In the latest edition of the Coinbase Institutional Monthly Reading List, we present a snapshot of the company’s strong performance in the fourth quarter, along with our outlook for 2022. A roundup of our institutional trading insights includes a look at the key macro factors impacting crypto markets, analysis on passive income opportunities in DeFi, and yield estimates for staking ETH post merge.
This month’s reading list also features global crypto trends, institutional research and news on the Metaverse, and updates on the latest moves in venture capital.
We also encourage readers to visit and subscribe to our team’s other publications to stay up to date via our Weekly Market Commentary, Institutional Resource Center, Twitter account and Weekly Market Update Calls.
Institutional trading intelligence
Coinbase Institutional March Monthly Outlook: Entanglement In this Monthly Outlook report, we assess how the invasion of Ukraine has created greater uncertainty over how the U.S. Federal Reserve will approach its normalization path. As these themes become increasingly entangled, we ponder how institutional investors should approach crypto markets.
Coinbase Institutional Market Intelligence: Comparing passive income opportunities in DeFi In this Market Intelligence report, we analyze metrics like TVL for characterizing DeFi opportunities from an active and passive perspective. Conviction on directional crypto exposure remains low in our view, but one way to mitigate volatility and risk has been through yields from DeFi platforms like lending, liquidity pools and staking.
Coinbase Institutional Market Intelligence: ETH Staking Post Merge: Yield Estimates and Risk In this Market Intelligence report, we examine valuation models based on ETH staking rewards following the expected merge of Ethereum’s mainnet with the Beacon Chain in June. With no precise timeline for when staked ETH will be allowed to be withdrawn, we assess how investors should think about valuation when the principal is locked up for an indefinite period of time.
Institutional crypto trends
Wall Street Takes Lead in Crypto Investments The Wall Street Journal reports on record institutional investment into cryptocurrency markets, underscoring the rapid mainstreaming of digital assets. Such growth has altered the behavior of crypto markets, which now increasingly reflect traditional markets.
London Stock Exchange buys TORA to boost digital drive Reuters reports that the London Stock Exchange Group has agreed to buy U.S. cloud-based technology provider TORA in a $325 million deal which will add digital assets to its trading tools. The deal highlights the growth in mainstream interest in cryptocurrencies, with LSEG saying the acquisition will help expand its trading and banking business globally.
KPMG in Canada adds Bitcoin and Ethereum to its corporate treasury KPMG, the British-Dutch multinational professional services network, has made its first investment in cryptocurrencies. The allocation also includes carbon-offsets to maintain the firm's ESG commitments.
Years after calling Bitcoin ‘rat poison,’ Warren Buffett invests $1 billion in crypto-friendly bank Berkshire Hathaway has acquired $1 billion of shares in Nubank, a digital financial services firm in Brazil, according to SEC filings. The stock purchase comes amid intensifying competition among digital banks in Latin America.
Ukraine legalizes Bitcoin Shortly before the crisis in Ukraine unfolded, Bitcoin was legalized as its parliament approved a bill that catered to the president’s recommendations. However, the country has not made Bitcoin legal tender.
Ukraine Raises More Than $48 million in Crypto Donations Since February 26, the Ukraine government has raised over $48 million in crypto donations, along with digital artwork including a limited edition worth roughly $200,000, according to blockchain analytics firm Elliptic. The challenge is how the country cashes in on these assets to fund its war needs.
What Citadel’s Ken Griffin thinks of Russia, Ukraine and Crypto Citadel CEO Ken Griffin has softened his stance on cryptocurrencies, saying “crypto has been one of the greatest stories in finance over the course of the last 15 years.” The billionaire hedge fund manager also weighs in on the Ukraine crisis.
Venture capital crypto watch
Sequoia launches new $500M-$600M liquid token fund Venture capital firm Sequoia furthers its crypto investments with a new fund focused on liquid tokens and digital assets. The firm says the goal of the fund is to participate more actively in protocols and better support token-only projects.
Crypto startup Helium raises $200 million Axios broke the news that Helium, a crypto-powered wireless network, raised $200 million in Series D funding, valuing the company at $1.2 billion.
Cryptocurrency firm Circle doubles valuation to $9 bln in tweaked SPAC deal Reuters reports that crypto firm Circle Internet Financial was valued at $9 billion under new deal terms with Concord Acquisition Corp., a blank-check firm backed by former Barclays CEO Bob Diamond.
Crypto economy tracker
UAE to Issue Crypto Licenses in Bid to Become Industry Hub Bloomberg reports that the United Arab Emirates is preparing to issue federal licenses for virtual assets service providers by the end of this quarter in a bid to attract crypto companies to the country.
Colorado to Accept Crypto for Taxes Colorado Governor Jared Polis explained in an Ethereum-focused speech in Denver that it will accept state taxes and fees in cryptocurrency by the summer of 2022.
Boston Federal Reserve and MIT Release Research paper on Central Bank Digital Currency The Federal Reserve Bank of Boston and Massachusetts Institute of Technology unveiled a research report on CBDC. The report describes a theoretical high-performance and resilient transaction processor for a CBDC that was developed using open-source software.
Institutional research & news on the metaverse
JPMorgan: Opportunities in the Metaverse Analysts at JPMorgan published research on the Metaverse, saying it will eventually penetrate all areas of corporate life. They estimate a market opportunity with over $1 trillion in yearly revenues.
Bloomberg Intelligence: Metaverse ETF Growth Globally Analysts at Bloomberg Intelligence published research on Metaverse-related exchange-traded funds, which they say could capture a slice of the $800 billion global market for virtual worlds. Metaverse-based ETFs are experiencing steady inflows after Facebook's rebranding to Meta, led by retail with institutional money set to follow.
South Korea to invest $187M in national metaverse project South Korea’s Ministry of Science and Future Planning pledged $186.7 million to create a broad Metaverse ecosystem to support the growth of digital content and corporate growth within the country.