Coinbase Shares Tumble by 21% and Other Fintech News


Shares of Coinbase plummeted by more than 21% recently due to reports that it is facing a probe from the Securities and Exchange Commission, citing that the platform is offering unregistered securities. The probe is different from another case where it was alleged that Coinbase had an insider trading scheme that eventually culminated in a fraud charge. The stock of Coinbase has lost more than 75% of its value this year.

Crypto assets are often used in casinos like Vulkan Casino, but it is not the reason for the probe.  Meanwhile, the SEC is reviewing whether the company is really allowing its users to trade digital assets that were not registered as securities.

The Coinbase chief legal officer, Paul Grewal, said that he was confident about the company’s rigorous diligence in all its processes. He also stated that the SEC had already reviewed those processes and that the company was looking forward to cooperating with the government.

The SEC has already filed a complaint saying that 9 of the 25 tokens in the Coinbase system were securities. There is an argument about how cryptocurrency should be classified. It is a controversial topic, to say the least. If crypto assets are commodities, then it has to be regulated by the Commodity Futures Trading Commission. If it is a security, the SEC will take the responsibility. The thing is that cryptocurrency projects are mainly funded by the sale of tokens. At the very least, the price of the asset is speculative. 

Minecraft creator rejects NFTs

Minecraft’s developer, Mojang, said that it was not a big fan of non-fungible tokens. Minecraft, which is now owned by Microsoft, stated last week that it would not support NFTs. They said that NFTs were not inclusive. It will only create a scenario where the community is split between those who have it and those who do not have it. 

NFTs are tokens that sit on the blockchain. Today, most of them are digital artwork. The goal of NFT is to prove the ownership of a unique digital item. It can be graphic art, an avatar, or a video game. Some NFTs have already sold for millions of dollars. 

These tokens of NFTs have been facing heavy scrutiny from all sides. Like other assets, they are speculative, and people only buy them to make a quick profit. There are also concerns about the environmental impact, as NFTs rely on crypto assets and crypto assets are heavy consumers of electricity.

Mojang said in its blog post that NFTs were not aligned with the values of the game. As such, they will not allow the NFT to penetrate Minecraft. Mojang also said that the speculative aspect of NFT would erode the focus of players, making them pay attention to earning games rather than getting value from creating worlds in Minecraft. The result will be a community that is so focused on profiteering. Mojang wants to ensure an inclusive environment on the platform, and they can only do this if they do not permit blockchain technologies in the game. 

Bitcoin price reaches $24,000

Bitcoin surged and hit $24,000 for the first time since last month as traders took comfort in the knowledge that rate hikes will be softer from the Federal Reserve.

The surge is 8% in as little as 24 hours, and the trading levels are high—not seen since the middle of June. Tighter monetary policies from the US Central Bank have had an impact on stocks and cryptocurrencies, and the news of softer hikes was a relief for Bitcoin investors. Though the price surge is excellent news, people said that the bear market was not yet over. 

The US Central Bank has plans to raise hikes at its next policy meeting. Many economic pundits say that a less aggressive increase is expected. The word on the grapevine is that the hike is somewhere around 75 instead of 100.

Crypto miners moved $300 million in one day

The blockchain analytics firm CryptoQuant released data showing that miners are quickly selling their bitcoin assets. More than $300 million worth of bitcoin (14,000 bitcoin) got transferred out of the wallets belonging to miners and going to buyers. This happened in 24 hours. A week before that, miners also offloaded the biggest number of bitcoins since last year. 

A situation like this is what experts call miner capitulation. There is no reason to panic, as this move merely entails that the miners are selling their cryptocurrency assets to cover their mining expenses. As this is happening, inflation is at a steady rise. The cost of energy is getting bigger and bigger as the war between Russia against Ukraine is going on. A higher electricity cost means that the bitcoin miners must have the cash to pay—therefore, they have to sell huge amounts of their bitcoin reserves. 

The margins for bitcoin miners are getting lower because of both high energy costs and lower bitcoin prices in the market. One of the largest publicly traded mining companies of bitcoin, Core Scientific, sold almost all of its bitcoin assets in June. The CEO, Mike Levitt, says that, like any business, miners have to pay their bills. 

Ethereum jumps 12%

Ethereum jumped 12% as the Merge Event comes closer. Investors are positive about the upcoming Merge event, and the result is a rise of Ethereum by double digits. The Merge is expected to take effect in September.  The Merge is an upgrade where Ethereum will no longer be proof-of-work but proof-of-stake. Once this happens, the cryptocurrency is expected to be more stable. It will also reduce its carbon footprint. 

The Ethereum merge is a point where a serious push and willpower are required. Ethereum will now be a new network, and people are beginning to call it Ethereum 2.0. With a new and improved system, Ethereum will be able to compete with many blockchain networks. Investors see this as a positive thing but are still advised to be cautious. Regardless of the improvement, any cryptocurrency is still a speculative asset.

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