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The Coinbase effect. Why does it matter?
The Coinbase impact on the crypto ecosystem. Why do Americans buy NFTs? Gamers lead the web3 charge. Ukraine gets $70M in crypto donations. Playboy to launch MetaMansion. Japan gets a metaverse.
Hello y'all. This is The Token Dispatch, and we are chuffed that we can now chill in the Playboy MetaMansion. Americans have had enough of the country's financial system, or so says the survey. They also buy NFTs for the status. We do it for a living 🤖. What will they think of next 🤔? Got to love America 🥰. Just like we love Paper Planes.
The poster boy of exchanges and the most compliant, Coinbase is trying to stay out of trouble with the authorities by suspending the listing of BUSD on March 13th. It had an internal review and decided BUSD no longer meets Coinbase's "listing standards." This is an attempt to dodge any accusations that they've been selling unregulated securities.
The whole mess started when Paxos got into some regulatory hot water over the Binance stablecoin, with the SEC gearing up to sue Paxos for breaking investor protection laws. It's not all new. Exchanges like Coinbase had to take similar steps back in 2020 when the SEC came after Ripple Labs. So is it gonna be a rough ride for BUSD now that it's lost that Coinbase listing magic?
👨⚖️ The ruling effect
The Coinbase insider trading case has raised the stakes for the crypto industry. Federal prosecutors filed criminal charges related to wire fraud last July against Wahi, his brother Nikhil, and their friend Sameer Ramani - yes! But then the SEC piled on with civil charges and accused the three of violating securities laws as well. - wait what? The SEC has claimed that at least nine of the tokens involved in the scheme are illegal securities. - HWGA!
If the court rules in the SEC's favour, it could put a damper on creators and developers from making new assets. And they might even have to register with the SEC before launching tokens. The case could also drag Coinbase and other exchanges down with them. They could be seen as venues that facilitate the sale of illegal securities. So, this ruling effect could really shake things up in the digital assets space.
💰The earnings effect
Coinbase reported fourth-quarter earnings that beat analyst expectations. Net revenue of $605 million instead of the estimated $588 million. Shares rose significantly in 2023 so far, up 78%. But let's not forget the struggles they faced. With crypto exchanges dropping like flies and regulators throwing allegations left and right, Coinbase was able to swoop in and capitalise on the situation. However, being a public company may also be one of their "largest intrinsic barriers" when it comes to dealing with regulation. But hey, they still managed to come out on top during one of the worst market conditions in crypto history. As Anthony Georgiades from pastel network said, "digital assets are certainly here to stay!"
💸 The listing effect
Yes, Coinbase listings have always been like rocket fuel for crypto prices! But wait … data from Coin Metrics tells a different story. When Coinbase announces a new listing, the asset usually experiences a 20-40% increase in price for the first 10 days, but over a 100-day period, these gains tend to level out. The report concluded that traders looking for a 100% gain may not have the odds in their favour, and that the price of the asset is subject to the broader trend of the asset class. All the BUSD believers out there can chill!
🤔 The nano-allegation effect?
Coinbase recently launched their Nano-branded Bitcoin and Ether futures contracts. And now, NanoLabs (company behind digital currency Nano) has an issue with it - they call it trademark infringement.
The products are identical or highly similar" to its digital currency, Nano.
Targets the same type of consumers
Coinbase had full knowledge of the Nano digital currency before launching its products.
NanoLabs is asking for a cool $5 million in damages, plus an injunction against Coinbase, corrective advertising, and the destruction of all infringing materials.
🌅 Bright future anyway:
Coinbase is looking forward to a great year ahead by launching its very own blockchain - Base! This blockchain will be an Ethereum L2 network that's totally open source and built to make it super easy for developers to create Dapps. And for Q1 2023, the company projected subscription and services revenue of $300M to $325M and restructuring expenses of around $150M. So buckle up!
What do you buy NFTs for? 🧐
What's the deal with NFTs? Turns out, it's all about the status!
Metajuice surveyed over 6,000 NFT users and almost 75% of NFT collectors on their platform buy NFTs for one thing and one thing only: status! Some people are in it for the long haul. According to the survey, 13% of participants said they're buying NFTs to resell them in the future.
And it's not just the crypto-savvy crowd who's interested in the financial revolution. A survey commissioned by Coinbase found that Americans from all walks of life are frustrated with the inequality in the financial system and are hungry for change and see crypto as a powerful part of the solution:
TTD Blockquote 🔊
"It's a matter of time"
"By the time we see mass adoption of Web3 games, really, out in a couple years, the friction that you see today I think will largely be gone. Not entirely, but gamers are the most savvy tech group—so they'll be the earliest adopters."
Play-to-earn games have surged in value and attention in 2021 but have been criticised for being shallow and simplistic. Wyatt ain't worried, though. He knows those game devs gonna step up their game in the Web3 world! Wyatt believes that gamers will eventually embrace Web3, but there need to be stronger Web3 games to justify the attention and investment of players.
The Fight Club: Crypto Lawyers and Twitter v SEC
SEC Chair Gary Gensler dropped some spicy takes in his latest interview with New York Magazine. Apparently, "everything other than Bitcoin" falls under the agency's remit. He went on to say that all these other crypto projects are "securities" since they're backed by a group in the middle that the public expects to generate profits.
"There are people behind these cryptocurrencies using a variety of complex and legally opaque mechanisms, but at the most basic level, they are trying to promote their tokens and entice investors."
Crypto lawyers are challenging Gensler's claims: Jake Chervinsky, a lawyer and policy lead at the Blockchain Association, argued that Gensler's opinion is only the law once the SEC proves its case in court. Lawyer Logan Bolinger also argued that Gensler's opinion is not legally dispositive.
TTD Number Picker🔢
$70M and counting
Ukraine has gotten more than $70 million in cryptocurrency since the Russian-Ukrainian conflict started. Most of it was in Ether and Bitcoin, but they also got some fancy NFTs too. The biggest chunk of donations (Around 80% of the total) came in the early days of the war, which helped the country get some military gear and help for the people.
BTC whale population shrinks to early 2020 levels
Bitcoin (BTC) is continuing its bullish trend as it closes out in February 2023, with prices currently around $23,500. Analysts are eyeing a breakout toward $30,000 if support can become more permanent, while concerns remain that a trip back toward resistance reclaimed in January is still on the cards. On-chain data shows long-term Bitcoin holders are in no mood for selling yet. March marks the real make-or-break month for BTC/USD as it approaches a long-term trend line, with $25,000 being the line in the sand.
Metaverse Economic Zone in Japan
Fujitsu and Mitsubishi have partnered to create a 'Metaverse Economic Zone' in Japan. The agreement focuses on building an open metaverse infrastructure called “Ryugukoku,” which will spark the next wave of metaverse development. It will integrate technologies and services such as gamification and fintech to build the technical infrastructure. It will be used for information dissemination, marketing and workstyle reform for domestic enterprises. Users will be able to engage in an RPG-like experience as they travel through different realms. #GoJapan 🚀
TTD NFT Buzz 📯
Playboy is set to launch its MetaMansion virtual world this year, which will be open to users who are part of the magazine brand's Rabbitar community, as well as those interested in web3.
SuperRare co-founder Jonathan Perkins believes that creator royalties are an essential part of the NFT space and that they are not going away anytime soon. And, Renowned artist Tom Sachs doesn't care for the label of Web3, including terms like crypto and NFT. Instead, he is more interested in how artists are leveraging blockchain technology to augment their creative process.
Yuga Labs is launching its first Bitcoin-based NFT project, TwelveFold. Meanwhile, Kyle "Mongraal" Jackson, an 18-year-old esports player, has sold his winning "Dookey Dash" key NFT to billionaire entrepreneur Adam Weitsman for 1,000 ETH, or $1.63 million.
The Prudential Regulation Authority (PRA), which regulates banks in the U.K., is planning to propose rules on issuing and holding digital assets.
Alan Rogers, a former Premier League footballer, was among the 8,000 investors who claim to have lost as much as $100,000 in Phoenix Community Capital.
Colombia’s Magdalena Administrative Court held a court case in the metaverse on Feb 15 involving participants in a traffic dispute.
Ras Al Khaimah, UAE to open free zone dedicated to crypto companies, a strategic time-zone that fills the gap between financial centers in the West and the East
Alchemy Pay has obtained a license from the central bank of Indonesia to offer low-cost remittances for crypto users.
So long. OKAY? ✋
The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @12:00 GMT. Almost always.