Crypto Weekly: Significant public listing and trading desk coming up

Crypto Weekly: Significant public listing and trading desk coming up

Mads Eberhardt

Cryptocurrency Analyst

Summary:  Coinbase files for a direct public listing on Nasdaq showing its finances for the public for the first time. Goldman Sachs launches its cryptocurrency trading desk focusing on trading Bitcoin futures while its custody-solution for crypto-assets is set to launch later on.


Coinbase files for a direct public listing

At the end of 2020, it became public that the biggest US-based cryptocurrency exchange Coinbase intends to go public. Last week, the public was invited to the process as Coinbase filed its S-1 filing to the SEC before going public. The filing consists of critical elements about its business together with key figures, which the public eye has never had direct access to. To sum up, Coinbase more than doubled its revenue last year from the previous year to $1.2bn as the crypto market surged. From its revenue, the exchange managed to turn a profit of $322mn. It was the first time the exchange generated a profit over an entire fiscal year. Additionally, the filing confirms that Coinbase had 43mn verified users by the end of 2020. More interesting for the market, is the development in its trading volume from respective client segments. From being founded in 2012 as solely retail-focused, Coinbase has developed into being the gateway to the crypto-market for institutional investors. In Q4 2020, around 64% of its $89 billion trading volume came from institutional clients. On top of that, Coinbase is generating revenue from its institutional clients when storing their assets in its custody solution. Crypto assets stored at Coinbase totals around 11% of the total cryptocurrency market capitalization - up from 4.5% just two years ago. The company is storing crypto-assets worth $90bn. The public listing on Nasdaq marks a significant milestone for the crypto market. Without a doubt, Coinbase is the most noteworthy company in the industry next to Binance as they have an immense influence on the industry. Letting clients and the public be an active part of that, should not be underestimated. Furthermore, with an expected valuation of up to $100bn, it also marks one of the biggest public listings this year. On the other hand, the filing last week also signals the weaknesses to Coinbase’s business as they are hugely dependent on trading volume to financially perform well. If the trading volume declines with a fair margin, then Coinbase loses a significant part of its revenue. Coinbase has started to focus more on services generating stable revenue like its custody solution and staking, e.g., Ethereum staking which was launched two weeks ago. Here, Coinbase takes a percentage fee of the total amount stored or generated in staking rewards. However, these incomes are based on cryptocurrency prices, making them vulnerable to bear markets. As a result, the public listing from Coinbase comes with significant risk - just like anything else in the industry. The listing is expected to take place within the next couple of months.

Goldman Sachs launches its cryptocurrency trading desk

One of the world’s largest investment banks, Goldman Sachs, is rumored to be launching its cryptocurrency trading desk in mid-March. The trading desk will mainly deal with Bitcoin futures trading, possibly the CME Group Bitcoin future. The plan to launch a cryptocurrency trading desk goes well with the cryptocurrency custody solution Goldman Sachs allegedly has in its product pipeline. Thereby, Goldman Sachs will directly compete with Coinbase in the case they launch their custody-solution. Goldman Sachs was reportedly close to launching its trading desk already in 2018. However, the bank backed down before launching the trading desk as the crypto market crashed that year.

Ethereum can settle $1.6trn this quarter

The biggest cryptocurrency measured on the value settled on its chain, Ethereum, is on track to settle $1.6trn this quarter on its chain, according to on-chain research from Messari. Ethereum is mainly used to settle stablecoins and decentralized finance protocols. Therefore, the number is not only measuring the settlement of its native token called Ether - but all transactions and tokens transferred on the network. As of 24 February, the network had settled $926bn worth of transactions, already 700% more than what it accomplished in the whole of Q1 2020. This surge in transactions has contributed to new all-time high fees on the network. Last week, the average fee per transaction reached a new all-time high of $40. As a direct result of the high fees, many are concerned that Ethereum will lose its first-mover advantage to rival chains in the smart contract crypto-space, something we wrote about last week. Many rival chains are simply more scalable compared to Ethereum for now until at least the highly anticipated ETH 2.0 upgrade launches, which will make Ethereum significantly more scalable.

BTC against USD. Source: CoinMarketCap.
ETH against USD. Source: CoinMarketCap.

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.