Crypto Three Things (11/09)

Wednesday, Nov 9th 2022

Commentary

“If we are the biggest exchange, [buying Goldman Sachs and CME] is not out of the question at all” - Sam Bankman-Fried 


1) Coinbase Sees Uptick in Activity: Coinbase CEO Brian Armstrong said the digital asset trading platform registered an increase in user activity in the aftermath of Binance’s takeover of FTX.com. Coinbase has no plans to acquire the U.S. wing of FTX, which is not part of the Binance buyout, Armstrong said in an interview. He also distanced the exchange from the drama, saying Coinbase had no material exposure to FTX or its house coin FTT.

Titan’s Takeaway: As the crypto community struggles to rebuild the fragile confidence in the industry, a power shift now seems imminent. Coinbase is well-aware of it and will likely make a move to draw in FTX refugees.

2) Sam Bankman-Fried’s Wealth Down 94%: FTX chief executive Sam Bankman-Fried once pledged to give away all of his fortune - $26B at its peak. Instead, a stunning reversal saw the entrepreneur’s riches dwindle by 94% to just under $1B, ejecting him from the Bloomberg Billionaires Index overnight. Bankman-Fried’s wealth was tied to his two most valuable assets – a 53% ownership in FTX valued at $6.2B, and a $7.6B stake in his trading house Alameda Research.

Titan’s Takeaway: A week ago, Sam Bankman-Fried was the angel investor crypto needed. Just before his wings got clipped, he promised billions to save the industry. A year ago, the FTX chief talked about how buying Goldman Sachs was “not out of the question at all.” This news is moving fast and while it his wealth may be down 94% today, it could be down to zero by tomorrow morning. 

3) Marathon Digital Reports Wider Loss: Nasdaq-listed mining rig operator Marathon Digital posted a $75M net loss in the third quarter, surpassing analyst estimates of $18.7M. The Nevada-based crypto company generated $12.7M in revenue and produced just 616 Bitcoins, as opposed to $51.7M and 1,252, respectively, in the year-ago quarter.

Titan’s Takeaway: The mining industry is forced to endure tremendous pressure amid rising energy costs and tumbling Bitcoin prices. With its stock down ~70% this year, Marathon is among the lesser hit of cash-strapped mining companies as a survival-of-the-fittest environment looms.

As of this writing, BTC was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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