Coinbase rallies more than 60% in same month that FTX and Binance founders brace for prison
Brian Armstrong, CEO of Coinbase, slammed the U.S. Securities and Exchange Commission. He also said the cryptocurrency exchange is looking to invest more outside of the U.S.
Carlos Jasso | Bloomberg | Getty Images
In a month that saw two of the crypto industry’s leading figures headed on the path to prison, Coinbase shares rocketed more than 60%, their second-best monthly performance since the cryptocurrency exchange went public in 2021.
Bolstered by rallies in bitcoin and ether as well as crises at key competitors, Coinbase has been one of Wall Street’s best bets all year, climbing more than 250% in the first 11 months of 2023.
For early holders of the stock, the rebound helps ease the pain of 2022, when Coinbase lost 86% of its value as soaring inflation and rising interest rates pushed investors out of crypto and high-growth tech companies, and into assets deemed safer in a recession.
Tech stocks have roared back this year, particularly those tied to the artificial intelligence boom and crypto. Coinbase has the added benefit of having survived the so-called crypto winter, while so many of its rivals disappeared or downsized.
The industry fallout came to a head this month, when Sam Bankman-Fried, founder of former Coinbase rival FTX, was found guilty of seven criminal fraud counts tied to the collapse of his exchange and the theft of customer funds. His conviction landed on Nov. 2 after a monthlong trial.
Less than three weeks later, on Nov. 21, Binance founder Changpeng Zhao pleaded guilty to violations of the Bank Secrecy Act for failing to implement an effective anti-money laundering program and for willfully violating U.S. economic sanctions.
Combination showing Former FTX CEO, Sam Bankman-Fried (L) and Zhao Changpeng (R), founder and chief executive officer of Binance.
Getty Images | Reuters
Bankman-Fried, who faces potential life behind bars, is scheduled to be sentenced in March. Zhao’s sentencing is set for February. While guidelines suggest a sentence of 12 to 18 months, the Justice Department could push for a lengthier punishment for the Binance founder.
Unlike FTX, which filed for bankruptcy in late 2022, Binance is still standing, though now without Zhao, who agreed to step down as CEO as part of the plea deal. Even before that, the company was seeing a plunge in trading, with volume down by two-thirds between the first and third quarters of the year, according to crypto analyst site CoinGecko.
With assets of more than $65 billion on the platform, Binance remains the world’s largest crypto exchange globally. But its market share fell from over 60% in February to under 50% in September, “an indication that the exchange may be losing its grip on the industry as regulators continue to pressure it,” CoinGecko said.
In the first 24 hours after the Justice Department announced its $4.3 billion settlement with Binance, customers pulled more than $1 billion from the exchange. Liquidity also dropped 25% in the immediate aftermath of the announcement as market makers pulled back their positions, according to data provider Kaiko.
A Binance spokesperson told CNBC in a statement that Zhao appeared in court “to protect our users and to ensure the longevity of our company.”
“Binance’s resilience has been tested unlike any other exchange around today,” the spokesperson said. “Yet, we continue to operate the world’s largest cryptocurrency exchange by volume. In fact, we currently see a climbing percentage of institutional user transactions.”
Coinbase is the fourth-biggest global exchange by daily volume, according to CoinGecko. It’s the only one that’s publicly traded in the U.S. and has a market cap of close $30 billion.
In a report to clients on Wednesday, analysts at Mizuho noted that Coinbase shares are up about 20% since Zhao’s settlement, a rally that’s likely “in anticipation of potential share gains for COIN in wake of outflows from Binance, the industry’s largest exchange,” they wrote. Coinbase shares fell 2.4% to $124.72 on Thursday, wiping out some of their recent gains.
Mizuho raised its price target on the stock to $35 from $31, while keeping its underperform rating, which it’s maintained since December.
‘Turn the page’
A Coinbase spokesperson declined to comment for this story, but CEO Brian Armstrong told CNBC’s Joumanna Bercetche earlier this week that the Binance settlement allows the crypto industry to move past a spate of scandals.
“The enforcement action against Binance, that’s allowing us to kind of turn the page on that and hopefully close that chapter of history,” Armstrong said. “I think that regulatory clarity is going to help bring in more investment, especially from institutions.”
Both Coinbase and Binance still face legal battles with the Securities and Exchange Commission, which was noticeably absent from the Binance settlement. Meanwhile, Coinbase executives have floated the idea of leaving the U.S. altogether for a jurisdiction with hard-and-fast rules on crypto, should the company be unable to come to a resolution with the SEC.
Wall Street appears to be shrugging off that concern.
Analysts at Needham, who recommend buying Coinbase shares, wrote in a report on Nov. 21 that the company “exited the crypto ‘winter’ better positioned than in the prior up cycle.” They also noted that in addition to FTX’s failure and Binance’s retreat, crypto trading platform Bittrex has also exited the market.
Bittrex said on Nov. 20, that effective Dec. 4, “all trading activity on Bittrex Global will be disabled,” and it encouraged customers “to log into their account and withdraw assets as soon as possible.” In April, the SEC charged Bittrex and its ex-CEO with operating an unregistered exchange.
Yet there may be a new competitive threat on the horizon.
U.S. regulators are expected to soon approve the first U.S. spot bitcoin exchange-traded funds, which would allow investors to buy into digital currency directly through the same mechanism they use to buy stock and bond ETFs. Top asset managers, including BlackRock, WisdomTree and Invesco, have filed applications with the SEC.
Regulatory approval would open up many more avenues for people to buy bitcoin. While Coinbase allows investors to buy a variety of cryptocurrencies, bitcoin accounted for 38% of transaction volume in the third quarter and almost the same percentage of revenue. For casual investors who just want some exposure to bitcoin, there will potentially be additional ways to buy, including through their primary online brokerage.
JPMorgan Chase analysts wrote last week that crypto ETFs would likely be good for Coinbase in the short term but more problematic as time passes.
The initial boost would come from custody revenue tied to the ETFs. Most of the big asset managers jumping into market, including BlackRock, Franklin Templeton and WisdomTree, have picked Coinbase for custody services, which involves the storage and safekeeping of the assets.
However, the longer-term concern, according to JPMorgan, is that fewer people will need Coinbase accounts, leading to pricing pressure.
“We see many novice investors never going beyond these flagship tokens and thus never needing the services of a Coinbase,” wrote the analysts, who have a neutral rating on the stock and an $80 price target. “We also see the ETF markets as more transparent, efficient and lower cost to execute and we see the potential for a migration to ETFs for cheaper exposure and trading driving Coinbase to lower fees.”
WATCH: Former SEC enforcement chief on ‘casualness’ in crypto compliance
Environment
Rivian (RIVN) to open a UK office that will focus on AI and autonomous driving technology
American EV automaker Rivian is expanding across the pond into the UK, hoping to tap into the region’s talent pool in artificial intelligence engineering.
Rivian is a growing American EV brand with expanding office footprints as much as its lineup of unique electric trucks and SUVs. The company is currently headquartered in Palo Alto, California, with its main production facility located in Normal, Illinois alongside plans for a second production footprint about 40 minutes outside of Atlanta, Georgia.
Other US locations currently include offices in Irvine and Carson, CA, Wittmann, AZ, and Plymouth, MI. Outside of the US, Rivian operates out of offices in Vancouver, BC, Canada, Amsterdam, Netherlands, and Belgrade, Serbia.
This morning, Rivian announced its latest international office in London, UK, which will become an AI-centric development hub.
Rivian to open AI Hub in the UK
According to a release from Rivian early this morning, it sees the UK as rapidly becoming a world leader in artificial intelligence engineering, and is looking to tap into that talent pool with the new international office.
While Rivian’s current Autonomy Platform enables drivers to utilize hands-free, eyes-on highway driving, the American automaker intends to continue to evolve such tech to offer greater levels of autonomous capabilities.
Rivian shared that its second-generation EVs were designed with an “AI-centric approach.” As its Gen2 vehicle fleet continues to develop and grow, the automaker has been collecting more and more data to help accelerate the improvements to ADAS technology. Per the company:
Rivian believes the combined strength of its perception platform and in-vehicle data infrastructure will enable it to build a Large Driving Model, unlocking unparalleled understanding of complex driving scenarios and accelerating the path to safer, more capable autonomous features.
Rivian said the future work done at its new UK AI hub will enable its EVs to improve in the future via over-the-air (OTA) updates. Details remain light, but Rivian shared plans to host an “AI and Autonomy Day” later this year and promised to share more about its product and technology roadmap.
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Waev, the company best known for its iconic GEM electric low-speed vehicles (LSVs), just unveiled a brand new lineup of commercial electric carts and LSVs. And this time, they’re not messing around when it comes to utility. Dubbed the Fusion line, these new lithium-ion-powered vehicles include mashups plucked from the worlds of golf carts, street-legal shuttles, and jobsite pickup trucks.
The Fusion lineup includes six different models: three designed for people-moving and three built for utility work. But all six still seem to be aimed squarely at commercial, municipal, and industrial fleets.
Whether that’s running security at a stadium, shuttling guests at a resort, or hauling equipment around a worksite, there looks to be something in the Fusion family that probably fits the bill.
On the people-moving side, Waev is offering 4, 6, and 8-passenger models, all of which feature a flip-up rear seat that converts into a cargo deck, a near ubiquitous feature among modern golf carts and LSVs with rear-facing benches that helps them pull double duty as a light utility vehicle. The feature gives them added flexibility for things like maintenance staff, hospitality transport, or even large campus tours, letting them carry a large number of passengers, yet still be capable of stacking boxes or equipment in the rear.
The utility versions look a bit different with more muted matte black bodywork, plus come with electrically-actuated hydraulic dump beds, 2-inch ball hitches, and even orange seat belts for jobsite visibility. It’s harder to forget to put on the seatbelt when it’s blindingly orange.
And yes, the Fusion Utility Long Bed basically looks like a pickup truck built on a golf cart chassis, which I find equal parts strange and endearing. But then again, I’m the guy who infamously kicked off the great American mini-truck trend a few years ago when my hilarious little tiny-truck went viral, so maybe I’m a bit biased when it comes to fun little utility vehicles.
All Fusion models are available in both “cart” and “LSV” configurations. The carts are speed-limited to 19 mph (30.5 km/h) and come with serial numbers, making them street-legal only in limited areas that have passed local ordinances permitting golf carts to use public roads.
The LSV versions get full VINs, meet federal low-speed vehicle safety standards (meaning over a dozen regulations on manufacturing standards and safety equipment), and can be driven up to 25 mph (40 km/h) on public roads where LSVs are permitted by state law.
Waev is sticking with lithium-ion power here, specifically a 105Ah Marxon pack that’s both heated and insulated for cold-weather use. That’s a big step up from the old-school lead-acid setups still found in some fleet carts (and, if we’re being honest, still offered on some of Waev’s other vehicles).
The company claims to offer automotive-grade manufacturing processes and reliability on its vehicles, along with Bluetooth diagnostics and a smartphone app for managing the fleet.
Other upgrades include LED lighting, back-up cameras, AVAS pedestrian alert systems, and standard three-point seat belts for all passengers. Optional extras like ladder racks, beacon lights, and upgraded tires make it even easier to tailor each unit to the specific job at hand.
The Fusion line slots into Waev’s already broad family of low-speed EVs and fleet vehicles, including the steel-bodied Taylor-Dunn utility vehicles, Tiger heavy-duty tow tractors for airports and warehouses, and the classic GEM lineup that’s been a staple of street-legal fleet transport since the late ‘90s.
It also looks like Waev isn’t just trying to sell the hardware here – it’s pushing hard on full-service fleet support, too. The company is leaning on an extensive dealer network across the U.S., Mexico, Canada, and Australia, and all Fusion models are available through Sourcewell and Canoe procurement programs for simplified public-sector purchasing.
One big thing we’re not seeing, though, are the prices. It’s more of a “contact us for a quote” situation, which means exactly what you think it means. We’ll try to learn more, but don’t expect to make it out of the lot without a measurably lighter wallet.
Electrek’s Take:
This is the kind of product line that probably won’t turn heads in your local grocery store parking lot, but it’s exactly the kind of quiet EV revolution that’s transforming fleets behind the scenes. Lithium-ion golf carts and LSVs that can tow, haul, and shuttle without the noise or emissions of gas engines? That’s a win for everyone –from municipal fleets to private campuses.
And frankly, I’m here for the golf cart pickup truck vibe. Street legal, work-ready, and just weird enough to be cool. The fact that the tailgate seems to swing all the way down and doesn’t lie flat like a normal pickup truck’s gate was a swing-and-a-miss by the designers – I don’t know how that got through – but everything else looks great! And hey, I guess I could always add a pair of tailgate cables if I wanted.
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Tesla’s retro-futuristic diner with Superchargers and giant movie screens is ready to open, and I have to admit, it looks pretty sick.
This project has been in the works for a long time.
In 2018, Elon Musk said that Tesla planned to open an “old school drive-in, roller skates & rock restaurant at one of the new Tesla Supercharger locations in Los Angeles.” It was yet another “Is he joking?” kind of Elon Musk idea, but he wasn’t kidding.
A few months later, Tesla applied for building permits for “a restaurant and Supercharger station” at a location in Santa Monica. However, the project stalled for a long time, apparently due to local regulations.
Nevertheless, Tesla still moved forward with a Supercharger at the location, but it had to move the diner project to Hollywood. In 2022, Tesla filed the construction plans with the city, giving us the first look at what the automaker intends to build.
In 2023, the automaker broke ground on the site of the diner.
7 years after being originally announced, the project appears now ready to open:
Musk said that he ate at the diner last night and claimed that it is “one of the coolest spots in LA.” He didn’t say when it will open, but Tesla vehicles have been spotted at Supercharger and people appear to be testing the dinning experience inside.
A Tesla Optimus Robot can be seen inside the diner on a test rack. It looks like Tesla might use one for some tasks inside the diner.
Earlier this year, Tesla integrated the diner into its mobile app – hinting at some interaction through the app – possibly ordering from it.
Electrek’s Take
I think it looks pretty cool. I am a fan of the design and concept.
However, considering the state of the Tesla community, I don’t think I’d like the vibes. That said, it looks like Tesla isn’t prominently pushing its branding on the diner.
You can come and charge there, but it looks like Tesla is also aiming to get a wider clientele just for dining.
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