| | | Good afternoon. On the heels of Ripple’s landmark win against the SEC (see our thoughts below), it seems as if crypto – dare we say it – is about to rally? No, in all seriousness, what’s stopping it? It’s been a full year since Terra//SBF//etc. The Celsius’s//3AC’s of the world are officially kaput. Spot bitcoin ETFs are launching in Europe and are finally getting serious considerations in the US (with heavy institutional backing). Exchange volumes are soaring back. And crypto is quickly decoupling from the S&P 500. | Since we’ve started writing CoinSnacks in 2017, every now and then the ongoing narratives paint a fascinating outlook – a moment in time where there seems to be nothing on the short-term horizon that could really stifle market momentum. After this week’s news, we feel as if that sentiment has returned. | How are you feeling about the crypto market? | | 🚀 Bullish😐 Neutral👎 Bearish🤖 Don't care - I'm all in on AI now | Today’s Big Stories:
📜 Landmark crypto ruling sends tokens soaring
📰 Coinbase’s busy week | Today's newsletter is 711 words, a 4.5-minute read. |
| |
| | |
|
📌 MUST READS |
|
A lawsuit nearly four years in the making has finally come to a close and the impacts are already rippling throughout the crypto markets. |
On Thursday of last week, Ripple Labs defeated a significant part of the SECs landmark case over its sale of more than $1.4 billion worth of the popular XRP cryptocurrency. |
Ripple Labs had spent hundreds of millions of dollars arguing that more than half of its token sales did not violate investor protection laws, and that XRP is simply a token developed to facilitate cross-border payments. In short, Ripple Labs argued that XRP is not a security. And, surprise surprise, U.S. District Judge Analisa Torres agrees. |
A Small Caveat
To clear up any confusion, let’s quickly discuss what the part about “more than half of its token sales” means. |
It turns out that although the judge agreed that sales on exchanges (i.e. retail trading) do not violate the Howey test (a legal test used in the United States to determine whether a transaction qualifies as an investment contract), other sales did violate securities laws. But, these violations were primarily around institutional sales. |
You see, the judge put XRP sales into three distinct buckets: |
Institutional sales (illegal): The judge stated that because Ripple provided institutions investment materials and contracts, it indicated an investment intent rather than a consumptive focus. |
Programmatic sales (legal): These are simply sales of XRP on exchanges. The judge ruled that individuals had no way to know who they were buying the tokens from and furthermore there is no proof they were buying them for investment purpose. |
Other distributions (legal): These are things like paying for services in XRP from Ripple. |
But to cut to the chase… |
Here Is All That You Need To Know
Overall, the ruling concludes that the way XRP was sold in certain circumstances is illegal, but that XRP itself is not a security. |
Perhaps to put it even more simply, the XRP token is NOT a security, but certain transactions of the token can be. |
As a result, the crypto market rallied with the price of XRP rising more than 70% and Coinbase (COIN) shares rising 25% after the decision was issued. |
Honestly, the entire market moved higher after the news. |
If XRP is deemed not a security, others (like SOL) could be deemed not a security as well. Beyond the brighter regulatory clarity (and a step toward better token classification), the ruling gave a short-term green light around sales via exchanges. |
It’s why exchanges like Coinbase, Kraken, and Gemini, quickly re-listed XRP after the ruling was determined. |
As we wrote 10 months ago when it looked like the lawsuit was coming to a close: |
“This is a case not just for [Ripple] but for all of crypto.” |
|
|
|
SPONSORED | Buy only these 5 AI stocks | Beakthrough innovations like ChatGPT are just the tip of the iceberg in the coming $87 trillion AI revolution. | Startups are being funded at a crazy pace, and AI is 2023's hottest topic. | But legendary investor Whitney Tilson urges caution. | In fact, he reveals the ONLY 5 AI stocks he thinks you should buy right now. |
|
|
|
🔎 DEEP DIVES |
| | Coinbase News Lost In The Hoopla |
|
|
While all eyes were on Ripple last week (and for good reason), there was plenty of other news surrounding Coinbase that got lost underneath the headlines. |
Coinbase Pauses Staking In Four States
Coinbase has announced that users in California, New Jersey, South Carolina and Wisconsin are no longer allowed to stake new digital tokens on its exchange (anything staked prior to the announcement would remain though). |
The move follows the SECs lawsuit from last month, alleging that the Coinbase’s Earn staking program is an unregistered security. |
The removal mainly comes as a result of the “show-cause order” that was issued by 10 states warning Coinbase that its staking product does not comply with securities rules. |
While this is negative news for these four states, it is positive news for the other six where Coinbase worked with policymakers to protect the staking product. |
Coinbase continues to stand by their staking product especially as it accounts now for more than 10% of the company’s revenue. |
Coinbase Releases Decentralized Messaging Feature
What do you get if you combine encrypted messaging such as from the likes of Telegram and Signal, with payment apps such as from Venmo or Cash App? |
Answer: Coinbase’s new decentralized messaging feature. |
This week, Coinbase launched messaging on their Coinbase Wallet feature, allowing anyone to send secure messages to and from wallet addresses on the platform. The feature, which was established in partnership with web3 communications firm XMTP, is a brand new way for people to engage with crypto beyond trading. |
What’s more, the feature also allows users to send USDC to other users without incurring any gas fees. |
“So what?” You might be saying… |
Well, this development adds to a string of recent releases from Coinbase allowing users to interact with crypto in novel ways. |
Furthermore, by offering encrypted messaging and on-chain identity verification, it can help alleviate some of the scams that so many potential users are worried about in crypto. |
|
SPONSORED | Elon reveals biggest cover-up of the century? | Elon Musk has put a target on his back. | And even though you may not know it, or even care… | The coming war on Elon Musk is going to have a direct impact on you, your family, and your financial investments in the years to come. | In this new exposé, you’ll learn what it is that Elon has been advocating, why it’s put him in the crosshairs of an ideological war, and how you can profit from it. | Check it out here… |
|
|
|
TWEET OF THE WEEK |
| The #Bitcoin Realized Cap currently sits just shy of $400B, indicating that a steady stream of capital is entering the asset throughout 2023. As the realized cap climbs, it signals that coins are changing hands at higher prices on net, suggesting a modest uptick in new demand… twitter.com/i/web/status/1… | | | | Jul 18, 2023 | | | | | | 609 Likes 139 Retweets 30 Replies |
|
|
|
| Join Us On Our Newest Venture | Nervous about market volatility? We've found a solution that thrives no matter which way the market sways: high-yielding dividends.
We've put together a list of our Top 5 Dividend Stocks Paying 10%+ Yields. Click to download & to start receiving our new daily newsletter on all things traditional finance (without the fluff). | Sponsored |
| |
|
|
Other Content You Might Enjoy |
Europe's first spot Bitcoin ETF has been scheduled to launch within July after a 12-month delay Pantera Capital: Bonds Down, Crypto Up BNB Token Is Being Heavily Shorted, Perpetual Futures Show Ethereum Q2'23: State of the Network Inside Liberland: Europe’s Bitcoin micronation Binance money processor Advcash looks like a Russian laundering operation Coinbase’s Brian Armstrong to Meet House Democrats RFK Jr. Announces Bold Plan to Back Dollar With Bitcoin, End Bitcoin Taxes Polychain raises $200 million for fourth crypto VC fund, shakes up staff Will the SEC challenge the court’s Ripple ruling? Here’s what lawyers think Binance has let go of over 1,000 employees in recent weeks |
|
How did you like today's email? |
| ⚡⚡⚡⚡⚡ Love it⚡⚡⚡ Ehh, could be better⚡ Do better next time |
|
ABOUT COINSNACKS |
Launched in December 2017, CoinSnacks is home to the longest continuously running crypto newsletter. Each week, we publish our cryptoasset musings to an audience of ~60,000 crypto enthusiasts and investors. |
In a space flooded with new projects, research, and narratives, the average investor may feel overwhelmed or confused. CoinSnacks offers a solution by doing the digging for you, so you don't have to spend hundreds of hours sifting through the noise. |
|
REACH OUR AUDIENCE |
If you’re a brand interested in partnering with CoinSnacks to find your next customers, parter, or ally, we’d love to hear from you. Learn more here. |
