01. March 2021 | 10:10 CET
Coinbase, Bitcoin Group, BIGG Digital Assets, Northern Data - Caution, mega important!
High fluctuation ranges and thus increased nervousness characterized the picture of most cryptocurrencies in recent weeks. After reaching an all-time high of USD 58,354.14, bitcoin slid to below USD 44,000.00. Advocates for rising prices are still present, but warning voices from the economy and politics are increasing. A near-term event will set the trend for the entire industry. Will the trend reverse, or is it just a correction in the long-term upward trend?
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ISIN: CA0898041086 , DE000A0SMU87 , DE000A1TNV91
Musk drives prices
Bitcoin went up sharply after the news that serial founder Elon Musk is said to have bought bitcoins worth USD 1.5 billion via Tesla. In addition, Tesla cars will also be able to be paid for via Bitcoin in the future. A sign of recognition of the cryptocurrency, of all things, by the currently second richest person in the world. Or rather a marketing stunt? Microsoft founder Bill Gates found the appropriate words after this action: "If you have less money than Elon, watch out!" Thus, according to Gates, at the moment, only Jeff Bezos comes into question as a Bitcoin buyer, who has taken over the top of the rich list again in the short term.
Gates is skeptical about investing in cryptocurrencies; for one thing, he sees no benefit, and for another, it's hard to pin down a value. The tech pioneer is also primarily concerned about energy consumption during mining. Researchers in Cambridge have found that BTC uses more electricity than all of Argentina, consuming over 121.36 terawatt-hours (TWh) per year. Gates said it is possible to create a digital currency that requires less electricity consumption. Gates hinted that a digital currency could be in the works at his foundation.
Extremely important for the entire industry will be the IPO of the largest US trading platform for digital currencies, Coinbase, to the US technology exchange Nasdaq. The San Francisco-based Company filed for its initial listing with the US Securities and Exchange Commission (SEC) on February 25, disclosing its latest business figures in the securities prospectus. And these look spectacular. Sales doubled to around USD 1.3 billion in 2020, while profits exploded to plus USD 322 million in 2019 after a minus USD 30 million in the previous year. In total, the industry leader has just under 43 million users at the moment, who trade at least once a month.
At the beginning of the year, a direct placement was already filed with the SEC. Here, shares are taken directly to the stock exchange without the support of investment banks and a prior pricing procedure. This procedure is more flexible and cheaper. Before Coinbase, other larger companies such as the music service Spotify or the office chat app Slack were successful with this move. Details about the Company's valuation and exact date have not yet been finalized. The Company was already valued at approximately USD 8.0 billion in its last funding round in 2018. In our opinion, however, the stock market debut should take place over the next four weeks. However, it is clear that in the event of a successful IPO, German stocks such as Bitcoin Group or Northern Data could also benefit on the hype surrounding cryptocurrencies.
The main beneficiary from Canada
BIGG Digital Assets could enormously benefit from the successful performance of the Coinbase IPO, as the Canadians are in the direct peer group. For example, BIGG operates its trading platform for cryptocurrencies via Netcoins. With applications already submitted to the authorities, Netcoins is set to become Canada's first regulated trading platform. And business is booming. Last week, the daily turnover of USD 100,000.00 was cracked for the first time in history.
The Netcoins income model is solely dependent on trading, where a percentage of each trade is recorded as income, regardless of the price of the underlying crypto asset being traded. Highly volatile days for Bitcoin and crypto assets drive higher trading volumes and higher revenues, even when assets are trending down. As a result, BIGG profits in any market condition. On the side, the Company has a total of 300 bitcoin of its own. Last week, it added another 60.7 bitcoin, which will be used for the Netcoin operating float and become part of BIGG's long-term treasury holdings.
The Canadians' second important asset is the Blockchain Intelligence Group segment with its programmed software QLUE. Here, suspicious money transactions are tracked and traced. With greater forensic depth, it investigates where the funds in question come from, where they are transferred to, and the profiles of the bodies involved. Customers of the software include law enforcement agencies, banks and stock exchanges. US Homeland Security and the US Department of Justice signed long-term contracts last year. The stock, which has outperformed the cryptocurrency in recent months, corrected from CAD 1.15 to currently CAD 0.92 in the wake of general market weakness. A renewed rise in the bitcoin price should also give BIGG Digital Assets further potential to the north.