Crypto Daily | Circle Tumbles Amid Concern Lower Rates Will Slow Profit; Coinbase Follows Elon Musk to Texas

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Circle Tumbles Amid Concern Lower Rates Will Slow Profit

Shares of Circle tumbled 12.2% on Wednesday, the most since June, as concern that declining interest rates will weigh on future returns overshadowed better-than-expected third-quarter revenue and earnings.

While revenue jumped more than 66% as the amount of Circle’s USDC stablecoin in circulation more than doubled from the year-earlier period, the company noted Wednesday that its reserve return rate fell 96 basis points to 4.15% in the quarter ended Sept. 30. Circle earns most of its profit from the interest paid on US government securities that it holds in reserve to back its stablecoin.

The third quarter was OK, “but FY25 guide implies 4Q slowdown and uphill battle on growth,” Mizuho Securities analyst Dan Dolev wrote in a note.

Coinbase Follows Elon Musk to Texas, Leaving Delaware to Reincorporate

Coinbase, America's biggest crypto exchange by trading volume, is leaving Delaware to reincorporate in Texas, citing a crypto-friendly environment and "strong culture of celebrating builders" for the decision. 

The publicly traded company, which has a remote-first policy with its employees, had been legally based in Delaware but said Wednesday in a regulatory filing with the SEC that Texas was a better fit for the firm. 

In an op-ed in The Wall Street Journal, Coinbase Chief Legal Officer Paul Grewal wrote that "Texas offers efficiency and predictability, in part thanks to recent corporate-law reforms that enhance governance flexibility and legal predictability."

Visa Reveals Pilot to Use USDC Stablecoin for Creator, Gig Worker Payments

Visa is piloting a new scheme that will allow companies to send payments directly to recipients' stablecoin wallets, while only sending conventional fiat USD.

Firms will pay out money in fiat USD, and recipients will receive the money in dollar-pegged stablecoins like Circle’s USDC, the world’s second largest stablecoin by capitalization. It doesn’t appear that companies will be able to send stablecoins directly via the scheme.

Visa did not mention if or when support for stablecoins other than USDC would be added, though it didn't say the service would be exclusive to USDC. Anyone who wants to use the service to receive payments will need both a stablecoin wallet and to pass customary AML/KYC checks, and the pilot is currently limited to platforms and businesses based in the U.S.

JPMorgan Rolls Out Deposit Token JPM Coin in Digital Asset Push

JPMorgan Chase has started rolling out a deposit token called JPM Coin to institutional clients, a move that comes as financial institutions continue to broaden their footprint in digital assets.

The token — which represents dollar deposits at the world’s largest bank — allows users to send and receive money via Coinbase Global Inc.-affiliated public blockchain Base, Naveen Mallela, global co-head of the bank’s blockchain division Kinexys, said in an interview. This enables payments to process in seconds and 24/7, rather than in days and during working hours.

The launch follows a trial period for JPM Coin over the past few months, which involved firms such as Mastercard, Coinbase and B2C2, the companies said in a statement. The bank plans to make the token accessible to clients of its clients at a later stage and expand to other currency denominations, pending approval from regulators, Mallela said. It also intends to expand to other blockchains, he added.

US Department of Justice Launches Strike Force to Combat Crypto Scams

The U.S. Department of Justice’s D.C. office announced an interagency initiative Wednesday specially designed to dismantle international crypto scam operations known as “pig butchering” schemes.

The Scam Center Strike Force will work across the DOJ, FBI, Secret Service, U.S. Treasury, and other government agencies to root out transnational criminal networks that, in recent years, have made billions of dollars scamming people across the world with fake crypto sites and by assuming false identities on social media platforms.

The initiative was announced Wednesday by Jeanine Pirro, the U.S. Attorney for the District of Columbia.

Canary Capital Files for First MOG ETF in Meme Coin Push

Canary Capital filed for regulatory approval on Wednesday to launch an exchange-traded fund that would track the price of the MOG coin, marking a first for the meme coin as money managers tap into the popularity of crypto ETFs.

While the majority of digital asset ETFs so far have focused on mainstream tokens like bitcoin and ether, smaller ones are also gaining traction despite a lack of proven use cases.

In its ETF prospectus, Canary describes MOG as a meme coin.

Judge Extends Freeze on $456M Assets Tied to Justin Sun's TrueUSD

The head of the Dubai Digital Economy Court ordered the continuation of a worldwide asset freeze and injunction against Aria DMCC for $456 million in assets.

The firm is the first defendant in a case with connections to misappropriated stablecoin reserves that were reportedly filled by Tron founder Justin Sun.

The asset freeze and injunction will continue until otherwise ordered by the court.

Bitcoin & Ethereum Spot ETF Flow

The overall net outflow of the US Bitcoin spot ETF on Wednesday was $277.98 million. The total net asset value of Bitcoin spot ETFs is $135.81 billion, and the ETF net asset ratio (market value compared to total Bitcoin market value) is 6.67%.

The Bitcoin spot ETF with the highest net outflow on November 12 was Fidelity Wise Origin Bitcoin Fund (FBTC), with a net outflow of $132.86 million, according to SoSoValue.

Source: SoSoValue

The overall net outflow of the US Ethereum spot ETF on Wednesday was $183.77 million. The total net asset value of Ethereum spot ETFs is $22.14 billion, and the ETF net asset ratio (market value compared to total Ethereum market value) is 5.42%.

The Ethereum spot ETF with the highest net inflow on November 12 was iShares Ethereum Trust ETF (ETHA), with a net outflow of $91 million, according to SoSoValue.

Source: SoSoValue