Apr 12, 2021 • 8M

Ep. 18. Monster in waiting

Robinhood had more crypto users than Coinbase in Q1

 
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Some say Crypto is a scam. Others swear it's a breakthrough technology. But which is it? Join us, as we explore Crypto in real life (IRL).
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I hope you had a great week. It’s been sunny in Texas, almost feels like summer is here. Meanwhile, the crypto news cycle continues heating up. Next week is the much anticipated Coinbase IPO. But first let’s dive into some highlights from last week. As always, I look forward to your feedback. Let’s go.

News

  1. Coinbase had a monster Q1

    • Coinbase reported 56M users and 11% of all crypto assets are on their platform (both retail and institutions). Some analysts have upgraded their valuations over $100B ahead of Wednesday’s IPO

    • Lately, I have been thinking about two flavors of the Coinbase effect 

      1. Messari Research reported that tokens listed on Coinbase average a whopping 91% price increase in the first 5 days! For more information check this out this link.

      2. The IPO is going to mint a fresh batch of millionaires. Real estate agents and car dealerships are salivating. I also expect to see an exodus of talent as employees explore new opportunities. Some may become angel investors and pump more funds into the crypto sector.

    • Crypto Twitter is divided on whether or not to invest in Coinbase. Bitcoin maximalists believe bitcoin will outperform Coinbase in the long run. They are also fundamentally opposed to the centralized exchange.

    • Pragmatists argue that Coinbase is a key part of the ecosystem. Besides, whenever crypto prices inevitably fall, Coinbase may prove more resilient than bitcoin. After all, Coinbase profits from transactions irrespective of the price.

  2. Q1: Robinhood had more crypto traders than Coinbase

    • In Q1, 9.5M Robinhood customers had crypto transactions each month. This was ~50% higher than Coinbase’s monthly users (6.1M). 

    • Unlike Coinbase, Robinhood does not charge a commission for cryptocurrency transactions. However, Coinbase pays interest on deposits in its account and covers more cryptocurrencies. 

    • Robinhood and other companies with existing customer bases have an advantage over crypto native solutions that have to work harder to win each customer. This begs the question when will retail banks and other FinTechs enable customers to buy, sell, and store cryptocurrencies?

  3. Crypto crosses $2T 

    • The total value of all cryptocurrencies topped $2 trillion for the first time this week.

    • Bitcoin accounts for more than 50% of this value. This week we reached a milestone where 100 cryptocurrencies were valued at $1B or more 

    • In Q1, the top 5 gainers were: BinanceCoin, Cardano, Uniswap, Polkadot, and Ripple. I hope to dive into these in the future.

  4. Crypto climate accord

    • The Crypto Climate Accord is styled after the Paris Climate Accord. It has an ambitious goal to achieve net-zero emissions for the entire industry, including eliminating all historical emissions by 2030. 

    • Ripple, CoinShares and ConsenSys have joined the accord. I expect some other prominent players will follow in the months ahead.  

    • The environmental impact of cryptocurrency mining has been a hot button issue in recent months. CoinShares research found that 74% of cryptocurrency is powered by renewable energy largely due to surplus hydroelectric capacity in China. Critics think it is lower.

    • The push to net-zero emissions may have implications for new miners aiming to use coal, gas and crude oil to power their operations

  5. Chinese companies pivot to crypto

    • China is ground-zero for cryptocurrency. Much of the mining capacity, miner production, and national digital currency innovation is centered there. This week, two Chinese companies made significant pivots to become players in the cryptocurrency industry.

    • The9, a publicly traded gaming company in China purchased $6M computers to become a cryptocurrency miner 

    • 500.com, an online lottery company in China, spent $100M to acquire Bee Computing, a manufacturer of cryptocurrency mining computers 

    • These moves are even more aggressive than what we have seen in the US. Stay tuned.

Explore

  1. Bitcoin Billionaires: This week, I a wrote book review on this book. I really enjoyed reading it and I’m convinced one day it will be made into a movie. It tells the story of the Winklevoss twins and the history of bitcoin. Check it out my review here

  2. Bitcoin & Black America: I previously shared a book review on this book. It argues that African Americans have a lot to gain by embracing cryptocurrencies and decentralized finance. Check out my review here.

  3. What should I read next? Let me know if you have any suggestions.

  4. Crypto Course: This week, I’m starting a 3-week crypto course. I’m super pumped to learn more. I’ll keep you posted on how it goes.