Latest news with #Stablecoins
Axios
13-05-2025
- Business
- Axios
Exclusive: Dems press Trump to divest from stablecoin
Senate Democrats are asking President Trump to divest from his cryptocurrency empire as he embarks on his Middle East trip this week, Axios has learned. Why it matters: Democrats have raised corruption concerns over the Trump family's crypto dealings. Driving the news: Sens. Elizabeth Warren (D-Mass.) and Chris Van Hollen (D-Md.) urged Trump on Monday to divest from his stablecoin before reaching any agreements with foreign governments on his trip abroad. The Democrats warned against allowing foreign governments to use the stablecoin to influence Trump's decision making. The New York Times reported earlier this month that Trump's family members could profit from the $2 billion worth of their Stablecoins that would be used for a foreign transaction involving an Abu Dhabi investment fund. What they're saying: " You can eliminate at least one venue for corruption ... by divesting all of your interests and your family's interests" in the stablecoin, the lawmakers wrote. Democrats see the potential for high levels of corruption with Trump's crypto deals, and used some of those concerns to derail a bipartisan crypto regulation bill last week. Between the lines: It's not just the deal involving the Abu Dhabi investment fund that has spooked Democrats. The official website for Trump's meme coin invited its top 220 investors to an "intimate private dinner" with the president later this month. References to the White House were later scrubbed from the website. Zoom out: Trump is eyeing $1 trillion worth of deals and investments during his trip to the Middle East this week, Axios reported on Monday.
NBC News
08-05-2025
- Business
- NBC News
Stablecoins are back in focus as Democrats reject legislation approving their use
Stablecoins have come into focus on Thursday, as Democrats opposed legislation aimed at creating a legal pathway for the digital tokens. Stablecoins are privately issued digital currencies. Proponents like to refer to them as 'digital dollars' that are akin to in-store credits a consumer might find at a retailer. Unlike other forms of crypto, like Bitcoin, whose values fluctuate, most stablecoins' values are 'pegged,' or set at equivalent to, real-world currencies like the U.S. dollar. Stablecoins are in an early stage of evolution and, for now, most consumers don't interact directly with them. Instead, they are primarily used by large crypto exchanges and a growing group of traditional financial institutions as part of 'back-end' functions that involve converting crypto into regular currencies, and vice-versa. If an exchange operates in multiple countries, and/or trades in multiple cryptocurrencies — but would prefer to avoid having the value of its holdings fluctuate — it will usually seek to convert its holdings into stablecoins. 'A lot of [companies] do global card processing and use different payment service providers,' said Kevin Lehtiniitty, founder of a stablecoin platform. 'They use Stablecoins to repatriate those funds back to U.S.' So far, stablecoins have been operating in a legal gray zone. The GENIUS Act that ha s been under consideration in the Senate — with an equivalent bill in the House — seeks to provide standards for firms that issue stablecoins. Among those standards is a consideration for how much dollar reserves the firms must have on hand when they issue a coin, what rights customers have for redeeming them, and what protections they offer so that 'runs' on the stablecoins are avoided if something breaks down. Historically, the stablecoin market has not been immune from major collapses, and some regulators remain sensitive about granting too much leeway to stablecoin operators. The Securities and Exchange Commission's lone remaining Democrat, Caroline Crenshaw, has criticized President Trump-backed SEC's recent statement on stablecoins as containing 'legal and factual errors' that 'paint a distorted picture' of the tokens that 'drastically understate' their risks. In particular, she said, most stablecoins are issued through third-party exchanges that have been 'lightly regulated or not regulated at all.' The SEC's policy feeds 'a dangerous industry narrative about the supposed stability and safety of these products,' Crenshaw wrote. 'Make no mistake: There is nothing equivalent about the U.S. dollar and unregulated, privately-issued crypto assets that are opaque ... uncollateralized, uninsured, and laden with risk at every step of their multi-layer distribution chain. They are risky business.' But stablecoin advocates say the new legislation would have helped provide consumer protections while allowing innovation to occur. In particular, the bill provided reserve requirements, similar to ones that regular banks face, that ensured a stablecoin user is able to redeem their holdings for the exact amount they are worth. 'A lot of safety measures are being added to these bills,' said Cody Carbone, CEO of the crypto industry's primary lobbying group, The Digital Chamber, adding that they 'ensure that we can keep financial stability in place if there's a black swan event.'
Globe and Mail
05-05-2025
- Business
- Globe and Mail
Should You Add COIN Stock to Your Portfolio Ahead of Q1 Earnings?
Coinbase Global Inc. COIN is expected to witness an improvement in its top and bottom lines when it reports first-quarter 2025 results on May 8. The Zacks Consensus Estimate for COIN's first-quarter revenues is pegged at $2.2 million, indicating a 33.4% increase from the year-ago reported figure. The consensus estimate for earnings is pegged at $2.06 per share. The Zacks Consensus Estimate for COIN's first-quarter earnings has moved 2.4% down in the past seven days. The estimate suggests a year-over-year increase of 23.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) COIN's Decent Earnings Surprise History COIN's earnings beat the Zacks Consensus Estimates in three of the trailing four quarters and matched in one, the average surprise being 46.15%. What the Zacks Model Unveils for COIN Our proven model does not conclusively predict an earnings beat for Coinbase this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat. This is not the case, as you can see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Earnings ESP: COIN has an Earnings ESP of -5.23%. This is because the Most Accurate Estimate of $1.93 is pegged lower than the Zacks Consensus Estimate of $2.06. Coinbase Global, Inc. Price and EPS Surprise Zacks Rank: COIN currently has a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here. Factors Likely to Shape COIN's Q1 Results The first-quarter performance of Coinbase is likely to have benefited from increased trading volume due to higher volatility. Crypto trading remains a major revenue driver for COIN. The Zacks Consensus Estimate for trading volume is pegged at 404 million, indicating a 29.4% increase from the year-ago reported quarter. Both consumer and institutional trading are likely to have increased in the to-be-reported quarter. The intensifying focus on international expansion, growth of derivatives and spot trading and integration of USD Coin into the crypto economy are likely to have fueled the two largest revenue streams — trading fees and Stablecoins. Higher crypto asset volatility, coupled with improved crypto asset prices, is likely to have driven the growth of Coinbase One subscribers as well as unit inflows across staking, custody, and USDC assets. The Zacks Consensus Estimate for transaction revenues is pegged at $1325 million, indicating an upside of 23% from the year-ago reported quarter. Coinbase also expects transaction expenses to be in the mid-to-high teens as a percentage of net revenues. Subscription and services revenues are likely to have been aided by blockchain rewards revenues, Stablecoin revenues and Coinbase One subscription revenues. A gradual shift to subscription and services revenues, which ensures more stability, from transaction fee revenues is likely to have driven an upside. Coinbase expects first-quarter subscription and services revenues to be in the range of $685-$765 million. The Zacks Consensus Estimate is pegged at $707 million. Coinbase expects technology and development and general and administrative expenses to be in the range of $750-$800 million, which indicates a rise in variable expenses related to elevated trading volume as well as payroll taxes and headcount. An increase in digital marketing spending is likely to have increased sales and marketing expenses. COIN projects sales and marketing expense to be between $235 million and $375 million due to potential variability in performance marketing and USDC assets in the product suite. Technology investments aimed at improving operational efficiency, combined with disciplined cost control, are likely to have led to lower expenses and enhanced profit margins. COIN expects technology & development and general & administrative expenses to increase to $690-$730 million. COIN's Price Performance & Valuation The stock underperformed the industry, sector and the S&P 500 in the first quarter of 2025. The stock is trading at a price-to-earnings ratio of 22.47, higher than the industry's 15.29. Shares of Robinhood Markets HOOD and Interactive Brokers Group, Inc. IBKR, two other crypto-oriented stocks, are also trading at multiples higher than the industry average. Investment Thesis Coinbase looks poised to benefit from higher crypto asset volatility and prices, and increased adoption of its assets in a pro-crypto environment. It has been deepening its roots in international markets. Strengthening banking connections, locking of new licenses and expanding tailor-made product ranges to meet unique customer preferences should help COIN grow rapidly in the long run. A gradual shift to subscription and services revenues from transaction fee revenues is likely to have ensured stability in revenues. Coinbase has been investing in infrastructure and foundational platforms like Base, designed to optimize Ethereum's infrastructure by increasing the network's speed and affordability. The rise in stablecoin adoption has been driving Stablecoin revenues. The continued growth of Coinbase One subscribers is expected to have further boosted the company's revenues. COIN remains focused on maintaining a low-cost structure. However, return on equity, signifying the company's ability to use shareholders' funds to generate returns, compares unfavorably with the industry average. COIN's debt level has been increasing but compares favorably with the industry average. Also, an improvement in times interest earned, which compares favorably with the industry average, offers some respite. Cash and cash equivalents have been improving. What Should Investors Do Now With COIN Stock? The Trump administration is swiftly advancing its efforts to fulfill its vision of establishing the United States as the world's leading hub for cryptocurrency innovation. In a pro-crypto operating environment, COIN, the crypto leader, is poised to gain from its efforts to accelerate growth, increase market share in spot trading on consumer and institutional trading platforms and improve trading experience, along with continued innovation and cost-control initiatives. However, given its premium valuation and weak return on equity, new investors can wait for some more time before taking a position in the stock. Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report Coinbase Global, Inc. (COIN): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
Axios
02-05-2025
- Business
- Axios
Scoop: Trump coins spark Democratic feud over crypto legislation
Democratic leaders engaged in a tense, closed-door debate Thursday on the fate of a crypto regulation bill — and the best way to force changes to legislation that could hit the floor this month, according to people familiar with the matter. Why it matters: Crypto divides Democrats on policy and politics. Some progressives, like Sen. Elizabeth Warren (D-Mass.), are concerned about fraud and corruption. Others, like Sen. Kirsten Gillibrand (D-N.Y.), are eager to provide firm guidelines and regulatory certainty for the industry. 🔥 Two causes fueled the latest flareup: The New York Times reported that President Trump's family members could profit from the $2 billion worth of their Stablecoins that would be used for a foreign transaction involving an Abu Dhabi investment fund. Then Senate Majority Leader John Thune (R-S.D.) announced Thursday he was moving forward a procedural vote, as early as next week, on the GENIUS Act legislation that Gillibrand is cosponsoring. Driving the news: Those developments prompted a concerned Minority Leader Chuck Schumer (D-N.Y.) to ask Gillibrand for an update about the bipartisan bill, which would establish the first-ever stablecoin regulatory framework. Gillibrand ticked through the changes she has fought for that she believes address Democratic concerns. A handful of lawmakers, including Warren, argued against passing the bill in its current form. Warren noted many Democratic amendments were rejected in committee, especially those that address potential corruption. Sen. Jeff Merkley (D-Ore.) took aim at the Trump family and possible conflicts of interest. "We should file an amendment to end the sale of coins by elected officials," he said. Schumer cautioned senators to avoid committing to the legislation. He wants Democrats to have maximum leverage to make changes to the bill. What they're saying:"Sen. Gillibrand has worked closely with Sen. Schumer on providing clear regulations for stablecoins, and that collaboration is continuing as we work to pass the strongest bill possible," said Evan Lukaske, a Gillibrand spokesperson. Zoom in: Five Democrats voted for the bipartisan legislation in committee in March, including another Democratic cosponsor, Sen. Angela Alsobrooks (D-Md.). Many Democratic amendments were defeated and it ultimately passed 18-6 in committee. If all Republicans support the bill — and all five committee Democrats continue to support it — the legislation would need just one more Democrat to reach the 60 votes necessary for cloture. Warren and Merkley argued the bill doesn't provide basic safeguards against corruption, pointing to the New York Times story.
Yahoo
03-04-2025
- Business
- Yahoo
COIN vs. HOOD: Which Crypto Player is a Safe Investment Bet?
Coinbase COIN and Robinhood HOOD are two names that are discussed simultaneously when it comes to topics related to cryptocurrency. Both these stocks have been under the spotlight, given President Donald Trump's crypto favoritism. Movement in Bitcoin, the largest cryptocurrency, impacts these stocks. The easing of regulatory control to accelerate crypto adoption, including institutional, raises optimism. Integrating artificial intelligence (AI) and blockchain technology to enhance security and efficiency is appreciable. However, cyber threats remain a challenge. But as an investment option, which stock is more attractive? Let's closely look at the fundamentals of these stocks. America's largest registered crypto exchange is set to benefit from higher crypto asset volatility and prices. Trump's pro-crypto inclination and focus on regulatory clarity further benefit Coinbase. The company generated 83% of its total revenues in the United States, which is envisioned as a crypto hub. Total revenues more than doubled in 2024, which also marked two straight years of positive adjusted revenues, primarily driven by trading volume, should continue to improve. In 2024, trading volume more than doubled year over year, reflecting an increase in both the total market and market share in the United States. Transaction revenues more than doubled year over year in an effort to enhance crypto utility, Coinbase invests in infrastructure and foundational platforms like Base — Layer 2 solution. Base is the low-cost Layer 2 solution that helps blockchains scale. Initiatives to enhance the utility of crypto via Base and Stablecoins are is a fundamentally strong company. It ended 2024 with $9.3 billion in USD resources, which is defined as cash & cash equivalents and USDC, up $3.8 billion year over has been decreasing over the past several quarters while total debt capital ratio has been improving. Also, its higher times interest earned implies that the company can comfortably service its expects Coinbase to be the platform for companies that are trying to integrate escalating expenses due to higher transaction expenses and other operating expenses tend to weigh on asset price risk could adversely impact operating results. A decline in the market price of Bitcoin, Ethereum and other crypto assets could have an adverse effect on earnings, the carrying value of crypto assets and future cash flows. This may also affect liquidity and the ability to meet ongoing obligations. Robinhood has evolved from a brokerage firm mainly trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Robinhood continues to diversify its product base to acquire new clients and gain market share. While transaction-based revenues are expected to benefit from the company's efforts to become a leader in the active trader market, increased retail participation and secular tailwinds, such as a higher mobile banking population and an improvement in net interest revenues, should also drive the top product innovations through vertical integration will likely expand its client base, enabling greater operating leverage and paving the way for sustained profitability. By controlling costs, the company has been successfully improving its margin. Robinhood operates in a highly regulated industry and is subject to the scrutiny of numerous authorities. Exposure to regulatory risks, resulting in hefty fines and restrictions, may affect its has been incurring significant SBC expenses relative to its net revenues. Though the company aims to improve its compensation arrangement, significant SBC expenses will continue to dilute shareholders' value in the near term. The Zacks Consensus Estimate for COIN's 2025 revenue implies a year-over-year increase but the same for EPS implies a 3.7% decline. EPS estimates have however moved northward over the past seven days. Image Source: Zacks Investment Research On the contrary, the Zacks Consensus Estimate for HOOD's 2025 revenues and EPS implies a year-over-year increase of 25.4% and 34.9%, respectively. EPS estimates, however, moved southward over the past seven days. Image Source: Zacks Investment Research Coinbase is trading at forward earnings multiple of 23.83X, below its median of 25.02X over the last five years. HOOD's forward earnings multiple sits at 27.75X, above its median of negative 10.24X over the last five years. Image Source: Zacks Investment Research Being the largest crypto exchange, COIN's performance is solely dependent on crypto movements. In contrast, HOOD, along with cryptocurrency, offers stocks, options and exchange-traded funds, among others, providing a diversified portfolio to navigate concentration challenges. Both companies are expanding internationally, venturing across Europe and Asia Pacific shares have gained 131.3% in the past year, while COIN has lost 26.7%. While COIN sports a Zacks Rank #1 (Strong Buy), HOOD currently carries a Zacks Rank #2 (Buy). Still, at present, HOOD seems a safe investment can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Coinbase Global, Inc. (COIN) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
