Coinbase and Bitcoin futures soar after court's Bitcoin ETF ruling

Coinbase and Bitcoin futures soar after court's Bitcoin ETF ruling, Robinhood gains crypto market share, and Circle partners with Mercado Pago to introduce USDC in Chile

Hi!

All three stories in today’s newsletter are about crypto. How come, you might ask…Crypto was supposed to die last year, when Terra and later FTX collapsed. It was also supposed to die this year, after the SEC started suing crypto companies and a couple of crypto-friendly banks went under. However, the crypto story might not be over, so let’s take a look at what happened this week:

• Coinbase and Bitcoin futures soar after court's Bitcoin ETF ruling,

• Robinhood gains crypto market share, and

• Circle partners with Mercado Pago to introduce USDC in Chile

Thank you for reading and have a great day!

Jevgenijs

p.s. have feedback? DM me on Twitter

Coinbase and Bitcoin Futures Soar After Court's Bitcoin ETF Ruling

A federal appeals court has ruled that the Securities and Exchange Commission must reconsider Grayscale Investments' application to launch the first spot Bitcoin Exchange-Traded Fund. This decision has caused a surge in Bitcoin-related assets, with Coinbase (NASDAQ: COIN) and Bitcoin futures prices seeing significant increases. The court found that the SEC's denial of Grayscale's proposal was arbitrary and inconsistent with its treatment of similar products. The SEC is currently reviewing its options, which may include appealing to the Supreme Court, granting Grayscale's application, denying it with different justifications, or rescinding its prior approval of Bitcoin futures ETFs, according to the Wall Street Journal.

The SEC has been cautious about endorsing greater crypto adoption and has repeatedly rejected Bitcoin ETFs from asset managers like Fidelity Investments. Grayscale sued the SEC after it denied its application, citing the SEC's approval of Bitcoin futures ETFs as inconsistent. Currently, the only SEC-approved Bitcoin ETFs are based on futures contracts, which have hidden costs associated with rolling them forward as contracts expire. Bitcoin ETFs are expected to attract new investors by making it as easy to buy Bitcoin as shares of a public company or mutual fund. Several asset managers, including BlackRock, Fidelity, and Invesco, have applied for spot Bitcoin ETFs.

Coinbase shares surge as Cboe and Nasdaq refile for Bitcoin ETF

Coinbase shares soar following Ripple Labs court ruling

✔️ Grayscale’s Court Win Over SEC Lifts Hopes for Bitcoin ETF Approval
✔️ Coinbase Stock Soars on Bitcoin ETF Win. One Analyst Says It Should Drop Instead

Robinhood Gains Crypto Market Share

Robinhood (NASDAQ: HOOD) now possesses one of the world's largest Bitcoin wallets, with around $3.2 billion worth of Bitcoin held for its customers, according to blockchain analytics firm Arkham Intelligence, which highlights Robinhood's significant presence in the cryptocurrency market. In June, Robinhood's customers owned approximately $4.2 billion in Bitcoin and another $7.3 billion in other cryptocurrencies, the company reported in its quarterly report. This sizable crypto holding signifies Robinhood's emergence as a major player in crypto trading, gaining market share as competitors like FTX US and Binance.US have faced challenges.

Image source: Robinhood’s Q2 2023 Earnings Presentation

In the second quarter, Robinhood captured about 4 percentage points of the crypto trading market share from Coinbase (NASDAQ: COIN), according to Mizuho’s analyst Dan Dolev. Robinhood attributes its success to low trading costs, providing users with more value for their crypto investments. Robinhood's revenue from crypto transactions in the second quarter decreased to $31 million, down 47% from $58 million the previous year. Although competition from other brokerages may reduce fees from crypto trades, Robinhood's strong position in the crypto market positions it favorably for potential future growth in trading activity, according to Dolev.

Robinhood launches 24-hour trading

Barron's names best online brokers of 2023

✔️ Coinbase takes stake in stablecoin firm Circle
✔️ Ushering in the next chapter for USDC

Circle Partners with Mercado Pago to Introduce USDC in Chile

Circle, the issuer of the USDC stablecoin, is partnering with Mercado Pago, the Fintech arm of the e-commerce giant Mercado Libre (NASDAQ: MELI), to introduce USDC to users in Chile. The integration of USDC into Mercado Pago's platform will enable Chileans to use the stablecoin for transacting and as a store of value. “With the launch of this stablecoin we seek to [ … ] offer more than two million Mercado Pago users an alternative that matches the value of the dollar,” commented Matías Spagui, Senior Director of Mercado Pago, on the partnership. Mercado Pago had 45.3 million unique Fintech users, including 26.1 million users of its digital wallet at the end of the second quarter.

Image source: Mercado Pago

Last week, Coinbase (NASDAQ: COIN) announced taking a minority stake in Circle signaling a closer relationship between the two companies. Thus, Coinbase and Circle will continue sharing revenue from USDC reserves interest income based on the stablecoin holdings on the Coinbase platform, and will now equally share interest income from wider USDC distribution and usage. USDC, which was launched in 2018, has a market cap of $26 billion and accounts for approximately 21% of the stablecoin market, according to CoinMarketCap. Tether, the largest stablecoin, had a market cap of $82.8 billion as of this writing.

Fintech Rivalries: How Fintech Companies Stack Up Against Each Other, Part 3

✔️ Circle Teams Up with Mercado Pago to Introduce USDC to Chile Customers
✔️ Coinbase takes stake in stablecoin firm Circle

This year Coinbase (NASDAQ: COIN) and Robinhood (NASDAQ: HOOD) are outperforming the Nasdaq Composite Index. Nasdaq Composite is up 31% YTD, while Coinbase stock is up a whopping 139%….

…however, if you look at the performance of Charles Schwab and Interactive Brokers over the last 20 years, you might be better off investing in an index fund than a brokerage stock….

• Market Expansion Lead, Americas
  @ Coinbase
  🇧🇷 Remote, Brazil

• Head, Mobile Business Development
  @ Coinbase
  🇬🇧 London, United Kingdom

• Chief Information Security Officer (CISO) - Crypto
  @ Robinhood
  🇺🇸 Menlo Park, CA or New York, NY, United States

• Product Manager, Crypto Expansion
  @ Robinhood
  🇺🇸 Menlo Park, CA or New York, NY, United States

• Social Media Lead
  @ Robinhood
  🇺🇸 Menlo Park, CA or New York, NY, United States

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Cover image source: Coinbase

Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.