With cryptocurrency exchange Coinbase making its Nasdaq debut on Wednesday, "investors no longer have the luxury of watching from the sidelines," Nir Kaissar writes in Bloomberg. "We all have a stake in cryptos now."
Kaissar explains that Coinbase differs from a lot of companies that head to Wall Street for public stock offerings in that it's "already hugely profitable" with expected earnings of $730 million to $800 million in the first quarter on $1.8 billion of revenue. It's valued at about $100 billion, placing it among the 100 largest companies in the U.S., which means it's guaranteed to lock up a spot in most broad market index funds. Coinbase is also eligible for the S&P 500, which Kaissar notes is "the most popular index of them all and a core investment in countless portfolios and retirement accounts," so, regardless of whether they realize it, millions of people are about to become crypto investors.
Aside from its inclusion in index funds, Kaissar expects the exchange to be very popular with actively managed funds, though he notes there are a few reasons not to get overly excited. For instance, Coinbase's profitability could soon invite competition (including from central bank digital currencies), as well as the risk of increased regulation. "With Coinbase soon to be dropped into millions of portfolios, cryptos have essentially found a way around regulators," Kaissar writes. "That may compel the [Securities and Exchange Commission] to ramp up regulation and scrutiny on crypto exchanges." Read more at Bloomberg.Tim O'Donnell
Venture capitalist and conservative political donor Peter Thiel is a self-described "pro-Bitcoin maximalist," but he admitted Tuesday night that he's worried about the cryptocurrency and its digital brethren while hinting that tighter government regulations should be in play, Bloomberg reports.
Appearing alongside former Secretary of State Mike Pompeo and former National Security Adviser Robert O'Brien at a virtual event held for members of the Richard Nixon Foundation, Thiel warned that Bitcoin may be a threat to the United States, indicating that his hawkish attitude toward China outweighs his crypto enthusiasm (Thiel is a major investor in virtual currency ventures and in cryptocurrencies themselves, Bloomberg notes).
Thiel explained that China isn't fond of the fact that the U.S. dollar is the world's major reserve currency because it gives the U.S. global economic "leverage," and he thinks Beijing may view Bitcoin as a tool that could chip away at the dollar's might. "I do wonder whether at this point, [if] Bitcoin should also be thought [of] in part as a Chinese financial weapon against the U.S.," he said, video from the event obtained by Bloomberg reveals. "It threatens fiat money, but it especially threatens the U.S. dollar ... perhaps from a geopolitical perspective, the U.S. should be asking some tougher questions about exactly how that works." Read more at Bloomberg. Tim O'Donnell
THIEL: Even though I’m a pro-crypto, pro-Bitcoin maximalist…I do wonder whether at this point, Bitcoin should also be thought of in part as a Chinese financial weapon against the U.S. pic.twitter.com/E1DNOsrr5X
Twitter announced Monday that it will ban ads for cryptocurrencies. "Under this new policy, the advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally," Twitter said in its email statement, TechCrunchreported.
Bitcoin, the most well-known cryptocurrency on the market, has not escaped this announcement unscathed. On Monday, it was down about 6 percent from its closing price Sunday, CNBC reported. However, the overall market for cryptocurrency may not be affected much; less than 1 percent of the web traffic that exchange sites receive is from paid advertisements, The Vergereported.
Even so, many social media platforms are attempting to distance themselves from cryptocurrencies after the U.S. Securities and Exchange Commission warned that various ICOs may be breaking securities regulations. Facebook instituted a ban in January, and Google recently announced a ban that will take effect in June, Bloombergreported. Earlier this month, the SEC sent subpoenas to many cryptocompanies it suspected of breaking the law, prompting Twitter to announce that it was "implementing measures" to prevent scams.
These new restrictions may be an effort to shape up content policies in general, Quartzsuggested. With the recent attention devoted to Facebook's data breach at the hands of Cambridge Analytica, platforms may be making the decision to play it safe. Shivani Ishwar