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More Coinbase red flags
One of the biggest victims of the recent dramatic drop in crypto prices is Coinbase. In Q1 2022, their head count grew 33% from last quarter and they said they want to triple head count by the end of the year. But YTD their stock dropped 74%, so they pivoted and are rescinding offers they made. They'll likely have to cut as well.
We spoke about Coinbase before. Mostly about rolling over to a ridiculous measure in Canada that forces the exchange to dox you to the government if you send more than $1,000 CAD to the wrong person or group. Also how all the crypto they custody is not a senior claim in bankruptcy. In short, Coinbase isn't good for their employees, customers or shareholders.
What do you do when you happen to be in an industry that's going through a rough time and capital markets are shifting right under your feet? Trim the fact, focus on your core product and continue to deliver to your customers? No, that's silly. Instead you bring in a real-time workplace feedback tool where employees can rank each other after every interaction! It should boost morale and reduce the amount of internal politics! What could go wrong?
I give Coinbase a lot of credit for their policy of no-politics at work. Most people working at a large organization have seen the creeping influence of politics in their work environment and think its gone too far. I also enjoyed listening to the founder Brian Armstrong. He came off as humble, sincere and thoughtful. But pretty much everything I read about the organization since then has been awful. I get it, everyone is freaking out a little about the market, especially in the crypto space. But Coinbase should be working to build trust and fight for the industry, not this petty corporate BS. Also whose bright idea was it to try and triple head count in a year? How could that possibly go well?
People invest in Coinbase or other crypto exchanges because they want some broad exposure to crypto. It's true that the rise of crypto exchange prices is primarily due to growing crypto valuations. But their stock almost always under-performs crypto in percentage terms. So what are you getting? A beta < 1 and counterparty risk.
Action
Volumes stayed up! Most of the week above 30 BNB. Can't complain about that. We even had 3 100+ BNB rounds
Winners and Losers
| Place | account | games played | won | won USD | Winnings Even Money | Average bet size |
| 1 | 0xfd9ec821cd07cbc34e3df70af49a9c0cad22a4f8 | 31 | 97.18 | 29,153.0 | 9.29 | 9.03 |
| 2 | 0x08cf44ae51ceeab42e989b95d4eccf02fa0c478c | 14 | 67.72 | 20,315.0 | 4.28 | 14.55 |
| 3 | 0xc2c58a2f0880351199822d4b58940fbd3e40f24c | 338 | 64.88 | 19,465.0 | -5.36 | 1.26 |
| 4 | 0x974c2e0dcd3ae9a12ed2224157f4eea61c7b3475 | 28 | 61.72 | 18,517.0 | 6.15 | 6.96 |
| 5 | 0xee156093c5069ee5752e169e4385e7a49d223310 | 28 | 55.98 | 16,795.0 | 3.97 | 9.07 |
| 6 | 0xe0b5455d4cfbaebc5cae43de2fa069bf943a62f5 | 100 | 37.26 | 11,178.0 | 9.12 | 4.1 |
| 7 | 0x5dbf4026e72f223d91ed4ab8da72f253b7019c37 | 322 | 34.44 | 10,331.0 | 35.45 | 0.87 |
| 8 | 0xbbd94b0332ab534dcb4c9440eb25382865cbdb8f | 9 | 31.54 | 9,461.0 | 0.05 | 13.93 |
| 9 | 0x7aad54b5d19169164efb0da86d02d2904e703b9e | 22 | 30.62 | 9,186.0 | 4.29 | 13.41 |
| 10 | 0x6d0e7c568a5724444939ad3032c50331138dc157 | 52 | 29.57 | 8,871.0 | -4.19 | 8.86 |
Our top winner is a whale. In fact, the top 2 winners are feeding the same aggregator as our top winner last week. Looks like there's still alpha to be made. The person behind this is running a sophisticated operation. He's funding the accounts from hot wallets, so you can't shadow his trades as the account keeps changing and theres no way to link the accounts to the aggregator. It's an expensive strategy because moving money into and out of binance could result in a taxable event, but with that kind of money, its probably worth it.
Let's look at the losers
| Place | from | games played | won | won USD | Winnings Even Money | Average bet size |
| 1 | 0x6b7c0c3dd332876c0cf41310a739e713de9199c3 | 271 | -151.19 | -45,356.0 | -37.69 | 2.75 |
| 2 | 0x3db2af670b0549545c164dbd7192b4911705c424 | 22 | -149.1 | -44,731.0 | -6.81 | 16.9 |
| 3 | 0xc8923536f8c1a348f15e87315740bb5933aeb4c9 | 384 | -115.01 | -34,504.0 | -8.89 | 4.44 |
| 4 | 0x8537884f7afeb99c15be5f8e53d575eeaa1e476f | 23 | -111.33 | -33,398.0 | -3.24 | 17.27 |
| 5 | 0x2563e690da0b98d1d3e4d03a99d8b2a75c2a7e32 | 461 | -98.37 | -29,512.0 | -46.42 | 1.49 |
| 6 | 0xc1f265e222c5a4b6c8c536f9cc138c648518b6ac | 593 | -79.22 | -23,767.0 | -36.57 | 1.47 |
| 7 | 0xc0bd221dc8bd58446d53b6043fadf8ec45cf5316 | 372 | -61.25 | -18,375.0 | -28.74 | 1.68 |
| 8 | 0xad483dc8c4482eafdbebbc98ea66a89e461cfbd9 | 1223 | -55.06 | -16,517.0 | -65.66 | 1.4 |
| 9 | 0xd600d38d463ffbba2b18251bcba93089833cc6b8 | 99 | -52.99 | -15,896.0 | -12.38 | 1.29 |
| 10 | 0x62168f9911a84e08994720ee803f3ef2707bfeb0 | 15 | -51.13 | -15,339.0 | -8.53 | 6.7 |
Another big week for losers! In fact, our #2 and #3 losers are linked with our #1 and #2 winners. Same pattern of trading, other transaction quirks and feeding the same aggregator. I guess it makes sense, to win big you gotta lose big.
As always, feel free to reach out with questions or comments or want my to highlight anything different on my weekly market recaps. If you like what you read and want to subscribe to receive an email when a new post is published, click here.
Good luck and bet responsibly!