The Wolf Den #788 - BASE's Launch: A Tale of Promise, Problems, and Potential
The future of blockchain is... rug pulls?
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In This Issue:
BASE's Launch: A Tale of Promise, Problems, and Potential
Bitcoin Thoughts And Analysis
Job Numbers Today - Legacy Markets
Coinbase Beats Earnings
SBF Going to Jail? Let’s Hope.
Revolut Joins The Trend Of Saying FU To The US
Worldcoin Is A Shit Show
Saylor To Buy $750M Worth Of Bitcoin, An ETF Will Be Approved And You Are Not Bullish Enough!
BASE's Launch: A Tale of Promise, Problems, and Potential
BASE, Coinbase's innovative Ethereum layer-2 solution leveraging Optimism roll-up technology, promises to revolutionize the DeFi space… and it officially launches next week. But like all pioneers, it's not without its share of trials and tribulations. Let's dive deep into the highs and lows of BASE's journey.
From its inception, BASE had the weight of expectations, primarily due to its backing by Coinbase. As a layer-2 platform, BASE's primary advantage lies in its potential to alleviate the congestion and high gas fees plaguing the Ethereum network and the fact that it does not have a native token. This makes it a beacon of hope for faster, cheaper transactions in the DeFi space and for less regulatory scrutiny.
But this is crypto, so we can assume outright that a bunch of degenerate anons are going to find a way to ruin the party before it even starts.
Meme coins, often minted as ERC-20 tokens on Ethereum, have become the poster children for volatility in the crypto world. They are stupid. Really stupid. Their popularity, driven by viral trends and endorsements, makes platforms like BASE a fertile ground for their launch - even before IT IS LAUNCHED. The recent frenzy around BaldBaseBald (BALD), a meme coin humorously inspired by Coinbase CEO Brian Armstrong's baldness, saw a staggering 4,000X price increase, catapulting its market cap beyond $100 million. This wild ride epitomized the unpredictable nature of meme coins and the reality of open source protocols where people can do whatever they choose.
The euphoria was short-lived. A rug pull, a treacherous act where developers abruptly withdraw liquidity, leaving investors high and dry, soon plagued BALD. Within a day of its launch on BASE, BALD's value plummeted by 92%, before there was even a bridge for “investors” to get their money out. What intensified the intrigue was the involvement of a 'sophisticated whale,' a prominent player in the crypto market. The whirlwind of accusations, denials, and speculations entangled even notable figures from the crypto industry, such as the former FTX CEO, Sam Bankman Fried, although these allegations were subsequently dismissed.
Crypto Twitter went full Alex Jones tin hat to explain the rug pull.
This wasn't an isolated incident. In the same timeframe, 29 meme coins launched on BASE were rugged, leading to significant losses for many investors.
What a shit show.
And remember - BASE had not officially launched yet, and nothing of actual value or utility had yet been built/
Despite these challenges, it's crucial to remember that BASE is still in its infancy. Its potential to reshape the DeFi landscape is undeniable. Coinbase, as the key stakeholder, has a responsibility to address these issues and reinforce trust within the community. Their response will be pivotal in determining BASE's future trajectory. However, the intrinsic value of BASE – faster and more economical transactions – remains its ultimate selling point.
The BASE journey is reminiscent of the broader crypto narrative – a blend of innovation, promise, volatility, challenges... and pure unadulterated stupidity. As the platform matures and builders learn from the initial setbacks, there's every reason to believe that BASE can fulfill its potential and play a significant role in the next phase of DeFi's evolution. Only time will tell if BASE can strike a balance between its vast promise and the very real challenges it faces.
Side note: every year I take a week in August off to spend with my family before my kids go back to school. That is next week! I will be unplugging almost entirely, which means no newsletter or YouTube. This also gives my team a break to recharge and come back stronger. See you guys in 10 days!
Bitcoin Thoughts And Analysis
THERE IS NOTHING ELSE TO SAY ABOUT BITCOIN THAT WE HAVE NOT ALREADY SAID!!!!
Job Numbers Today - Legacy Markets
US equity futures are up, and Treasuries are seeing fluctuations ahead of US employment data that will provide insights into the potential trajectory of Federal Reserve interest rates. US stocks are aiming to recover from their most significant weekly drop since March, with the S&P 500 and Nasdaq 100 indexes seeing advances in contracts. Amazon shares rose 9% in premarket trading due to revenue exceeding expectations, while Apple's market value is poised to fall after a third consecutive quarter of declining sales. July's non-farm payroll estimates predict the addition of 200,000 US jobs, a number that if exceeded might prompt speculations of more Fed hikes. Treasury yields remain consistent, but concerns have grown due to the recent US credit ranking downgrade by Fitch Ratings and the government's decision to increase quarterly debt sales. With these market disturbances, investors, including those at Bank of America Corp., are becoming more cautious, shifting away from equities amidst high economic contraction risks. European companies like WPP Plc and Credit Agricole SA also reported notable changes in earnings.
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 11 a.m. London time
S&P 500 futures rose 0.4%
Nasdaq 100 futures rose 0.5%
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0945
The Japanese yen fell 0.1% to 142.73 per dollar
The offshore yuan fell 0.1% to 7.1902 per dollar
The British pound was little changed at $1.2707
Cryptocurrencies
Bitcoin fell 0.4% to $29,170.53
Ether fell 0.4% to $1,836.33
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.19%
Germany’s 10-year yield advanced three basis points to 2.63%
Britain’s 10-year yield advanced two basis points to 4.49%
Commodities
Brent crude rose 0.6% to $85.67 a barrel
Spot gold was little changed
Coinbase Beats Earnings
Coinbase shares were all over the place in after-hours trading on Thursday, following the release of its Q2 report. The stock was up roughly 12% immediately after the announcement, only to plunge and be DOWN within an hour. They are currently flat.
The prominent crypto exchange posted revenues of $708 million, exceeding analysts' predictions of $628 million. Furthermore, the reported loss was $0.42 per share, which is less severe than the anticipated loss of $0.76 per share.
While transaction revenue for the quarter was $327 million, a decline from the $375 million of Q1, the total trading volume also dipped to $92 billion from the Q1 figure of $145 billion. Another decrease was seen in interest income, dropping from $241 million in Q1 to $201 million in Q2. Notably, $151 million of the Q2 interest income came from Coinbase's USDC holdings.
Coinbase shares have witnessed a substantial growth of 160% this year. In comparison, Bitcoin's price has gone up by over 75% during the same period.
Coinbase CEO, Brian Armstrong, commented on the robust quarter, highlighting the company's efficiency, resilience, and commitment to shaping the crypto economy's future and aiding in regulatory transparency.
Coinbase is still alive and well, regardless of attacks by the SEC.
SBF Going to Jail? Let’s Hope.
The U.S. Department of Justice (DOJ) suggests detaining FTX founder, Sam Bankman-Fried, pending trial. They argue he didn't merely exercise his right to free speech but took covert actions to discredit a trial witness, potentially tainting the jury. This follows the revelation that Bankman-Fried shared the diary of former Alameda Research CEO, Caroline Ellison, with the New York Times.
This act is one among other behaviors the DOJ points out as attempts to "corruptly influence witnesses." In defense, Bankman-Fried's attorneys claim that he only aimed to defend his reputation. The DOJ counters this, suggesting that Bankman-Fried manipulated the media to emphasize Ellison's significance ahead of her witness testimony and possibly informed the New York Times about the diary before sharing it.
The DOJ criticized the defense team's focus on the current FTX CEO, John J. Ray III, emphasizing that he isn't a witness in this case. The matter's judge, Judge Lewis Kaplan, might call for another hearing on these filings. Legal experts note that the DOJ will need to convince the court of Bankman-Fried's potential danger to the community, with witness intimidation as a primary concern.
Revolut Joins The Trend Of Saying FU To The US
Revolut, a UK-based fintech firm, will suspend its cryptocurrency services in the U.S. starting September 2, 2023. From this date, U.S. customers won't be able to place cryptocurrency buy orders on the platform. By October 3, 2023, the restrictions will become more stringent, disabling U.S. customers from buying, selling, or holding any cryptocurrencies on Revolut.
The decision stems from the uncertain regulatory environment surrounding the crypto market in the U.S. Revolut conveyed their understanding of the potential disappointment this might bring to their customers.
Revolut's move came after the SEC's intensified scrutiny, considering most cryptocurrencies as securities. This perspective gained traction when the SEC sued crypto giants, Coinbase and Binance, for not registering several cryptocurrencies. Both exchanges have denied the claims. Responding to this environment, Revolut quickly delisted tokens like Cardano (ADA), Solana (SOL), and Polygon (MATIC) – all deemed as securities by the SEC.
Despite the challenges in the U.S., Revolut's cryptocurrency services remain active and are even expanding elsewhere, especially in Europe. The company recently introduced a staking program in the UK and various European countries, offering crypto rewards to customers.
Worldcoin Is A Shit Show
The Kenyan government has halted US entrepreneur Sam Altman's Worldcoin from registering new users, citing data privacy issues. The cryptocurrency project offers free tokens to individuals in exchange for an eyeball scan. Despite attracting many Kenyans with the promise of currency valued at around $49 (£39), authorities raised concerns about biometric data storage, exchanging money for data, and the potential risks of large-scale data with a private entity. While Worldcoin aims to build a global identity and financial system, Kenyan officials and privacy experts remain wary, prompting an investigation into the project's legitimacy. Worldcoin has assured adherence to Kenyan regulations and expressed intentions to collaborate with local authorities.
That’s not enough? Check out this article…
Worldcoin, co-founded by OpenAI CEO Sam Altman, plans to expand globally and allow other organizations to utilize its iris-scanning identity verification technology. Launched recently, Worldcoin provides users with a digital ID, and in certain countries, free cryptocurrency in exchange for iris scans. Despite privacy concerns, around 2.2 million users have registered over the past two years. The technology might be adopted for diverse purposes, including distinguishing humans from AI, supporting global democratic processes, and hinting at a means to universal basic income. Ricardo Macieira, a senior manager at Tools For Humanity (the company behind Worldcoin), suggests that businesses might use Worldcoin's digital identity system, for instance, to offer promotions without collecting personal data. Plans are also in place to make the technology open-source. Nevertheless, concerns persist regarding data protection, informed consent, and the overarching goals of the project.
NO THANK YOU!
Saylor To Buy $750M Worth Of Bitcoin, An ETF Will Be Approved And You Are Not Bullish Enough!
Eric Balchunas and James Seyffart, Bloomberg ETF analysts, have increased their forecast of Bitcoin ETF approval to 65%! I am expecting both analysts to join me to discuss it. In the second part of the show Dan The Chart Guy will join me to discuss some charts: QQQ, SPY, DXY, BTC & etc!
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
Thanks!