Uncorrelated Ventures, Calm Ventures. These are some of the same early backers of Honey ($4B exit to Paypal), Headspace, Compound, MakerDao, UMA, Cosmos, dYdX and more.
Since it's launch in 2019, Ember Fund has been 'on a mission to fundamentally transform what investment products people have access to on a global scale'. It is a mobile app that allows both retail and institutional users to "invest like a cryptocurrency hedge fund", buying into a professionally managed curated funds. It is the first of it's time and has the likes of Nicholas Merten (DataDash), Marius Kramer, and Eric Ervin as fund managers. Ember is non-custodial and features low minimums, a 'one-tap' user friendly interface and more. Currently, it has processed over 500,000 transactions and more than 50,000 users.
With the proceeds, Ember plans to "heavily" invest into it's infrastructure and "aggressively grow" its assets under management (AUM), says co-founder and CEO Alex Wang. Ember is aiming to hit $1 billion in AUM next year. The company will also look to expand it's team, which is currently only 14. They are looking to hire engineers, support staff, a research analysts and a CIO.
Additionally, Ember is set to launch Securities and Exchange Commision (SEC) registered token offering in a matter of months. The company already held a crowdfunding sale last year, in which is raised $700,000. If you interested in participating, we suggest you mark the date in your calendar and follow their blog for updates.
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Bitcoin Technicals Suggests Breakout Imminent |
Bitcoin's price action has looked incredibly bullish over the past three weeks, consistently setting in higher lows and repeatedly testing its significant all-time high level around 60K. Bitcoin's price has been within 10% of its all-time high now for over 16 days, and every time we test that line of resistance, the resistance grows weaker and weaker. We are now nearing the end of the ascending triangle that has been forming since early February and if the technical pattern holds true, the only way to break out from here is to the upside. We expect a large rally for Bitcoin this week as institutional buyers continue to flood into the cryptocurrency space at an unprecedented rate. A sudden spike in Bitcoin prices may temporarily cause alt-coin liquidity to flow back into the king coin, but we expect the short-term alt-coin consolidation to be followed by more explosive growth.
See the trading-view chart here.
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Alt-Coin Dominance Continues to Surge |
After the breakout of the ascending triangle that we predicted last week, alt-coin dominance has continued to surge as Bitcoin prices hover near all-time highs. Last week we broke through a key horizontal level of resistance at 43% dominance. We are now charting into ranges we haven't seen since April of 2019. The all-time high alt-coin dominance is just under 65%. If we continue to chart upward trajectory and maintain the ascending (green) line of resistance, our analysis shows that we may reach those highs around October of this year. That said, with all the new capital flowing into the crypto markets, and the myriad of new projects building game-changing technologies in the space, we think this market cycle could surpass previous all-time highs as it relates to alt-coin dominance.
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Chainlink is the leading oracle solution in the cryptocurrency space. An oracle is a mechanism that can bring real-world data, on-chain. It is the hallmark application that initiated a Cambrian explosion of decentralized finance applications and will be crucial in building out future applications in the blockchain space such as insurance, betting markets, and news verification services.
After charting one of the largest rallies in the cryptocurrency space in early 2020, Chainlink's price performance has been lackluster since August of last year. However, LINK has finally broken through a key line of resistance against Bitcoin and is now looking likely for another sustained rally.
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Algorand builds technology that accelerates the convergence between decentralized and traditional finance by enabling the simple creation of next-generation financial products, protocols, and exchange of value.
The project is lead by Turing Award winner, Silvio Micali and is founded on rigorous scientific research and technical development.
ALGO has flown largely under the radar as larger protocols like Ethereum, Cardano, and Polkadot have taken the spotlight, however price is finally starting to rally and given the relatively low valuation versus Bitcoin, Algorand still has plenty of room to grow.
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We at CryptoWeekly are not Financial Advisors. None of the content or opinions expressed in this newsletter should be considered financial advice. We highly recommend that you do your own research before investing in any project within or outside the cryptocurrency space. |
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