Coinbase shares pop after posting first quarterly profit since Q4 2021: CNBC Crypto World

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Crypto World explores what it means for the industry, markets and customers with tied up funds now that several crypto companies are emerging from bankruptcy.

Chapters:
00:00 – CNBC Crypto World, Feb 16, 2024
0:25- Bitcoin maintains $52K
0:53- The headlines
5:19- Crypto bankruptcies

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Coinbase shares pop after posting first quarterly profit since Q4 2021: CNBC Crypto World

Today coinbase shares pop after the company posts its first quarterly profit in 2 years we bring you an inside look at the Africa Tech Summit in Nairobi Kenya and as several crypto companies begin to emerge from bankruptcy we explore what it means for the industry markets and for customers with tied up

Funds welcome to cnbc’s crypto world I’m Jordan Smith crypto prices in the red to end the week cover Bitcoin still traded above $552,000 as of new Eastern the cryptocurrency dipped less than half a percent compared to the day before ether dropped more than 1 and a. half% to the

$2,700 level after Crossing $2,800 yesterday for the first time since May 2022 and salana fell more than 4% to $19 for the week bitcoin’s up more than 9% while ether jumped nearly 12% all as of new Eastern all right let’s talk about the top stories coinbase shares surging

Today after the company posted its first quarterly profit in 2 years years the largest US venue for buying and selling crypto revealed yesterday after the Bell that net income total $273 million in the fourth quarter the profit was driven by broad expectations that macroeconomic conditions will improve this year and

The approval of the first spot Bitcoin ETFs in the US the majority of the 10 currently trading spot Bitcoin ETFs use coinbase for their Bitcoin custodian for anybody worried about cannibalization ETFs have been positive for the industry which has been additive for coinbase we’re seeing elevated engagement and net

Inflows across both retail and institutional q1 to date what’s even more important is that every institution is now starting to hold crypto the asset class will be a standard part of every Diversified portfolio coinbase said that its net revenue was $95 million in the fourth quarter up nearly 50% from the

Same period last year it said transaction revenues were the primary driver of revenues for the last quarter of 2023 and added that subscription and services Revenue remained relatively flat the company added that consumer trade in Revenue was nearly $500 million for the quarter that’s up 79% from the

Quarter before in an exclusive interview with CNBC yesterday coinbase’s Chief Financial Officer said that the company didn’t have to adjust fees to account for the higher volumes coming through the platform a lot of the results of our fee rate is just the mix shift on our platform who traded what product in the

Quarter and so in Q4 when we saw higher volatility we grew simple trading but Advanced grew more and so the growth of those advanced trading customers and the volume per Trader led to the fee rate coming down on average in the quarter but it’s purely mix shift just math no

Change to fees in the fourth quarter coinbase shares soared more than 15% by midday today next crypto companies investors and a whole lot more came together to discuss leading technology Innovations at the Africa Tech Summit in Nairobi Kenya that event wrapped up yesterday and crypto world’s Mackenzie

Sallos was there to find out why stable coins are getting so much attention at The Summit I’m here in Nairobi for the Africa Tech Summit where I’ve been speaking with CEOs from across the continent about everything from generative AI Integrations into banking to the latest Innovations in crypto Defi

And fintech across Africa Visa AWS and stripe are all here plus some of the biggest local players and crossborder payments Now by far the biggest topic of the conference is the mass adoption of us dpeg stable coins in Africa so we use stable coins like Teta USD to move money

From one place to another so moving money from the African continent out and even within Africa one reason why stable coins are so disruptive in Africa is the fact that there’s virtually no access to Dollars across the continent so if you go to a bank and need to make an

International payment you can’t really do that the traditional Financial infrastructure in part because there is very little liquidity of local African currencies what stable coins like usdc are doing is giving people access to dollar denominated currency and yield for the first time ever so we use stable coins really to make

Use uh to make help people do everyday things like money transfer sending money across uh Africa because at the moment money transfer across Africa is very hard and at the same time very expensive using blockchain and crypto Technologies allows us to make it cheaper uh the rates even better for every customer and

Accessibility as well straight comes straight to your app you don’t have to go get it in a bank or anywhere else stable coins are also considered a safer store of value than local Fiat currencies some countries and crucially they provide a way for people to access

Dollars in order to do things like move money around the world another Hot Topic at the conference is how virtually all the big fintechs are using generative Ai and credit scoring to evaluate prospective customers meanwhile Bitcoins recent and massive jump in price to levels not seen since the last bu run in

2021 not as big a focus for many people on the ground here because it’s really all about getting access to USD in some capacity all right turning to crypto bankruptcies for our main story 2022 was a year filled with crypto defaults now more than a year later some of those

Failed companies are restarting operations and gearing up to repay customers so what does this mean for those who have yet to see reimbursements and as other bankruptcy proceedings linger crypto World spoke with experts to find out between 35 and $45 billion of funds are still tied up in crypto bankruptcies

That’s according to a February 15th estimate from xclaim now some of the companies that went under in the industry’s 2022 meltdown or emerging from bankruptcy all these different companies tied back to 3ac and so when 3ac went bust it really set a clock for the rest of them there were two tough

Years we had terraluna collaps we had FTX we had Celsius so far this year Celsius exited bankruptcy and began repaying customers cor scientific real estate shares on the NASDAQ and lawyers representing FTX said they expect the exchange to repay pay creditors in full bankruptcy courts are challenged with

Untangling debt and Assets in a relatively new industry then they face the difficult decision of whether to prioritize getting money back to creditors or rebuilding the existing business not many of them are really being successful in relaunching operations FTX there was a lot of discussions around whether the exchange

Component which during its Hayday was really regarded as a very good trading platform whether that technology was valuable and worth restarting because if it was then you could give creditors another Pathway to their money back your bankruptcy’s priority is to maximize the recovery and to uh keep the business

Intact maybe in Conflict to one another it may be better to liquidate the company and get people there deposits back than it is to try to use those deposits to rebuild a company that nobody wants to do business with anymore so if you’re a customer who has money

Tied up in these companies exiting bankruptcy what should you expect in the US the assets of the company are valued at the time of the bankruptcy if you had one Bitcoin at FTX you’re going to think well I had one Bitcoin I should be getting $50,000 really what you’ll get is

$118,000 but because the prices of the assets have rallied so much there’s a better opportunity to cover all the customers for which there aren’t the crypto deposits there first it’s important to remember that not all creditors are treated equally in bankruptcy courts and that’s exacerbated by the unregulated nature of crypto the

Difference really comes down to secured versus unsecured creditors secured creditors get priority when it comes to repayment because their funds are backed by collateral you always have to make sure that the secur Creditor gets its value back because the bankruptcy laws are not allowing are not allowed uh to

Hurt that collateral interest through the bankruptcy processes unsecured creditors not so much they’re stuck at the back of the line when it comes to repayment and many customers like the ones at Celsius and blogy are classified as unsecured and they were told in some of the marketing promises especially in

Celsius this case that it’s almost the same thing as if you deposited your crypto and your savings and loan and and local bank well the Bankruptcy Court ruled in fact you made a loan and now you’re left as a general unsecured creditor that is very very tough news to

Hundreds of thousands of customers who thought very differently and it wasn’t just Celsius so blocki for example followed the Celsius rules add them two together well north of a million customers found themselves not thinking that they were going to be unsecured creditors in a bankruptcy case losing their savings losing their deposits and

Being stuck at the bottom of a priority lad are fighting for scraps at the bottom of the case but that’s in fact how it ended up so when it’s all said and done how long should customers expect to wait before receiving their funds this is really a process that’s

Dependent on how fast the courts move and how fast the regulatory agencies that are also involved move so in the case of Celsius there was an earlier plan to restart not only a mining operation but also an operation that would uh run validators that could earn

Staking yield on tokens the SEC got in the way and said no we don’t want that and because of that it took a little bit longer crypto companies are also looking to unique ways to make customers whole Celsius has restructured into a mining business as a way to repay debt FTX has

Looked to sell me your crypto Holdings to reach 100% repayment those asset sales have had an effect on the crypto Market prolonged pressure on the grayscale Bitcoin trust as FTX sold its Holdings wait on bitcoin’s price for several days in January Genesis has also been given the green light to offload

Over $1.3 billion of the product FTX which held massive amounts of grayscale Bitcoin trust product now selling that product because they have much more liquidity to do so via the new Bitcoin ETF and no matter what the crypto industry still has to deal with the issue of public trust which has been

Damaged by the slew of filled businesses the crypto industry has gone through foure cycles of what we call crypto Winters and crypto Summers and as a company you need to be able to weather that out it’s kind of hard when you’ve lost trust and you’ve lost so much money

Into a system for anybody wanting to provide capital or otherwise provide trust I root that all into the lack of Regulation because people’s expectations were dashed so so significantly that it makes it very very hard to feel like why you know once bit and twice shy why would I support it

Again all right that’s all for crypto world this week we’ll be back again on Tuesday after the President’s Day holiday and we’ll see you Then