Coinbase at risk?
Hey, I'm here again! Yes, the crazy dude who writes stuff on the internet!
Do not forget to follow all my advice if you want to lose your family because you have put the rent money in "coins that are worth cents but can be worth thousands of dollars"
The latest news about Coinbase is driving FUD around the exchange and as always there is noise, I have spent a little time trying to find out a little more.
The undeniable facts are that Coinbase is downsizing (around 20% layoffs) and also cutting costs with its decision to remove the referral program. I haven't heard anything about their learn and earn program but I wouldn't be surprised if they had eliminated it as well or will do so in a few weeks. From these facts, many have rushed to say that it is the next to fall. Before continuing I remind you as always, that I am just The Crazy Dude, do not go running to withdraw YOUR savings if you have not done your research first.
Another fact that is very interesting to me is that
Circle (the company that manages USDC in consortium with Coinbase) has recently published an audit (a good one, not like Tether's) to reflect the reliability of USDC. In the said audit, they have declared that approximately 25% of USDC assets are backed by one dollar each and the remaining 75% is backed by US debt bonds.
Is Coinbase going to fall?
The facts are not explanatory since in such a serious and prolonged bear market it is normal for costs to be adjusted, but for me, the fact that Circle publishes that audit now raises my doubts. Of all the stablecoins on the market, I think the least questioned is USDC, and the fact of making this audit public when no one, in particular, accused them of insolvency seems to be an attempt to distance itself from possible news of bankruptcy or suspension of payments in Coinbase. Yes, I know I'm a bore, but I have no choice, so I repeat, DYOR. Then don't come telling me about your sorrows because it's YOUR money and YOUR decisions, I'm not advising you at all.
Coinbase's market volume shows no signs of deterioration and the rumors may never be confirmed, this is why I'm telling you I haven't found any definite proof that it's going downhill. Now let's put into context what it would mean if this happens.
Assuming that this happens (it is an assumption) we are presented with the worst of all possible scenarios. We are not talking about 3AC or Celsius, we are talking about the second exchange by market capitalization after Binance (which is a monster). We are talking about the first exchange to go public, and we are talking about the American warrior. For this to happen would be an unmitigated disaster for many other players in the community.
That is why I think that if there is anyone who knows what is going on apart from Coinbase, that person is Sam Bankman-Fried, that man who is behind everything in the crypto world. He's behind a BlockFi buyout attempt, another RobinHood buyout attempt, the Celsius rescue attempt, and if Coinbase freezes withdrawals I'm sure he's going to get his dirty paws in there too.
On the other hand, there would be eternal doubt about a rescue. Binance and the United States are not friendly, and also being this a disaster that would affect everyone, it is likely that all the necessary resources will be launched for the rescue (whether private companies or other community actors).
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