Good afternoon. On the heels of Ripple’s landmark win against the SEC (see our thoughts below), it seems as if crypto – dare we say it – is about to rally? No, in all seriousness, what’s stopping it? It’s been a full year since Terra//SBF//etc. The Celsius’s//3AC’s of the world are officially kaput. Spot bitcoin ETFs are launching in Europe and are finally getting serious considerations in the US (with heavy institutional backing). Exchange volumes are soaring back. And crypto is quickly decoupling from the S&P 500.
Since we’ve started writing CoinSnacks in 2017, every now and then the ongoing narratives paint a fascinating outlook – a moment in time where there seems to be nothing on the short-term horizon that could really stifle market momentum. After this week’s news, we feel as if that sentiment has returned.
Today's newsletter is 711 words, a 4.5-minute read.
📌 MUST READS
Ripple Wins
A lawsuit nearly four years in the making has finally come to a close and the impacts are already rippling throughout the crypto markets.
On Thursday of last week, Ripple Labs defeated a significant part of the SECs landmark case over its sale of more than $1.4 billion worth of the popular XRP cryptocurrency.
Ripple Labs had spent hundreds of millions of dollars arguing that more than half of its token sales did not violate investor protection laws, and that XRP is simply a token developed to facilitate cross-border payments. In short, Ripple Labs argued that XRP is not a security. And, surprise surprise, U.S. District Judge Analisa Torres agrees.
A Small Caveat To clear up any confusion, let’s quickly discuss what the part about “more than half of its token sales” means.
It turns out that although the judge agreed that sales on exchanges (i.e. retail trading) do not violate the Howey test (a legal test used in the United States to determine whether a transaction qualifies as an investment contract), other sales did violate securities laws. But, these violations were primarily around institutional sales.
You see, the judge put XRP sales into three distinct buckets:
Institutional sales (illegal): The judge stated that because Ripple provided institutions investment materials and contracts, it indicated an investment intent rather than a consumptive focus.
Programmatic sales (legal): These are simply sales of XRP on exchanges. The judge ruled that individuals had no way to know who they were buying the tokens from and furthermore there is no proof they were buying them for investment purpose.
Other distributions (legal): These are things like paying for services in XRP from Ripple.
But to cut to the chase…
Here Is All That You Need To Know Overall, the ruling concludes that the way XRP was sold in certain circumstances is illegal, but that XRP itself is not a security.
Perhaps to put it even more simply, the XRP token is NOT a security, but certain transactions of the token can be.
As a result, the crypto market rallied with the price of XRP rising more than 70% and Coinbase (COIN) shares rising 25% after the decision was issued.
Honestly, the entire market moved higher after the news.
If XRP is deemed not a security, others (like SOL) could be deemed not a security as well. Beyond the brighter regulatory clarity (and a step toward better token classification), the ruling gave a short-term green light around sales via exchanges.
It’s why exchanges like Coinbase, Kraken, and Gemini, quickly re-listed XRP after the ruling was determined.
While all eyes were on Ripple last week (and for good reason), there was plenty of other news surrounding Coinbase that got lost underneath the headlines.
Coinbase Pauses Staking In Four States Coinbase has announced that users in California, New Jersey, South Carolina and Wisconsin are no longer allowed to stake new digital tokens on its exchange (anything staked prior to the announcement would remain though).
The move follows the SECs lawsuit from last month, alleging that the Coinbase’s Earn staking program is an unregistered security.
The removal mainly comes as a result of the “show-cause order” that was issued by 10 states warning Coinbase that its staking product does not comply with securities rules.
While this is negative news for these four states, it is positive news for the other six where Coinbase worked with policymakers to protect the staking product.
Coinbase Releases Decentralized Messaging Feature What do you get if you combine encrypted messaging such as from the likes of Telegram and Signal, with payment apps such as from Venmo or Cash App?
This week, Coinbase launched messaging on their Coinbase Wallet feature, allowing anyone to send secure messages to and from wallet addresses on the platform. The feature, which was established in partnership with web3 communications firm XMTP, is a brand new way for people to engage with crypto beyond trading.
What’s more, the feature also allows users to send USDC to other users without incurring any gas fees.
“So what?” You might be saying…
Well, this development adds to a string of recent releases from Coinbase allowing users to interact with crypto in novel ways.
Furthermore, by offering encrypted messaging and on-chain identity verification, it can help alleviate some of the scams that so many potential users are worried about in crypto.
SPONSORED
Elon reveals biggest cover-up of the century?
Elon Musk has put a target on his back.
And even though you may not know it, or even care…
The coming war on Elon Musk is going to have a direct impact on you, your family, and your financial investments in the years to come.
In this new exposé, you’ll learn what it is that Elon has been advocating, why it’s put him in the crosshairs of an ideological war, and how you can profit from it.
The #Bitcoin Realized Cap currently sits just shy of $400B, indicating that a steady stream of capital is entering the asset throughout 2023.
As the realized cap climbs, it signals that coins are changing hands at higher prices on net, suggesting a modest uptick in new demand… twitter.com/i/web/status/1…
Jul 18, 2023
609 Likes 139 Retweets 30 Replies
Join Us On Our Newest Venture
Nervous about market volatility? We've found a solution that thrives no matter which way the market sways: high-yielding dividends.
We've put together a list of our Top 5 Dividend Stocks Paying 10%+ Yields. Click to download & to start receiving our new daily newsletter on all things traditional finance (without the fluff).
Sponsored
Other Content You Might Enjoy
Europe's first spot Bitcoin ETF has been scheduled to launch within July after a 12-month delay
Launched in December 2017, CoinSnacks is home to the longest continuously running crypto newsletter. Each week, we publish our cryptoasset musings to an audience of ~60,000 crypto enthusiasts and investors.
In a space flooded with new projects, research, and narratives, the average investor may feel overwhelmed or confused. CoinSnacks offers a solution by doing the digging for you, so you don't have to spend hundreds of hours sifting through the noise.
REACH OUR AUDIENCE
If you’re a brand interested in partnering with CoinSnacks to find your next customers, parter, or ally, we’d love to hear from you. Learn more here.
