BTC Makes New ATHs, COIN Listing

Just like any other day, I woke up this morning and immediately checked my phone. This morning was a little bit different as right away I saw that my results were in for the COVID test I took yesterday… to check the price of Bitcoin or my results… I opted for the latter and was happy to see that I’m all set for my flight back to Florida on Sunday! In terms of happiness I was 1 for 2 after seeing that Bitcoin was quite a bit lower than it was before I went to bed.

Aside from a little cool off this morning, Bitcoin has had a truly historic week. Drafting off of the Coinbase direct listing, Bitcoin broke through previous ATHs of $62k and proceeded to smash through $63k before breaking through $64k, briefly overtaking the British pound sterling as the 6th largest currency in the world.

What we saw at the desk

This week was one of the busiest weeks we’ve had to date as clients acted ahead of the Coinbase listing. Some clients bought the news, some sold the news. Net net the buy-side outweighed the sell-side and Bitcoin once again dominated the flows followed by Ethereum who, in tandem, broke its ATHs.

Reporting on trading action is important, but what I think matters more is onboarding new clients and that is what this week was all about. The Coinbase hype helped bring a lot of new clients in who all seemed to have the same story of being a neophyte but knowing that Bitcoin, in particular, is important and they want to dip their toe in the water. Love to hear it.

Coinbase direct listing & how it might affect the price of Bitcoin.

On Wednesday, Coinbase directly listed on the Nasdaq at a valuation over $100 billion — valued higher than NYSE & NASDAQ combined ($93 billion) — before ending the trading day at $85.8 billion after an impressive debut.

12 years ago, Brian Armstrong and Fred Ehrsam founded Coinbase out of a small loft in San Francisco.

I’m really excited for what’s to come for Satstreet. Sadly, our commemorative picture of our early team grinding it out will be from a screenshot of a Google Meet video call — maybe we can turn it into an NFT?

All joking aside, this was a historic moment for our industry. It really highlights how far we’ve come and it paves the way for greater institutional exposure and adoption.

How will this reflect on the price of Bitcoin and the broader crypto market? In my mind, I’ve sort of boiled it down into two viewpoints.

The first being that investors might look at Coinbase as a safer bet than investing directly into the underlying assets that it pseudo represents (Bitcoin and other cryptos). This would clearly be a detractor in price as we would see outflows from the crypto market and inflows into COIN stock. The reasons why investors may look at Coinbase as a safer bet are understandable. They might look at Coinbase as a benefactor of volatility to the upside and to the downside because the company makes the majority of their revenue from trading fees which occur in up markets and in down markets. Also, they might view Coinbase as a proxy to the price of Bitcoin and the broader crypto market which comes without any technical headaches (ex. self-custody) or counterparty risk (ex. exchange hacks).

The second, more bullish case, being that Coinbase just printed many new millionaires, decamillionaires, centimillionaires, and a few billionaires who, assumingly are fans of crypto. This new money will likely flow into the market and my guess is that a healthy amount will move into Bitcoin for safekeeping while the DeFi space might get a boost from young techies who can finally make their rent in San Fran AND have leftover money to play with.

Furthermore, I think investors who got excited about the listing might realize that it is really hard to truly get a feel for Coinbase’s astronomically expensive valuation. I’m not saying that it’s not well deserved. I’m just saying that there are some risks that come from moving out of a decentralized asset like Bitcoin into a centralized company like Coinbase. Also, if Coinbase is being valued as high as it is based on the revenues in a raging bull market, what happens when things quiet down? In addition, Coinbase has some of the highest trading fees in the market; surely these fees will be compressed?

Investors who are already in the market or who are looking to enter the market have a lot to analyze when considering the upside of investing in COIN vs. Bitcoin. Amidst all the fog, one thing remains true: there will only ever be 21 million bitcoin.

In case you missed it…

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Satstreet serves private Canadian clients including some of the largest Bitcoin mining operations, institutions, and high net worth individuals. Satstreet has raised initial funding from Round13 Capital and several prominent investors.

Privacy. Security. Best Price Execution.

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Co-Founder @ Satstreet

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Mike Nasser

Mike Nasser

Co-Founder @ Satstreet

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