| | Good afternoon. The day after our last issue, bitcoin flash crashed, plummeting below the $26,000 mark. As a result, investors quickly got spooked, leading to $1 billion in liquidations across the market. | People blamed soaring bond yields and the prospect of "higher-for-longer" interest ratesβ¦ Evergrande, a big China property developer, filing for bankruptcy protectionβ¦ and even SpaceX, reportedly βmarking downβ (not selling) all its bitcoin (~$393M worth). | Still β nearly one week later β no one knows what happened. Our take? There were more sellers than buyers. π | Todayβs Big Stories: π Coinbase acquires an equity stake in Circle π This altcoin is goin to the moon!!! | Today's newsletter is 1,124 words, a 4.5-minute read. |
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π MUST READS |
| Coinbase Tries Squaring a Circle |
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Coinbase is officially acquiring a stake in USDC stablecoin issuer Circle, according to joint announcement from the two companies. |
Although the companies technically cofounded USDC in 2018, they operated as two separate companies. But thatβs now changed as Coinbase will own a yet-to-be disclosed equity stake in Circle going forward. |
Furthermore, Coinbase will begin receiving a larger percentage of the interest revenue generated by USDC. Prior to Monday (and as we discussed in Coinbaseβs Q2 earnings outlook), Coinbase and Circle had a revenue split only based on the amount of USDC on their respective platforms. |
Going forward, the two companies will also βnow equally share in interest income generated from the broader distribution and usage of USDC,β as opposed to Circle having the larger share. |
So letβs review: |
Whatβs the deal mean for Coinbase? Although the company was quick to announce that the deal would have no meaningful impact in this quarterβs earnings, we know that the deal only helps. |
As The Street continues to demand less volatility and more diversification in Coinbaseβs revenue, the new deal helps create a more predictable stream of revenue for the company. |
What does the deal mean for Circle? Well, probably more revenue as the deal may lead to an increase in USDCs market cap. |
Which β speaking of the USDC market cap β it is bleeding out all over the stablecoin ecosystem. Although USDC is the worldβs second largest stablecoin, it has been steadily losing market share since March. Thatβs when Circle revealed that it had more than $3 billion of itβs reserves stuck at SVB, causing USDC to briefly depeg. |
And while USDCs market cap has fallen from $44 billion to just under $26 billion, the largest and most controversial stablecoin, USDTs, marketcap has risen to $83 billion. |
TLDR: USDC isnβt losing in the grand scheme of stablecoins, but it certainly isnβt winning either. |
But more importantly, the company will be able to focus on what it does best β issuing stablecoins. Thatβs why, the equity announcement was pared with an announcement that USDC will quickly be launching on six other blockchains. What the deal means in regards to any future public offering Circle though remains to be seen. |
What does the deal mean for stablecoins? Further entrenched competition. We canβt forget that just a few weeks ago, PayPal announced their somewhat odd PyUSD stablecoin. Quasi-like CBDCs are going to continue to emerge from traditional finance. Itβs up to crypto to compete. |
What does the deal mean for crypto? We know that we speak to almost entirely western based readers here in CoinSnacks. Furthermore, we also know that many of our readers are just looking to make a buck (see story below). But please donβt forget that crypto also has the power to help billions of people. Hyperinflation, double-digit remittance fees, slow moving moneyβ¦ these are only a few things that stablecoins can help solve. |
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| This Altcoin Is Going To The MOON! |
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So last week, we did a poll asking our friendly CoinSnacks readers (thatβs you!) what type of content theyβd like to see more of. |
Here were the results: |
| Reader responses to the question of: βWhich commentary would you like see more of?β |
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Honestly, pretty good insight on our end. I mean, we didnβt realize we were talking to so many altcoin, get-rich-quick degens! |
No, no β just kidding. We respect the honesty. Plus, we somewhat agree with you as the prospect of new and emerging altcoins is a thrilling facet of todayβs crypto economy. |
The more you stay in the know on todayβs rapidly evolving industryβ¦ the more comfortable you are taking nibbles here and there on obscure, or perhaps, off-the-beaten-path altcoins that stand the chance to 10x faster than any traditional asset or stock. Itβs loads of fun. Plus, and speaking from experience here, you often learn a lot too in the process. |
With that said, you may be asking yourself, βwell, where the heck are all the altcoin stories then?β |
In which, our answer would beβ¦ βitβs complicated.β |
1.) We write about what we can understand. The truth of the matter is that 99% of altcoins out there we can't wrap our heads around. Not that we arenβt smart enough to, no, it's that they fundamentally donβt make sense. In other words, we stick to what we know. What we know is that bitcoin represents a fundamental shift in money. And we know that blockchain technology and projects like Ethereum represent a fundamental shift in compute. |
Now there will be plenty of altcoins that pop up that we believe in. For sure, we have covered some of them in CoinSnacks, but we could count the ones we stand behind on two hands. |
2.) In times like today, thereβs a lot more to avoid than to gain exposure to. Again, thereβs a reason we never fully jumped on the DeFi, NFT, or Web3 hype train. Thereβs a reason we werenβt salivating over SOL, DOGE, SHIB, or any of the other maniaβs. And thereβs a reason weβre not pausing our entire afternoon to tell you about the latest flavor of the week, Friend.tech. |
Apart from participating in a fun (and hopefully affordable) gamble, we find that the long-term prospect of these altcoins or trends is relatively weak. Take a hard look at the entire list of tokens and try to explain why our economy needs 20 different layer 2βsβ¦ 400 different DeFi tokensβ¦ 200 smart contract protocols... 250 meme coinsβ¦ over 100 different lending and borrowing protocolsβ¦ 140 different decentralized exchanges. Do you get our point? The industry is due for massive consolidation. |
3.) Distractions can be costly. When we began CoinSnacks in 2017, bitcoin's value hovered around $3k. If we'd invested our funds solely in the majors, by now we'd have witnessed an astounding ~1,000% growth. Such transformative returns didn't require investments in tokens like Cindicator, Enjin Coin, or NEO (remember those?) |
At the end of the day, Coinsnacks is a letter for investors... for believers. |
If you want the next coin to the moon, we are simply the wrong newsletter for you. |
And if you are looking to day trade, we are definitely the wrong newsletter for you. |
But if you want no BS highlights of the most important things happening in crypto that impact the real world, plus with a spin of government kleptocrat critique, we're your guys. |
Going full circle: If we just shat on your altcoin parade β donβt take it personally, and donβt take offense to it. As we mentioned earlier, despite the dangers, the altcoin market still serves as a great avenue to find gems that can 100x. We just donβt play that game. |
If you do play that game, though, some words of advice: diversify, diversify, diversify. Stay away from Binance. Donβt hold onto sketchy stablecoins. And you should probably load up now, while weβre in the trenches and before another βaltcoin seasonβ arrives. |
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SPONSORED | 7 Major Coins to Avoid & 3 to Considerβ¦ | When it comes to Cryptoβ¦ | Nilus Mattive β a 20-plus year Wall Street veteran says these 7 cryptos could go to zeroβ¦ | But he also believes investors should consider taking advantage of three lesser-known cryptocurrencies, including one that was recently trading for less than $1. | Click here to hear him explain why. |
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TWEET OF THE WEEK |
| The Kobeissi Letter @KobeissiLetter | |
| The US government has already spent $5.3 TRILLION this year. We are on track for the 4th consecutive year with $6 trillion or more in government spending. Since 2020, the US government has spent a jaw dropping $25 TRILLION. To put this in perspective, the market cap of the S&Pβ¦ httptwitter.com/i/web/status/1β¦p | | | Aug 22, 2023 | | | | 2.32K Likes 716 Retweets 156 Replies |
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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 ~30,000 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. |
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