Cryptocurrency update: Coinbase goes public, Bitcoin back down to earth, Cardano rallies

Coinbase is about to go public, while Bitcoin comes crashing down. Elsewhere in these week’s crypto update, Cardano looks like it could be about to jump.

Cryptocurrency update

Coinbase IPO is coming soon

Coinbase, the world’s largest crypto exchange, has made its SEC filing which means an IPO is coming very soon. Is this another step on the road to complete legitimacy for digital currencies? Very possibly.

As our Chief Markets Analyst Neil Wilson pointed out last Thursday, we’ve learned some interesting titbits ahead of Coinbase’s full public launch.

Firstly, because the exchange is based around a volatile asset, Coinbase earnings are volatile themselves.

“All of our sources of revenue are dependent on crypto assets and the broader cryptoeconomy. Due to the highly volatile nature of the cryptoeconomy and the prices of crypto assets, our operating results have, and will continue to, fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader cryptoeconomy,” the filing states.

Coinbase’ value is also completely tied in with Bitcoin prices. 70% of its revenue comes from BTC trades, with 13% coming from Ethereum.

“If demand for these crypto assets declines and is not replaced by new demand for crypto assets, our business, operating results, and financial condition could be adversely affected,” says the filing.

The filing went on to say: “More recently, we have experienced significant growth in the number of institutions on our platform, increasing from over 1,000 as of December 31, 2017, to 7,000 as of December 31, 2020.”

We’ve seen plenty of institutions and even corporations invest in cryptos and related digital economy infrastructure in recent times. The Coinbase IPO looks like it could be another important part of the puzzle.

Bitcoin tumbles but new all-time highs forecast

Newton’s Third Law of Motion states “what goes up must come down”. Maybe we could readapt it for Bitcoin to something more like “what goes up must come down but will very probably shoot back up again.”

Every time Bitcoin shoots up, it falls back down again as a serious market correction applies the breaks and momentum cools. Last week, the token shot to above $59,000, before higher yields and a pithy one-tweet analysis from the ever-present Elon Musk, dragged prices down to around $43,000. At the time of writing, BTC was above $48,000.

Are new all-time highs on their way? At the more optimistic end, Anthony Pompliano, partner at digital asset hedge fund Morgan Creek Digital, told Forbes he has set a BTC target price of $100,000 by the year’s end.

Some big names are urging caution though. Bill Gates is one of them. In an interview with Bloomberg, the Microsoft founder warned that, unless you have pockets as deep as Elon Musk, you should probably exercise restraint when looking into BTC.

“Elon has tons of money and he’s very sophisticated, so I don’t worry that his bitcoin will sort of randomly go up or down,” Gates said. “I do think people get bought into these manias who may not have as much money to spare. My general thought would be that if you have less money than Elon, you should probably watch out.”

More than $100bn was scrubbed off Bitcoin’s value on the latest price collapse, although subsequent gains will have gone a little way towards redressing those losses. As it stands, the world’s most popular crypto is up 50% this year.

In the world of Bitcoin, anything is possible, and it could start shooting back up at a moment’s notice. Volatility is never far away, so it might be best to heed Bill Gates’ warnings if your bank account doesn’t run into the billions.

Cardano has a busy week ahead

Cardano has been quietly soaring in recent weeks. The third-largest crypto currency in the world by market cap recently hit a new all-time high of $1.48 on Saturday but has pulled back to $1.28 at the time of writing.

Over the past twelve months, however, Cardano has been gaining value at a blistering pace. Across the year, it has gained 2000%, rising another 300% in February alone. Its market cap is now bobbing around at the $40bn level.

A fresh rally and new highs could be on their way too. Its developers are preparing a fresh update to the block-chain, preparing to turn it into an Ethereum-rivalling multi-asset network.

“We can today confirm that the ‘Mary’ Cardano protocol update is now fully confirmed for March 1,” the Cardano core development team, Input Output HK (IOHK), announced on Twitter last week. “The update introduces native tokens and multi-asset support, bringing exciting new use cases for Cardano.”

The update will allow Cardano to support stablecoins, digital tokens pegged to traditional currencies, as well as letting users create non-fungible tokens (NFTs). NFTs are a way to prove ownership and authentication of everything from social media posts to digital art using public blockchains—which have exploded in popularity in recent weeks.

Kiss bassist Gene Simmons has hopped aboard the Cardona train, buying $300,000 worth of the crypto. A sign of things to come? Possibly, but Cardona is one to watch across the next week at least.