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August 2, 2022

coinbase invest all profits in crypto

Here’s how 10 popular ICOs have performed against BTC after being listed. [Mish Comment: Chart 4 Below]

  • As you can see, every single one of these ICOs have underperformed BTC since they were listed on Coinbase. A majority of these hyped ICO tokens are deeply negative against BTC, with an average drawdown of -58%. And yet, Coinbase still rarely markets BTC to clients…weird.
  • Next was the DeFi craze. Coinbase was quick to list & market these tokens despite the heightened operational, security, and regulatory risks that came with them. SBF was on a recent podcast explaining what DeFi was, and it led Bloomberg Journalist Matt Levine to respond with. [Mish Comment: Chart 5 Below]
  • Here’s how these DeFi coins have performed against BTC since being listed on Coinbase. After being heavily pushed on their clients, these DeFi tokens are completely rekt against BTC.

    • If Bitcoin is always in the first place, then Ethereum is always in second place in the crypto sphere. The market capitalization of Ethereum is currently over $560 billion.

    The Ethereum system came in 2015 as an open-source software based on the blockchain, and Ethereum is the digital currency that empowers the whole system.

    This year, the price of Ethereum has increased by more than 500% and has even broken the record. Investors believe that Ethereum will be the key to the decentralized finance sector including smart contracts, NFTs, and the next expected big thing: Metaverse.

    The Ethereum system was created to extend the functionality of blockchain technology away from Bitcoin so that the underlying technology offers wider applications than just a virtual currency.

    Unlike Bitcoin, Ethereum’s supply is unlimited.

    Contents:

    Coinbase invest all profits in crypto

    The first was to invest $500 million of our cash and cash equivalents into crypto…And second, we’re allocating 10% of quarterly net income into crypto investments. We’ve invested upwards of $180 million year-to-date as measured at cost.”

    Coinbase has invested $540 million in Bitcoin, Ethereum, and other crypto-assets.

    The Race to Market

    From the very beginning, Bitcoin has been the coin of other coins. Coinmarketcap.com reported that Bitcoin currently has a market capitalization of around $1.246 trillion.

    The key difference between Bitcoin and traditional fiat currencies like the USD or Euro – all of which are under the control of a central bank, is that Bitcoin is totally decentralized.

    Many Bitcoin advocates refer to the virtual currency as a “store of value” – a status often attributed to traditional safe-haven investments like gold.

    Coinbase invest all profits in cryptocurrency

    The platform could also face new tax-reporting requirements under the roughly $1 trillion infrastructure bill in Congress.

    The exchange platform listed on the Nasdaq in mid-April and is roughly flat based on its $250 reference price established before its first trade and its $342 closing peak on April 16.

    Coinbase held a direct listing instead of a standard initial public offering, meaning that the company didn’t raise money through the process of going public and doesn’t have a traditional IPO price against which to measure the stock’s first-day rally.

    Earlier this month, Coinbase posted net revenue of $2 billion in the second quarter, up from $178 million a year earlier and $1.6 billion in the first quarter.

    Coinbase invest all profits in cryptography

    If a customer of Coinbase heeded their advice, they would have lost money on these sh*tcoins instead of simply saving in the less risky asset, Bitcoin, for the long term. [Mish Comment: Chart 1 Below]

  • Coinbase’s marketing is highly skewed towards sh*tcoins that are riskier and less secure than BTC. Their education around BTC is atrocious. They don’t want their clients buying and holding BTC cuz they want them to trade themselves into oblivion & collect those sweet tx fees.
  • It’s important to note that Coinbase also makes money off of listing fees. They constantly push the sh*tcoins they list on their unsuspecting clients who end up losing their life savings thinking they are buying the “next Bitcoin” Coinbase promoted LUNA.
  • In 2017, Coinbase had 4 coins outside of Bitcoin listed on their platform.

    Fast forward to today, and Coinbase offers 161 cryptocurrencies.

    • The subject came up again today.

    “Once Ethereum becomes proof of stake officially and risk is mostly eliminated ….“

    AND risk is mostly eliminated!?

    Sorry, that’s either ignorance or a lie. I see similar statements about Bitcoin all the time.

    Crypto beginnings

    Bitcoin launched in January of 2009. It has never seen any environment than endless Fed pumping, low interest rates, and extreme QE liquidity supporting all asset prices.

    Liquidity also explains the rise of hundreds if not thousands of altcoins, all inherently worthless.

    Even if we give Bitcoin and Ethereum first mover advantage, no one can possibly know how either will perform in an inflationary environment in which the Fed is hiking and for the first time stating an aggressive QT (Quantitative Tightening) policy.

    Top idea of the month: What needs to happen before stocks bottom?

    Please consider Top Idea of the Month: What Needs to Happen Before Stocks Bottom?

    History suggests markets bottom after the yield on the 10-year treasury note drops significantly.

    That has ominous implications for all asset classes, especially the riskiest of asset classes.

    And Bitcoin has generally been following the Nasdaq. There is no reason to believe that stops, nor any reason to believe we are close to a bottom in anything.

    Bitcoin margin calls, waterfall events, and people pretending to know the unknowable

    “You just don’t understand”.

    Crypto advocates certainly understand the inner workings of cryptos far better than me.

    Most ETH holders didn’t hold their ETH long term, but instead traded their holdings for other cryptos that were spawned on Ethereum during these various speculative crazes.

  • If Ethereum is, in the end, merely a platform for retail investors to lose money on other digital assets, I would expect its demand and price to eventually go the way of all things that don’t produce any real value for the world.
  • It’s important to understand what you own and don’t own when it comes to Bitcoin and the rest of the broader crypto industry. It’s about time we separate Bitcoin from other cryptos and call out the irresponsible, questionable marketing and coin listing practices of Coinbase.
  • What retail investors desperately need in today’s macroeconomic environment is a digital sound money that can’t be inflated or censored.

    • Ethereum’s Ether , the second-largest crypto by market value; and $34 million of other crypto assets, according to public filings.

    Some of the largest publicly traded companies now include digital assets on their balance sheet, a growing trend in 2021, include MicroStrategy (MSTR), which holds bitcoin valued at nearly $5 billion, as well as Tesla Inc. (TSLA), which owns some $2 billion in bitcoin. Galaxy Digital Holdings holds nearly $800 million in bitcoin.

    Recently, Coinbase said that it had built a $4 billion cash stockpile, as it prepares for closer scrutiny from the likes of the Securities and Exchange Commission’s Gary Gensler and others.

    Don’t believe me? Let’s dig into it

  • First, let’s look at how the original 4 cryptos listed on Coinbase have performed against BTC since being listed. All were marketed as competitors to Bitcoin. Since being listed, 3 of the coins are down 80% against Bitcoin. Only ETH has outperformed (we’ll get to this later).

    [Mish Comment: Chart 3 Below]

  • Next was the ICO craze. Despite most of these ICO coins having little to no liquidity or even working products, Coinbase listed them on their platform anyways. They looked past the red flags and instead saw it as an opportunity to collect listing fees and expand its product.
  • Once the coins were listed on Coinbase and the early investor lock-up periods ended, these insiders had a large platform to dump their positions on unsuspecting investors & walked away with massive profits.

    • Coinbase CEO, Brian Armstrong, announced that the company’s board had approved the crypto spending spree in an August 20 tweet, adding that Coinbase also plans to invest 10% of all profits generated into digital assets moving forward.

    Armstrong also indicated the company hopes to increase the percentage of profit it allocates to cryptocurrency purchases over time.

    A blog post published by Coinbase on the same day announces that the move will establish the exchange as the first publicly-traded company to hold Ether, DeFi tokens and Proof-of-Stake assets on its balance sheet.

    The announcement emphasizes Coinbase’s commitment to making long-term investments in the crypto sector, stating:

    “Our investments will be continually deployed over a multi-year window using a dollar cost averaging strategy.

    They need to be saving in Bitcoin to preserve their wealth — not gambling on unregulated digital penny stocks using bucket shops like Coinbase.

  • /the end. If you are sick of being exit liquidity for insiders and getting shilled sh*tcoins, then delete Coinbase and come check out a real Bitcoin companies who will treat you right, like @swanbitcoin (Disclosure: I work there) I think the reviews speak for themselves.

    • Tweet charts

    Charts and images from Sam Callahan Tweet thread

    A learning experience

    Thanks Sam!

    Hopefully, readers will appreciate your insights. I appreciate the fact that Sam follows me (I just found that out today after deciding to post the above Tweet thread).

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