Digital Asset Market Update – Coinbase IPO, Michael Saylor – Week of April 12th, 2021

 

Alexander Blum Provides Insight on the Biggest News in Digital Assets. Watch the video on YouTube or read the transcript below.

 

Hi everybody, this is Alexander Blum, the managing director of Two Prime, with some news and crypto institutional market updates for the week of April 12, 2021.

First off, what’s on everyone’s mind is the listing of Coinbase stock on the Nasdaq stock exchange. This article says IPO. It’s technically a direct listing, but on Thursday of this week, the 14th, we will see Coinbase stock go public. Not only will it go public, but it’s going to go public at a massive market cap. Many people are estimating over one hundred billion for the total market cap. This means a couple of things for the crypto market.

One is it adds legitimization that a publicly traded, regulated, well-known company that’s financially successful is listed on a public stock exchange. It also means that all the investors in Coinbase who are inclined to be crypto ecosystem interested will have a massive liquidity event with a lot of upsides that likely some of that will return into other crypto ecosystem investments or maybe investments or in Bitcoin or Ethereum itself.

Furthermore, just all the news and excitement around the listing as it’s marketed and reported on throughout the industry and mainstream media will drive more interest and eyeballs on the crypto market, which tends to translate into rising prices.

It’s interesting. You can also kind of get a sense of maybe where the IPO is going actually to end up at. This is on FTX. They offer a pre-IPO contract that basically mirrors or will convert into the stock when listed in a couple of days; there are 250 million shares available. And so if you do a little quick math of $584- times 250 million, you can see on there the Coinbase FTX shares are selling at an implied market cap of about one 146 billion dollars, which would be a super strong listing.

Additionally, because FTX has less liquidity, we’re looking at less than two million in traded volume on this product over the last twenty-four hours, as well as some risk and unfamiliarity with FTX compared to Nasdaq. There’s probably an extra discount that’s being implied here because of those factors. And so you might see above 146 billion as it leads up to direct listing Stock Day on Thursday.

Next up, there’s been a lot of talk for the industry about Miner-Extractable Value, or MEV, the famous world-renowned CryptoCobain generator, NFT-lover, and pretty wealthy smart trader that some well over the last couple of years are here talking about Miner-Extractable Value.

But effectively, there has been a lot of this value created by miners in the Ethereum space has led to these very high Ethereum fees. And so we see that basically, there are people doing arbitrage and trading techniques to capture a lot of that price discrepancy or extracted value, and it doesn’t actually go to the miners.

So there’s been this new development of a thing called flash pots. Still, basically ways for miners themselves to directly get that value, which is also drastically lowered the fees associated with dealing Ethereum trades as of this morning, I think it is about 60 Gwai, which is very low compared to hundreds or thousands that it was just a couple of weeks ago this not only gives more benefit to miners, it also means that fees are lower, which means that more people can transact, especially in the Defi, kind of higher-frequency trading space on the Ethereum block-chain, which means that the Ethereum price will go up, the ecosystem is more secure, and it just benefits all around.

You can see just on this little dashboard, there are millions and millions of dollars being made through Miner-Extracted Value, and hopefully, a lot of that be returned to miners, and fees will continue to stay low. But generally a very positive and bullish development for the crypto space or the Ethereum space.

Lastly, I saw this morning the mad man, Michael Saylor, talked about MicroStrategy starting to pay their directors in fees received to their board in Bitcoin than in the filthy US dollars.

And so, to me, it’s just another way for MicroStrategy to lead the charge on ways to integrate Bitcoin into corporations. And it’s just another interesting data point and shows that they’re really all in over there at MicroStrategy, and the board must like what they’re doing.

Also, they made a lot of money and are willing to get paid in Bitcoin. So generally, another interesting development for a huge Bitcoin bull.

So that’s the week of April 12th. I appreciate you listening and hope you have a great week.