Coinbase invest all profits in crypto

coinbase invest all profits in crypto

Let’s go over the business model of Coinbase and other crypto Tweets of the day.

This Tweet Thread is courtesy of Sam Callahan.

  1. Allow me to share an article I wrote that looked into how sh*tcoins perform after being listed on Coinbase. After digging into it, I remain highly critical of Coinbase’s questionable listing policies and marketing strategies. TL;DR – Coinbase is the woooooooorst
  2. I was motivated to write this after Coinbase recommended “Top 10 Picks” to their customers that didn’t include Bitcoin despite Bitcoin outperforming 99.9% of sh*tcoins long term. They even recommended AXS over BTC two weeks AFTER its Ronin Bridge suffered a $625 million hack.
  3. Since being recommended by Coinbase, these “top 10 picks” are down an average of -37% against Bitcoin.

The long-waited Ethereum 2.0 upgrade phase is approaching. Meanwhile, investors agree that Ethereum 2.0 will feature many new tools.

Expectations about the network consist of faster speed, improved security, and high scalability which enables thousands of transactions to process per second on the blockchain.

No Clear Winner Going Forward

Many people still compare Ethereum to Bitcoin and hope that Ether will soon be able to overtake the largest cryptocurrency.
However, this is very unlikely to happen anytime soon.

If the drawback of Bitcoin is its volatility, for Ethereum, the only challenge is that Ethereum’s development is incomplete, so it is difficult to predict what improvements will come true.

This may create a lot of confusion in the investment process.

Because of this, it is unlikely that ETH will surpass Bitcoin in the near term.

Coinbase invest all profits in crypto

Coinbase has released its 3Q financial summary, highlighting key business and financial metrics, a report of the previous quarter as well as in-depth insights into the crypto market.

According to Coinbase’s report, although institutions have split their interest into other crypto assets, Bitcoin and Ethereum maintain their leading positions. This fact is proven via the trading volumes on Coinbase.

Coinbase Sees Bright Future for Tokens

The major crypto exchange has a long-term strategy to expand its support for the two leading digital assets.

According to CFO Alesia Haas’ statement, Coinbase has reinvested profits into crypto this year, the estimated total amount is $180 million.

She commented,

“In the big picture, our goal is to become vast majority, if not 100%, crypto over time.
We’ve made two commitments.

Coinbase invest all profits in cryptocurrency

The same applies to the stock market, the bond market, currency traders, even home owners.

Questions abound

Do I want to hold this asset or something else?

If someone is willing to sell you a Bitcoin for $30,000, ask yourself why. What is it that they think they know that you think they don’t.

Are the sellers “Bitcoin Whales” deciding to cash out? Newbie greater fools who has had enough?

I don’t know, and you don’t either. Yet, the pretending goes on: “Bitcoin always will rise.”

Anyone who makes that statement is a liar, a fool, or a charlatan hoping you are their greater fool.

Cash isn’t trash

Even in inflationary environments, cash is not trash.

  • Cash is down about 10% this year to price inflation (except vs assets).
  • Bitcoin is down about 56%.
  • LUNA is down about 100%.

Coinbase invest all profits in cryptography

In a tweet, Armstrong, co-founder and head of the platform, said Coinbase would also be investing 10% of all profits in crypto.

In a late-Thursday blog from Coinbase, CFO Alesia Haas expanded on Armstrong’s tweets.

“We believe in the cryptoeconomy, a future where economic transactions–buying, selling, spending, earning–will be based on crypto assets,” she wrote.

“This means we will become the first publicly traded company to hold Ethereum, Proof of Stake assets, [decentralized finance] tokens, and many other crypto assets supported for trading on our platform, in addition to bitcoin, on our balance sheet,” Haas wrote.

Coinbase (COIN), as of Dec.

We are long term investors and will only divest under select circumstances, such as an asset delisting from our platform.”

The post adds that future investments may be informed by its customers’ holdings, suggesting Coinbase may add an asset to its balance sheet should users make significant custodial deposits of a given crypto cryptocurrency.

Coinbase will make its trades on third-party platforms or via its over-the-counter trading desk to avoid creating conflicts of interest with its customers.

According to Crypto Treasuries, Coinbase is currently the eight-largest public company by Bitcoin holdings on its balance sheet, and the largest crypto exchange by value of BTC held in its treasury.

The news about new expenditures on crypto comes just a day after Coinbase completed its Japanese launch in partnership with Mitsubishi UFJ Financial Group (MUFG).

The median performance against Bitcoin after their listing is -67.3%, with a median days since listing of 274 days. (Read that again please)

  • This data is evidence that BTC and other cryptos should not be considered similar. BTC has unique properties that allows it to hold its value over time.

    Every other crypto besides Bitcoin is better thought of as a digital penny stock. You won’t hear this from Coinbase though.

  • Back to ETH…from its time of listing, it has actually outperformed Bitcoin.

    But the data above highlights how continued demand for Ethereum has been driven by its switching claims from being a platform for ICOs, to DeFi, and then NFTs (which nearly all underperformed Bitcoin).

  • In the beginning, ETH was not marketed as a long-term investment but rather was promoted as “digital oil”.
  • Will Coinbase even survive?

    For discussion, please see Cathie Wood Provides Lesson of the Day: Don’t Invest in Fairytale Stocks

    Where is Bitcoin headed?

    I have frequented commented “I do not know and nor does anyone else.” The same applies Ethereum and all the rest of the coins.

    That said, I suspect Dogecoin has a date with zero. It was started as a joke. It’s now down to $0.085 from a Musk-inspired hype high of $0.74.

    Anyone who got in on the “Musk high” is down 88% with almost no chance of recovery in my estimation.

    More noteworthy Tweet discussion

    Retail distribution is the coinbase model

    A word about the future

    Pretending to know the unknowable

    No one knows where these coins are headed or in what timeframe.
    Yet, every day people pretend to.

    Anyone who follows me has to know that I am not a fan of crypos, including Bitcoin.

    But I especially went after the obvious fraud pretenders including LUNA and DOGECOIN, the latter hyped by Elon Musk.

    Perhaps Sam feels the same way that I do and have commented on many times. “I follow lots of people on Twitter I disagree with and learn more for them than I do with people echoing my thoughts.”

    Hopefully, the above Tweet thread by Callahan sheds a lot of light on what is happening in the crypto space.

    You just don’t understand

    Coinbase chart

    Coinbase chart courtesy of StockCharts.Com, annotations by Mish

    Coinbase is the 8th largest position of Cathie Wood’s ARK fund.

    Coin supply myth

    Contrary to popular myth, the supply of Bitcoins does not decrease when it halves,

    A Bitcoin halving is when the payout for mining a new block is halved. This happens after every 210,000 blocks (approximately four years).

    Halving limits the increase in the number of Bitcoins over time, but that does not decrease the supply.
    Instead, halving decreases the rate of increase of supply.

    The supply of Bitcoin is every coin ever mined minus those with lost keys.

    Every second of every day interested parties have to address a simple set of questions.

    Decision time 100% of the time

    • Holders: Do I hold Bitcoin or would I rather hold something else?
    • Potential Buyers: Do I buy Bitcoin, something else, or nothing at all?

    It’s important to understand there is nothing unique about Bitcoin.

    Most of them I have never even heard of. (Pawtocol…anyone? lol) Apparently, business has been good in the coin listing business.

  • It’s important to understand the game at play here…when a sh*tcoin is created, early investors typically make investments, a development team is formed, and a % of the coins are issued to these insiders at extremely low prices.
  • This insider allocation usually occurs in the form of a “pre-mine.” This is an aptly named term to describe coins that are given to early investors & the team before the general public has the ability to mine or buy them. This is similar to a startup issuing equity to investors.
  • But most of them are naïve about supply and demand, bear market liquidity, the true driving force behind cryptos (speculation), and what they believe they know that is simply unknowable.

    On May 12, I discussed Bitcoin Margin Calls, Waterfall Events, and People Pretending to Know the Unknowable

    On May 14, I noted El Salvador’s bonds Sell for 40 Cents on the Dollar, What About Bitcoin City?

    El Salvador has models. President Nayib Bukele tried to sell bonds backed by Bitcoin but there were no takers.

    But he is buying the coins.

    Michael Saylor, CEO of MicroStrategy (MSTR) bet his company on Bitcoin. El Salvador president Nayib Bukele bet the country.

    Both did so with Bitcoin above $30,000.

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