Bitcoin’s Price Concerns Addressed by Coinbase Amidst Massive Asset Sale
Bitcoin investors have been growing concerned after a federal judge authorized Genesis to sell around $1.66 billion in assets. However, Coinbase has reassured the market that this massive sale is likely to have a “neutral overall effect”.
Coinbase remains optimistic about the crypto market as its own revenue increased by 51% in the last quarter of 2023. Despite this optimism, Coinbase recently announced changes to its Coinbase Commerce service, including the removal of native Bitcoin support.
Assets on the Market
The assets that Genesis has been authorized to sell include shares of Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).
- 35.9 million shares of GBTC
- 8.7 million shares of ETHE
- 3.0 million shares of ETCG
The outcome of the sale is still uncertain, as it is unclear whether the shares will be exchanged for their underlying assets or sold for cash.
Coinbase Predicts a Neutral Effect
Coinbase believes that the sale of these assets will have a “neutral overall effect” on the market because they will remain within the crypto ecosystem. This prediction is supported by the momentum currently being experienced in the cryptocurrency market.
A confirmation hearing on February 26th will determine how these shares will be handled and whether Genesis’ debt repayment plan is viable.
No More Native Bitcoin Support
Coinbase Commerce has decided to drop its support for native Bitcoin at a time when the cryptocurrency’s value has increased by 25% in the past month. According to Coinbase’s Head of Product, Lauren Dowling, this decision was difficult but necessary due to Bitcoin’s lack of stablecoins and smart contracts.
However, customers with a Coinbase account will still be able to pay using Bitcoin, as it remains a widely used cryptocurrency.
Coinbase’s Path to Profitability
Coinbase has recently achieved profitability, posting its first profitable quarter since going public. The exchange’s CEO, Brian Armstrong, attributes this success to various factors:
- $95 million in positive net income
- Launch of Coinbase International Exchange
- New products like derivatives and Layer 2 Base
- Lobbying efforts for Bitcoin ETF approval
With a strong financial position, Coinbase aims to focus on growing trading fee revenue by expanding internationally and improving its payment solutions. The exchange also plans to develop Coinbase Wallet into an onchain superapp. Additionally, Coinbase will continue its efforts to drive regulatory clarity for crypto in 2024 through lobbying and legal initiatives.
Hot Take: Coinbase Remains Optimistic Amidst Asset Sale
Despite concerns about the sale of assets by Genesis, Coinbase maintains a positive outlook on the crypto market. With its recent profitability and plans for expansion and innovation, Coinbase is positioned to continue thriving in the evolving cryptocurrency industry.
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