The Q3 Blues Starring $COIN, $SQ, $HOOD

November 10, 2021       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

• Apple CEO Tim Cook said he owns Bitcoin and Ethereum.

• Discord CEO Jason Citron hinted that the company is working on an Ethereum wallet integration.

• Landry’s, a restaurant chain, partnered with NYDIG to offer a BTC loyalty rewards program at its 500 locations in the US.

• The Ethereum Name Service token, ENS, has a fully diluted market cap of over $5 billion.

• Microsoft’s Decentralized Identity team launched its ION Decentralized Identifier (DID) network on BItcoin.

• Reddit co-founder Alexis Ohanian’s Seven Seven Six fund committed $100 million to grow decentralized and social media projects on Solana.

• The Basel Committee plans to address climate-related risks for banks handling crypto assets.

• Austria will apply capital gains taxes to digital currencies.

• Ripple announced plans to launch a hub where users can buy and sell BTC and ETH, in addition to XRP.

• Circle launched a venture capital fund for blockchain projects.

• The Blockchain Association hired Dave Grimaldi and Jake Chervinsky to lead government relations and policy, respectively.

• According to a poll published by the Federal Reserve, financial industry participants are more worried about cryptocurrencies/stablecoins than political uncertainty, cyberattacks, or a China slowdown in the next 12-18 months.

What Do You Meme?

What’s Poppin’?

Not Coinbase

Shares of Coinbase (COIN) fell roughly 10% during after-hours trading on Tuesday afternoon on the heels of a disappointing earnings report.

Two significant metrics shrank nearly 50% between quarters:

• Coinbase’s EBITDA (earnings before interest, taxes, depreciation, and amortization) decreased from $1.15 billion in Q2 2021 to $618 million in Q3.
• Net revenue experienced a similar decline, falling from $2.03 billion to $1.23 billion between quarters.

The drop in earnings and revenue appears to stem from an overall decrease in usage. Both trading volume and monthly transacting users in Q3 were lower than in Q2, by 29% and 16% respectively.

Interestingly, the report from Coinbase comes shortly after Square and Robinhood, two publicly traded companies that offer retail crypto services, revealed reduced Q3 revenues too. Square, which provides crypto through Cash App, reported a 23% drop in its Bitcoin profits in Q3. Robinhood’s numbers were even more drastic, with crypto revenue freefalling 78% between Q2 and Q3, leading to its total revenue shrinking from $565 million to $365 million, respectively.

Zooming out, the picture gets rosier. For example, Coinbase’s net income in 2021 increased by over 500% compared to Q3 2020. Monthly active users also more than tripled in the last month. Additionally, according to FTX CEO Sam Bankman-Fried (who knows a thing or two about running a crypto exchange), Coinbase is “probably in line for a good Q4” based on the charting of relative user growth.

In an investor letter, Coinbase said that it had outperformed the market during Q3.

“While we entered Q3 with softer crypto market conditions, driven by low volatility and declining crypto asset prices, market conditions improved meaningfully later in the quarter which we have continued to see into early Q4. This backdrop led to global crypto spot trading volumes declining 37% in Q3 as compared to Q2, however, Coinbase outperformed the market with total trading volumes of $327 billion, a 29% decline in the same period. We have consistently indicated that volatility is a key factor influencing our transaction revenue. Q3 illustrates this point.”

As of publishing time, Coinbase is trading at $312.60 on Robinhood, a price at which Messari’s Ryan Selkis would “buy” if he traded “stonks.”

Recommended Reads

• Arca on the fat protocols thesis:

• Coinbase’s Elias Simos on the $ENS airdrop:

• CoinShares’s Meltem Demirors on Bitcoin:

On The Pod…

NFCastle 2021: Art Controversy – NFTS: Nothing F**king There?

At Non-Fungible Castle 2021, an NFT exhibition in Prague, four NFT experts debate some of the hottest topics in the metaverse, like how to value NFTs, whether insider trading exists, what makes Ethereum-based NFTS so special, and the environmental impact of NFTs.

Guests include Maria Paula Fernandez, co-founder at JPG, Kavita Gupta, cofounder of FINTECH.TV, Oliver Halsman Rosenberg, artist, and gmoney, an NFT collector. Show highlights:

• what an NFT is
• why NFTs have value
• what the “myth of decentralization” has to do with NFT valuation
• why collectors like gmoney prefer to collect NFTs on Ethereum vs. other chains
• how provenance and IP rights interact with value
• why gmoney thinks Solana Punks are like fake Chanel bags
• what “owning an NFT” actually means
• whether newbies need to be protected from buying scam NFTs
• the “rite of passage” of falling pretty to a rug pull and the concept of “do your own research” (DYOR)
• what can be done about insider-trading-like activities in NFTs
• how to navigate public-facing blockchains when your address is doxed
• different ways to link off-chain assets to NFTs
• what the crypto industry can do to better understand the NFT impact on climate change

Book Update

You can purchase it here: http://bit.ly/cryptopians