Public Keys: Coinbase Cashes In, IBIT Slips, and REX Spins Volatility Into Gold

Public Key is a weekly summary. decryption Track major publicly traded crypto companies. This week: Coinbase’s Q3 forecasts are weak, BlackRock’s IBIT drops sharply, and REX Shares’ new ETF absorbs volatility in crypto stocks.

Coinbase volatility tailwind

Coinbase on Thursday reported third-quarter revenue of about $1.9 billion and trading revenue of $1 billion, beating expectations. This is a sharp rebound as spot trading volume returns to the exchanges.

The company also said it is off to a strong start in the fourth quarter, with trading revenue already reaching $385 million in October. Beyond trading, Coinbase also benefited from tailwinds thanks to subscriptions and services such as staking, custody services, and interest rates. The company also reported that its Ethereum L2, Base, is profitable.

The company, which trades on the Nasdaq under the ticker COIN, closed up 4.65% on Friday. However, the stock was still 3% lower than at the beginning of the week.

This earnings report confirms that volatility and volume tend to drive COIN returns, although it can be hellish for traders.

And to further enhance its effectiveness, the company has focused on making more assets available to investors. CEO Brian Armstrong said the expansion took Coinbase from “approximately 300 assets to over 40,000 assets in the U.S.” with the DEX integration, adding that the quarter also included the launch of “CFTC-regulated 24/7 perpetual-style futures in the U.S.”

Criminals are all the rage among traders, but some industry experts frown on how much risk they pose to the market.

IBIT traders are scared

Speaking of volatility, financial institutions pulled money from Bitcoin ETFs after Bitcoin fell below $110,000 on Thursday.

BlackRock’s iShares Bitcoin Trust (IBIT) accounted for nearly half of the Bitcoin ETF category’s outflows on Thursday, with $290.8 million worth of withdrawals on a day when the Bitcoin Spot ETF posted a $488.4 million loss.

Traders sold $149.3 million worth of shares at IBIT on Friday, accounting for 77% of the day’s outflows, according to data from Farside Investors.

But IBIT remains a shining star in BlackRock’s ETF catalog. On a cumulative basis, lifetime net inflows into IBIT remain significant, with more than $88 billion in assets under management. The structural introduction story does not change in one session. Only the profit and loss for that week will change.

Another REX volatility play

New York-based REX Shares has built a reputation for unconventional ETFs. Its latest offering treats volatility in stocks, including crypto companies, like a feature rather than a bug.

REX IncomeMax Option Strategy ETF, traded on the Nasdaq under the ticker ULTI, is an actively managed fund that targets some of the most volatile U.S. stocks on the market. And, in fact, it’s no surprise that it includes crypto-exposed names such as crypto miner Core Scientific, crypto exchange Gemini, and crypto financier Figure.

The portfolio extends beyond cryptocurrencies. The fund works by operating a dynamic options book with a combination of puts and calls that convert price movements into weekly distributions while trying to limit tail risk.

For investors who want exposure to “crypto beta with equity” trading but prefer an income overlay, ULTI is a notable entrant. This is another sign that Wall Street continues to package crypto volatility into different wrappers.

Other keys

stop the core fusion dance: Investors in Bitcoin mining company Core Scientific have called off the company’s $9 billion merger with AI computing company Coreweave.

Please remit this: Western Union, a major remittance company, has registered WUUSD as a trademark. But confusingly, the currency appeared after the company announced that its planned stablecoin would have the ticker USDPT. It may be a flag put up to prevent others from using the ticker.