Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors.

Coinbase Q3 Report - Cautiously Optimistic

Coinbase, the US listed Crypto exchange, just published its Q3 financials. You can read the whole letter here, a shorter CoinDesk piece on it here, or an even shorter summary in our newsletter.

First of all, the bad news. The money Coinbase makes from transactions went down 44% from Q2 to 366 million USD. This is in line with exchange volumes dropping across the board since Crypto is less volatile. Furthermore, the report claims that another factor is the “perception of uncertainty” about the upcoming regulations in the US when it comes to digital assets. Consequently, the overall net revenue was below expectations by about 10%.

Now, for the good [or better] news. While people have been trading less, there is still a good deal of digital assets that Coinbase holds for its customers, generating interest and, in turn, revenue. This increased 43% over the Q2 number, up to 211 million USD.

Operating expenses were down 38% versus Q2, while overall losses came down 50% from 1.1 billion USD to 545 million USD. This makes Coinbase “cautiously optimistic” with respect to keeping this number below 500 million USD in the following quarters, hoping that the bear market won’t get much worse. Considering the fact that the company has about 5.6 billion USD in cash, there is some serious runway left.

Finally, Coinbase CEO Brian Armstrong expressed optimism in the earnings call by reminding people that bear markets are great opportunities for building, reminding that plenty of institutions are expressing interest towards the Crypto space and are getting ready to jump in as the macroeconomic conditions get better. We’ll see how it goes when we get there.

Mihnea

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Binance partners with Twitter

Exactly one week ago, Elon Musk finalized the purchase of Twitter and in the past few days, Twitter has been roaring over his decision of monetizing the Blue features, priced at $8/month.

Now, we know Elon as a troll and crypto enthusiast, holding BTC on the Tesla balance sheet and relentlessly tweeting about $DOGE last year… and the tweets have started again. Tied to the acquisition of Twitter is CZ, Binance’s CEO, which invested $500M into Elon Musk’s Twitter for the purpose of “help bring Twitter into Web3”. From every point of view, CZ’s decision makes sense: Twitter is the go-to place for crypto people and Elon is monetizing it better(?) than before. This means good chances of proper Return on Equity (ROE) for CZ and great PR since he’s won another battle against FTX’s SBF, whose offer Elon declined. Since the acquisition, $DOGE ranks extremely high for trading volumes on Binance, and $MASK does too, despite its market cap.

It may seem like an unlikely partnership, but Binance’s role in helping Twitter will include adding crypto-based payments to the platform… and we can only guess what those currencies could be. A few days later, Binance launched a curious index, named intuitively “Bluebird”. Its performance is tied to $BNB, $DOGE and $MASK, with weights based on volume and market cap. Currently, the weights are approximately the following:

BNB - 52%
DOGE - 42%
MASK - 6%

I think this is a nice change of pace, and Twitter x Binance goes one step further in institutional adoption - they, alongside others, may start a trend of institutional collaboration, where crypto professionals get to act, not only watch. We could be building with them, not just for them.

Matei

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NFTs on Instagram

Just 2 days ago, Meta announced that NFTs minting (& selling) is coming to Instagram, via the Polygon Network (noticed $MATIC’s >20% gain these past few days?!). But I suppose most of us are not surprised by this news, especially since Twitter is doing its part in Web3.

Now, the announcement reinforces an idea we have all developed since the pandemic: social media platforms, in their current form, are not optimized for content creator monetization. Sure, some creators might prefer Youtube over TikTok for more money but others prefer shorter formats, while others livestream on Twitch. None of these platforms is like the other in terms of monetization, and it’s usually 1 of 2 things creators go toward: a bigger audience and/or bigger revenue. They are not mutually exclusive but oftentimes there’s a tradeoff to be made. And until now, the most common ways of monetizing creators is through revenue sharing from the platform itself, based on disclosed metrics or coin-like systems where the audience can gift tokens to the creator (what we’re seing on TikTok).

This is why Instagram’s news is so important - they aren’t an incredible platform for monetization so far and adding NFTs, as we know, cuts the middleman and lets creators enjoy a considerably larger percentage of what their fans/clients buy. I think that a successful integration for Meta and native NFT selling & minting is a great strategic move in their overall business model (currently pivoting toward the Metaverse).

We’ve previously talked about Meta’s supposed vision of the Metaverse which, to be fair, didn’t seem like a great idea in the beginning. We think that the Metaverse should be open and interoperable, not centralized. But introducing NFTs on Polygon is a great start for Meta to make seamless operations between Instagram and whatever they’re building for the future.

Matei

For more educational crypto content, check out the links below:

The Stakeborg DAO Talks on YouTube: https://www.youtube.com/playlist?list=PLOrFZZifNn4Nx4nSQL3WS52ALPXgrTSVG
Discord channel: https://discord.com/channels/901898461568442458/903006233584341052
StakeborgDAO Quarterly Reports: https://docs.stakeborgdao.com/reports/dao-quarterly-reports
Stakeborg Academy: https://academy.stakeborg.com/

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