Yesterday in Crypto - Issue #19

Read time: ~7 minutes

Coinbase has officially launched its Ethereum layer-2 network called "Base." This new platform aims to foster the development of decentralized applications (dApps) and has been in the works for some time. The launch was accompanied by a month-long event named "Onchain Summer," which celebrates the introduction of Base to the broader public.

Several Web3 development teams have already announced the release of apps specifically for Base. Users can now bridge Ether (ETH) from the mainnet to Base, swap tokens, provide liquidity, make payments, register usernames, and even establish decentralized autonomous organizations (DAOs) on this new network. Notably, multiple brands and projects will be minting exclusive nonfungible tokens (NFTs) on Base throughout August and early September. These include big names like Coca-Cola, Atari, and OpenSea.

However, the launch of Base wasn't without its challenges. During its phased launch, some users tried to capitalize on early opportunities by transferring ETH to the network and investing in memecoins. Unfortunately, due to various launch issues, many of these investors faced significant losses. One prominent example of this is the BALD meme coin. Did you miss the story? Read about it HERE and HERE.

Despite these initial hiccups, the introduction of Base marks a significant step for Coinbase in its efforts to expand the decentralized application ecosystem and provide users with more on-chain opportunities.

The U.S. Securities and Exchange Commission (SEC) could be on the brink of greenlighting multiple Bitcoin spot exchange-traded funds (ETFs), according to prominent figures in the financial world. Cathie Wood, the CEO of ARK Invest, and Michael Novogratz, the founder of Galaxy Digital, both expressed optimism regarding the SEC's potential simultaneous approval of several spot Bitcoin ETFs.

For those unfamiliar with the term, a spot ETF is a type of investment fund that tracks the current, or "spot," price of an asset, like Bitcoin. Instead of dealing with future contracts or predictions, it's based on the actual price of Bitcoin at any given moment. This makes it a more direct way for investors to get exposure to the asset without having to buy or store the actual cryptocurrency. Importantly, while buying pressure on many ETFs doesn't directly influence the price of the underlying asset, with spot ETFs, it does. When investors buy shares of a spot ETF, the fund typically buys the corresponding amount of the asset, in this case, Bitcoin, which can directly impact its market price.

The SEC's decision is looming, and the approval of spot Bitcoin ETFs would mark a significant milestone in the integration of cryptocurrencies into mainstream finance. Such a move would provide traditional investors with a more accessible and regulated means to invest in Bitcoin, potentially leading to increased adoption and acceptance of digital assets in the broader financial landscape.

The U.S. Securities and Exchange Commission (SEC) has decided to challenge a recent court ruling concerning Ripple Labs and its cryptocurrency, XRP. In July, Judge Analisa Torres ruled that the sale of XRP to retail investors did not classify as a security. However, the SEC is now seeking an appeal on this decision, believing that it warrants a re-examination by an appellate court. Miss the initial decision? We covered it HERE.

The SEC's letter to Judge Torres emphasized the potential implications of her ruling on other pending court cases, such as the ones against Coinbase and Binance. The regulator highlighted another case against Terraform Labs, where a different judge rejected Torres' stance, suggesting that cryptocurrencies sold on exchanges could indeed be considered securities.

In the backdrop of these legal battles, the SEC's stance on Ripple and XRP has been closely watched by the crypto community. While Judge Torres' initial ruling was seen as a partial win for Ripple, indicating that XRP itself wasn't a security, it did leave room for interpretation. Torres clarified that while XRP sales to institutional investors might be viewed as securities, those made on exchanges to everyday traders would not fall under that classification. The SEC's decision to appeal highlights the ongoing complexities and debates surrounding the regulatory status of cryptocurrencies in the U.S.

That’s all for today. We’ll see you tomorrow.

“Bitcoin actually has the balance and incentives center, and that is why it is starting to take off.”

– Julian Assange, founder of Wikileaks