Tesla's $1.5B Bitcoin Purchase; Coinbase's S-1 Filing and $100B Valuation; PayPal's Crypto Biz Beating Expectations & More

Hey, ?? fellow Blockchain & Cryptocurrency enthusiasts! Trust you are keeping all well and safe, and haven't lost your minds in quarantine ??

It's been a while since the last monthly recap. But I have some great news for you - this is the most interesting Month in Blockchain & Crypto thus far!

P.S. Before we dive into what happened in Blockchain & Cryptocurrency in December, check out my Connecting the Dots Newsletter, where you will get much more. Every Week (February & March editions are out there)????

February was super busy both personally and for the Blockchain and Cryptocurrency industry (therefore, the monthly issue comes late ??). One of the biggest news of the month was undoubtedly Tesla’s announcement that they bought $1.5 billion worth of Bitcoin causing the world to go nuts ?? ; also, Coinbase has made its S-1 filling public providing valuable insights into the crypto giant’s business ??, while its valuation is close to $100 billion in private markets ??, and more super exciting developments and insights!

Without further ado, let us dive into what has happened in the new age of finance last month. Let’s connect the dots.

PayPal’s Cryptocurrency Business Has Beat Expectations

Customers who bought crypto through the platform have been logging in twice as much as they were before, according to PayPal.

The first week of February was about PayPal. In the final quarter of 2020, payments giant PayPal has gained 16 million in net new active accounts and handled $277 billion in total payment volume.

Launched late last year, PayPal’s crypto services – buying, selling, and transacting – volumes have greatly exceeded the firm's initial projections, according to the CEO.

Customers who purchased crypto through the platform have been logging into PayPal twice as much as they were before buying crypto, the company said in its investor update.

Further, PayPal’s transaction revenue increased by around 12% from Q3 to $5.7 billion. The company also notes it will recognize transaction revenue from its crypto buys, sell and hold product, but it will not include transactions related to crypto in its total payment volume.

THE TAKEAWAY

PayPal is doubling down on crypto. And this isn’t about trading, what is interesting is that PayPal has a 26 million merchant network, and this is where the biggest opportunities sit. More importantly, PayPal has recently launched a dedicated Bitcoin & crypto unit, which should further increase their efforts and footprint in the space.

Tesla Buys $1.5B in Bitcoin, Plans to Accept it as Payment

Tesla announced in an SEC filing Monday that it has bought $1.5 billion worth of bitcoin. The company also said it would start accepting bitcoin as a payment method for its products.

The 2nd week of February was all about Elon & Tesla. Elon Musk has been making crypto headlines. Again. This time though the markets, the headlines, and the whole world moved a Bit after Tesla revealed it has invested $1.5 billion into Bitcoin, the most popular and valuable cryptocurrency right now.

Tesla also said that it might start accepting cryptocurrency as payment for its cars. Crypto maximalists were shouting out loud while Bitcoin surged as much as 20% following the announcement.

One must note that Tesla is not the first company to get in on Bitcoin, but its move is one of the biggest thus far, and might probably be one of the most important ones too.

Note: dive deeper into this on a separate article - Making Sense of Tesla's $1.5B Bitcoin Buy

THE TAKEAWAY

Tesla is the first Fortune 500 company to diversify cash holdings into cryptocurrency. Hence, it can be viewed as a strong vote of confidence and a potential signaling effect for other companies to do the same. If that happens, the long-held narrative that Bitcoin acts as a reserve asset will finally be validated, further fueling the positive feedback loop. If not, the opposite might hold true.

Coinbase is Worth at Least $100 Billion

Coinbase stock traded at an implied valuation of $100B on the 3rd week of February, according to Nasdaq Private Market data.

The third week of the month was all about Coinbase. Cryptocurrency exchange Coinbase, which is preparing to trade publicly in the next few months, is being valued at over $100 billion, based on the trading of the company’s privately held shares on a secondary market. 

Data from Nasdaq Private Market shows a secondary market this week for Coinbase equity saw an average clear price of $373 per share, which would value the firm at $100.3 billion. This is greater than Intercontinental Exchange, the owner of the New York Stock Exchange.

The Coinbase private market sale allows current and former employees, as well as investors in Coinbase, to take some cash off the table. Around 254 million shares in Coinbase will be outstanding and available to trade when the firm goes public.

It appears that I was too conservative when giving Coinbase’s price tag earlier…

THE TAKEAWAY

Coinbase is undoubtedly one of the most anticipated IPOs this year. Rallying Bitcoin and Ether only adds fuel to the fire… If we believe in the secondary markets, at $100B IPO Coinbase would be the 6th largest publicly traded financial institution in the US. Let that sink in… ??

Coinbase's S-1 Filing is Now Public

Coinbase’s S-1 filing with the Securities and Exchange Commission is now public. The S-1 offers an unprecedented look at Coinbase's business, with the disclosures effectively serving as its pitch to investors. 

The last week of the month was all about Coinbase too… It must be reminded that a confidential draft of the document was submitted to the SEC in mid-December. It was made public on 25 February.

"Coinbase intends to list its Class A common stock on the Nasdaq Global Select Market under the ticker symbol 'COIN'," Coinbase said in a blog post Thursday.

S-1 offers a unique look at Coinbase’s business, which has been speculated about for a while. These are the most interesting bits and pieces:

• Coinbase posted $1.1 billion in net revenue in 2020. It has more than doubled when compared with $482.9 million in 2019.
• Coinbase had 43 million verified users as Q4 2020, including 2.8 million monthly transacting users.
• The percentage of retail volumes at the exchange fell from 80% during the Q1 of 2018 to just 36% in Q4 of 2020.
• Coinbase holds Bitcoin and other cryptocurrencies on its balance sheet.
• Coinbase has considered issuing equity securities “in the form of blockchain tokens.”

THE TAKEAWAY

Coinbase S-1 is now public, what's next? Quick answer - probably the biggest IPO this year. Coinbase was already a success story, way before the institutional interest kicked in. Given the current circumstances and market conditions, it really couldn't find a better time to be going public. Watch out, this will definitely be the biggest IPO this year.

Quick Takes

• According to different sources familiar with the matter, IBM is reportedly carrying out a reorganization, which has seen the company slashing its blockchain workforce. One of the sources who interviewed former employees of the IBM unit stated that with many of the members gone, IBM could be left without a blockchain team.
• Gemini is offering a 7.4% yield on customer deposits, teaming with crypto lender Genesis. 
• Crypto exchange Bitfinex says it has repaid Tether the remaining loan balance of $550M.
• The Chicago Mercantile Exchange (CME) has launched its much-anticipated futures contracts for ether (ETH), the native cryptocurrency of the Ethereum blockchain network.
• Mastercard will allow customer-to-merchant payments in cryptocurrency this year without the need to settle in fiat.
• BNY Mellon, the world’s biggest custodian bank, will allow customers to custody crypto by the end of the year. It’s working with unnamed outside partners to build out the offering.
• Blue Ridge Bank appears to be the first and only American bank to let users buy Bitcoin from their ATMs.
• Amazon is preparing to launch a “digital currency” project in Mexico. The e-commerce giant has posted a number of job offerings, describing the project, spearheaded by Amazon’s Digital and Emerging Payments (DEP) division.
• Zug, Switzerland, has started accepting tax payments in cryptocurrency, partnering with Bitcoin Suisse.
• Bitcoin may be a better investment than Gold, says DoubleLine CEO Jeffrey Gundlach
• Ahead of its Q4 earnings call on Tuesday, Jack Dorsey’s Square announced it had purchased an additional 3,318 BTC as a reserve asset.

??Money Moves??

• Polychain has led a $1.1M seed round investment in privacy-oriented decentralized exchange Manta Network.
• Opyn, a decentralized finance platform for options, has raised $6.7M in a new Series A funding round.
• Casa, a startup that helps crypto investors manage their private keys, has closed a $4M seed round.
• Axoni said Monday that it has closed a new round of funding worth $31M, bringing its total amount raised to $90M since its inception in 2013.
• SynFutures, which just raised a $1.4M seed round, wants to bring real-world asset trading to DeFi.
• Popular non-fungible token (NFT) marketplace Rarible has raised $1.75M in a seed round.
• A new $72M crypto venture capital fund has been announced, drawing a mix of deep-pocked investors including billionaire Paul Tudor Jones.
• 0x Labs, infrastructure provider for decentralized exchanges, raises $15M Series A. The round was led by Pantera Capital, with participation from Jump Capital, Coinbase Ventures. Blockchain.com VenturesQuote of the Month/??Food for Thought??
• Crypto financial services firm Ledn has raised $2.7M in a seed extension round backed by Coinbase Ventures and others.
• 0x Labs, the startup behind the eponymous decentralized exchange protocol and a provider of DEX infrastructure, has raised $15M in a Series A funding round.
• NFT-focused startup Dapper Labs is raising $250M in a new funding round led by Coatue Management.
• Nexus Mutual raised $2.7M in a token sale.
• Async Art, a platform for creating and trading NFTs, has raised over $2M in seed funding.
• Blockchain.com raised $120M in fresh venture financing from “macro investors” including Moore Strategic Ventures, Lightspeed Venture Partners, and Google Ventures.
• Bitcoin payments platform for social networks Bottlepay raised ￡11M.
• Crypto custodian Anchorage has raised $80M in a new funding round.
• Ethereum scaling startup Optimism raises $25M Series A led by a16z. 
• NFT marketplace Sorare raises $50M in Series A led by Benchmark. 

Quote of the Month/??Food for Thought??

Can we see the big correction again? ??

Graph of the Month

Just leaving this one here.

February in Brief

Customers who bought crypto through the platform have been logging in twice as much as they were before, according to PayPal.

Tesla announced in an SEC filing that it has bought $1.5 billion worth of bitcoin. The company also said it would start accepting bitcoin as a payment method for its products.

Coinbase stock traded at an implied valuation of $100B on the 3rd week of February, according to Nasdaq Private Market data.

Coinbase’s S-1 filing with the Securities and Exchange Commission is now public. The S-1 offers an unprecedented look at Coinbase's business, with the disclosures effectively serving as its pitch to investors. 

If you found this valuable, don’t forget to share it with others!

Continue reading by subscribing to Connecting the Dots Newsletter. You will receive fresh news about Blockchain & Cryptocurrency with hot takeaways every week (Feb & Mar editions are out too!)

P.S. You might enjoy my earlier pieces as well:

?? The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company

?? Cutting Through the Noise: Bitcoin Fundamentals & Why it Was Created

***

About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

If you've enjoyed this piece, don't hesitate to press like, comment on what you think, and share the article with others. Let's spread the knowledge together!

For more, hit the subscribe button, follow me on LinkedIn & Twitter. I'm building the best community the social world has ever seen!????