August 28th, 2023 — Coinbase Acquires Stake in Circle — Nvidia Q2 Revenue up 101% YoY

SUN ZU Lab Research

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SUN ZU Lab

4 min readAug 28, 2023

Get an overview of crypto market liquidity from August 21st to August 28th, 2023.

Top Crypto Market Headlines:

Fed Chair’s Message Is Clear: The Fight Against Inflation Isn’t Over — 8/25/23 (link)
Binance pushes low-cap projects to boost liquidity over market manipulation fears — 8/25/23 (link)
Prime Trust Lost $8M in Doomed Terra Stablecoin Investment, CEO Says — 8/25/23 (link)
B2C2 ACQUIRES FRANCE AMF-REGULATED CRYPTO MARKET MAKER WOORTON AHEAD OF EU’S MICA — 8/24/23 (link)
Nvidia shares touch all-time high on back of AI boom — 8/24/23 (link)
FTX Taps Galaxy to Sell, Stake and Hedge Its Crypto Billions — 8/24/23 (link)
Two founders behind Russian crypto mixer Tornado Cash charged by US federal courts — 8/23/23 (link)
EDX Markets Selects Anchorage Digital as Custody Provider for New Clearinghouse Business — 8/22/23 (link)
Balancer reveals ‘critical vulnerability’ in some V2 pools — 8/22/23 (link)
Coinbase Acquires Stake in Circle, Dissolving USDC Issuer Centre — 8/21/23 (link)

The Week Ahead:

Wednesday 8/30:

Inflation Rate YoY Prel AUG (Germany)
GDP Growth Rate QoQ 2nd Est Q2 (US)

Thursday 8/31:

Core Inflation Rate YoY Flash AUG (EU)
Core PCE Price Index YoY (US)

Friday 9/1:

ISM Manufacturing PMI (US)

Weekly Insights Report:

There were two significant events last week for markets: Powell’s Jackson Hole speech and Nvidia’s Q2 earnings. The Fed Chair called inflation “too high” and warned that “we are prepared to raise rates further,” echoing his speech last year where he warned market actors to be prepared for some pain ahead in the fight against inflation. On the other hand, Nvidia completely destroyed its already high earnings forecasts. The company made a record revenue in Q2 of $13.5 bn (up 88% from Q1 and 101% YoY), of which a record Data Center revenue of $10.3 bn (up 141% from Q1 and 171% YoY). It increased its Q3 revenue guidance to $16 bn. The news briefly sent Nvidia’s stock price to an all-time high above $500 before surprisingly returning to a pre-earnings announcement level of $460. Is the market simply not yet ready to stomach the extent of these record figures?

Last week also saw other frustrating revelations about financial mismanagement and poor governance in the crypto sector. The CEO of Prime Trust, Jor Law, revealed in a court filing that the company lost $6 million belonging to clients and an additional $2 million from its funds due to a failed investment in the terraUSD algorithmic stablecoin. Prime Trust filed for bankruptcy in the United States in August, estimating roughly $100 million to $500 million in liabilities and between 25,000 to 50,000 creditors. The filing followed a Nevada court ordering the appointment of a receiver for Prime Trust due to the risk of “irreparable harm” to users, the public and “confidence in the emerging market of cryptocurrency.”

Law, who took his role on Nov. 29 after serving on the board, also cited a January 2021 incident in which customers were told to send funds to the wrong wallet, inaccessible to the company, after which the company had to spend $76 million to buy ether (ETH) to fund withdrawal requests. Moreover, even after the collapse of Terra, the Prime Trust group “continued to ramp up spending, at times incurring seemingly excessive expenditures,” Law said, saying that in November 2022, the company — not yet run by him — spent $11.1 million against revenues of just $2.7 million.

Coinbase has acquired a stake in Circle, dissolving the Centre Consortium, which issues the USDC stablecoin. The two companies will now split revenue from interest on the dollar reserves backing USDC. Circle also plans to launch USDC on six additional blockchains, including Base, Cosmos via Noble, NEAR, Optimism, and Polkadot throughout September, and Polygon PoS, in October. This is another example of Coinbase’s shift from trading commission revenue toward a diversified revenue mix.

In other news, SBI-owned B2C2 increased its European expansion by acquiring rival trading firm Woorton. The Balancer team reported a “critical vulnerability” in their code last Tuesday, affecting close to 300 trading pools across 8 chains. The team encouraged users to withdraw liquidity from “at risk” pools immediately. The nature of the vulnerability was not disclosed to mitigate the potential of it being exploited by a malicious actor. Cloud storage platform Dropbox announced it would no longer offer an unlimited storage plan after discovering that certain customers were using the subscriptions for illegitimate purposes like crypto and Chia mining.

On a weekly basis, BTC is down by 0.4% and ETH is down by 1.6%.

Other Major Crypto Headlines:

Mastercard, Binance to end crypto card partnership — 8/25/23 (link)
Coinbase outlines decentralization plan for Base with fault proofs and OP client diversity — 8/24/23 (link)
Solana Pay integrates plug-in with Shopify for USDC payments — 8/23/23 (link)
Thailand warns Facebook to tackle crypto-related scams or face possible shutdown — 8/22/23 (link)

And in case you haven’t seen, here is a selection of our latest articles:

August 28th, 2023 — Coinbase Acquires Stake in Circle — Nvidia Q2 Revenue up 101% YoY

Written by SUN ZU Lab Research