Bitcoin Tops $52k as Ark Invest Dumps Coinbase Shares
Coinbase shares surged after the firm reported its first quarterly profit in two years
By: André Beganski
February 19, 2024
GM! This week: Bored Ape Yacht Club maker Yuga Labs acquires Proof, ARK Invest dumps Coinbase shares after a better-than-expected quarter, MicroStrategy’s Bitcoin bet eclipses $10 billion, and OpenAI’s new video generator boosts Sam Altman’s Worldcoin.
Yuga Labs’ Proof
Bored Ape Yacht Club maker Yuga Labs announced Friday that it had acquired Proof, an NFT firm recognized for its profile-picture collection Moonbirds. Founded in 2021 by entrepreneur Kevin Rose, Yuga declined to say how much it had acquired Proof for, or how it plans to leverage Moonbirds besides folding the collection’s IP into Yuga’s Otherside metaverse project.
A spike in Moonbirds trading volume prior to Yuga’s announcement sparked insider trading concerns on X, as Crypto Twitter onlookers scrutinized sales on the NFT marketplace Blur. Meanwhile, the NFT collection Pudgy Penguins briefly overtook Bored Apes in terms of floor price this weekend, putting pressure on the beleaguered blue-chip NFT collection.
The competition between Bored Apes and Pudgys may be heating up, but it appears to be a healthy one, according to a post from Wylie Aronow, a.k.a. Yuga co-founder Gordon Goner, on X. On Saturday, he said, “Finally, a worthy opponent,” about Pudgy’s recent rise.
ARK Dumps Coinbase
Cathie Wood’s ARK Invest sold $90 million worth of Coinbase shares Friday — cashing in after the San Francisco-based exchange posted better-than-expected financial results for its fourth fiscal quarter. Climbing as high as $180 on Friday, ARK’s move came as Coinbase shares surged 28% last week.
Coinbase’s fourth-quarter profit of $273 million represented its first period of positive net income in two years. And, ahead of several spot Bitcoin ETFs’ approval in January, the exchange said retail investors started flocking back to its platform. Consumer trading volume grew 164% quarter-over-quarter to $29 billion in the three months through December, Coinbase said.
One area of growth that stands out for Coinbase is an increase in revenue for subscriptions and services. Bolstered by revenue from the assets backing Circle’s stablecoin USDC, Coinbase’s subscriptions and services revenue grew 78% in 2023 to $1.4 billion.
FOMO?
The fear of missing out on Bitcoin is coming back, and the trend could send the coin to fresh all-time highs, according to analysts at asset manager AllianceBernstein. Pointing to the potential impact of spot Bitcoin ETFs on Bitcoin’s price, the firm said enthusiasm for the newly-listed products could create a so-called FOMO rally for crypto’s largest coin.
With Bitcoin up 25% over the past week, one could argue that the asset is already experiencing FOMO-related price action. But investors don’t fully appreciate how the approval of spot Bitcoin ETFs and Bitcoin’s halving, slated for April, will cut down on Bitcoin’s supply while supporting increased levels of demand, the firm’s analysts said.
In the beginning, crypto onlookers were quick to sour on spot Bitcoin ETFs, as Bitcoin fell as low as $39,500 after the class of products was approved. Yet, with outflows from Grayscale’s Bitcoin Trust waning, investors have grown more positive as inflows into other spot Bitcoin ETFs persist. For example, weekly inflows into digital asset investment products reached a record of $2.45 billion last week, according to data for CoinShares.
MicroStrategy’s Big Bet
MicroStrategy’s Bitcoin holdings were valued at $10 billion last week, as the coin climbed to its highest price since late 2021. In terms of the company's profit on paper, MicroStrategy is now up $4 billion on its position, purchasing 190,000 Bitcoin for an average price of $31,224 per coin.
As Bitcoin climbs, Michael Saylor’s bet on Bitcoin looks better and better. But instead of dunking outright on publications like the Wall Street Journal that showcased how deep in the red MicroStrategy was at one point, Saylor just said he’s still “betting on Bitcoin” on X last week.
Meanwhile, Tesla’s Bitcoin stash is also becoming more valuable. According to the website bitcointreasuries.net, the automaker has owned 9,720 Bitcoin since June of 2022, and its Bitcoin holdings are now worth more than $500 million. But, if the firm had never touched the 43,200 Bitcoin it originally bought in 2021, that position would be more than $750 million in the green, with an average cost of $38,800 per Bitcoin for Musk’s Tesla.
Sora Shines on Worldcoin
Following the reveal of OpenAI’s text-to-video model Sora, the Sam Altman-linked crypto project Worldcoin has seen its associated WLD token surge 180% over the past week. While the two projects aren’t related to each other, Worldcoin is the only crypto project that Altman is connected to, as a crypto-powered digital ID solution known for scanning people's eyeballs.
The excitement surrounding AI has pushed stocks like Nvidia to all-time highs, and even though Ikigai Chief Investment Officer Travis Kling has his doubts, he does see AI as a powerful driver in the crypto space as well. However, he believes that most AI-related crypto projects go down as pump-and-dumps — much like other crypto projects touting novel utility in previous cycles.
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