Public Keys: Coinbase Cashes, IBIT Slips, and REX Turns Volatility into Gold

Public Keys is a weekly collection of Declutter that tracks the most important listed crypto companies. This week: Coinbase beats Q3 estimates, BlackRock’s IBIT sees a sharp pullback, and REX Shares’ new ETF benefits from crypto stock volatility.

Coinbase’s volatility in the back

Coinbase beat expectations Thursday with third-quarter revenue of about $1.9 billion and transaction revenue of $1.0 billion. That is a sharp recovery now that spot volumes are returning to the exchange.

The company also said the fourth quarter is off to a strong start, with transaction revenue already reaching $385 million in October. In addition to trading, Coinbase benefited from tailwinds thanks to subscriptions and services: staking, custody services, interest. The company also reported that the Ethereum L2 it released, Base, was profitable.

The company, which trades on the Nasdaq under the COIN ticker, ended Friday with a gain of 4.65%. But the share price was still 3% lower than at the start of the week.

The earnings report underlines that volatility and volumes — while they can be hell for traders — tend to boost COIN’s bottom line.

And to amplify that effect, the company has focused on making more and more assets available to investors. The expansion has taken Coinbase from “approximately 300 to over 40,000 assets in the US” through DEX integrations, said CEO Brian Armstrong, who added that the quarter also included the first launch of “CFTC-regulated 24/7 perpetual futures in the US.”

Offenders are all the rage among traders, but some industry experts have raised eyebrows at the amount of risk they introduce to the markets.

IBIT traders were shocked

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

BlackRock’s iShares Bitcoin Trust, or IBIT, was responsible for nearly half of the Bitcoin ETF category’s outflows on Thursday, when it saw $290.8 million in withdrawals on a day when Bitcoin spot ETFs lost $488.4 million.

On Friday, IBIT saw traders sell $149.3 million worth of shares, accounting for 77% of the day’s outflows, according to data from Farside Investors.

But IBIT is still BlackRock’s shining star in its ETF catalog. On a cumulative basis, IBIT’s lifetime net inflows remain enormous, with more than $88 billion in assets under management. One session does not change the structural adoption story, only the profit and loss statement of the week.

Another REX volatility game

New York-based REX Shares has built its reputation on unconventional ETFs. The latest offering treats volatility in stocks – including crypto companies – as a feature, rather than a bug.

The REX IncomeMax Option Strategy ETF, which trades on the Nasdaq under the ULTI ticker, is an actively managed fund that focuses on some of the most volatile U.S. stocks on the market. And it’s actually no surprise that it includes crypto-exposed names like crypto miner Core Scientific, crypto exchange Gemini, and crypto lender Figure.

The portfolio also goes beyond crypto. The fund works by managing a dynamic options book with a mix of puts and calls that convert price movements into weekly payouts while attempting to limit tail risk.

For investors who want exposure to the “crypto beta via stock” trading but prefer an income overlay, ULTI is a notable newcomer – and another sign that Wall Street continues to wrap crypto volatility in different packages.

Other keys

Stop the Core Fusion dance: Bitcoin miner Core Scientific’s investors have halted the company’s $9 billion merger with AI computing firm CoreWeave.

Transfer this: Western Union – yes, the wire transfer heavyweight – has registered the trademark WUUSD. But confusingly, it appeared after the company said USDPT would be the ticker for its planned stablecoin. It could simply be a flag planted to prevent others from using the ticker.