TheBRRR’s Thoughts

GM.

Quick scoreboard check as activity on Solana continues to explode. The tweet above points out that Solana did more on-chain trading volume than Ethereum and all of Ethereum’s Layer 2 decentralized exchanges over the last 24 hours.

While not an end-all-be-all metric, it’s a clear indication that Solana has exploded this year and the main token has appreciated in-step with the activity. We added SOL to the newsletter’s portfolio less than a month ago and it’s up 69% since.

Don’t ask us about other coins we like on Solana - while charming and hilarious it’s fairly embarrassing and wears a hat.

Merry Christmas to all, and to all a good BRRR.

Macro News

The PCE Data Is In And It’s Good

WHAT HAPPENED:

• November PCE Data: The Personal Consumption Expenditures (PCE) for November, crucial for Federal Reserve's monetary policy decisions, showed better-than-expected results.

  • Headline PCE: Dropped by 0.1% month-over-month, the lowest since April 2020.

  • Year-Over-Year Headline PCE: Fell to 2.6%, lighter than the revised 2.9% from the previous month.

  • Core PCE: Rose by 0.1% month-over-month, reaching an annual rate of 3.2%, lower than the revised 3.4%.

• Personal Income & Spending: Personal income increased by 0.4%, while personal spending rose by 0.2%, slightly below the 0.3% forecast.

WHY IT MATTERS:

• Inflation Trends: The numbers suggest a continuing downward trend in inflation, contributing to a potential "soft landing" for the economy

• Market Impact: These results are a positive signal for the markets, indicated by a modest rise in equities against a declining dollar.

• Bond Market Reaction: Following the release, bond yields, particularly the 2-year and 10-year rates, fell further, reflecting the market's response to the data​​.

Investors.com

Crypto News

Coinbase Acting Like A Crypto Index Play

BRRR Brief: Coinbase's Role as a Potential Index Play in Traditional Finance

WHAT HAPPENED:

• Coinbase as an Index for Traditional Finance: Will Clemente, co-founder of Reflexivity Research, posits that traditional finance (TradFi) firms might view Coinbase (COIN) as an "index play" on the crypto sector due to its diverse verticals. This perspective aligns with the increasing inclination of traditional financial firms to gain broad exposure to cryptocurrencies​​.

• Optimistic Revenue Forecasts: Bitwise's Chief Investment Officer, Matt Hougan, expressed high expectations for Coinbase's future performance. Predicting a potential doubling of its revenue in 2024, Hougan believes even this estimate might be conservative, indicating strong confidence in Coinbase's trajectory​​.

• Diversification Beyond Exchange Services: Contrary to the common view of Coinbase solely as an exchange, the company has expanded into other revenue streams like staking, Bitcoin ETF custodianship, and partial acquisition of Circle. Additionally, Coinbase launched its Ethereum layer-2 solution, "Base," further diversifying its business model​​.

• Challenges Ahead: Despite these positive outlooks, Coinbase faces significant hurdles, including a tough lawsuit with the SEC and potential legislative actions in the U.S. that could restrict cryptocurrency activities. Additionally, its layer-2 solution "Base" has experienced security issues, highlighting operational challenges​​.

WHY IT MATTERS:

• Indicator of Crypto Market Sentiment: TradFi's view of Coinbase as an index play reflects the growing mainstream acceptance of cryptocurrencies and can significantly influence market dynamics.

• Impact of Revenue Diversification: Diversifying beyond mere exchange services could bolster Coinbase's resilience against market volatility and regulatory changes, presenting a more robust business model.

• Legal and Security Concerns: Ongoing legal challenges and security vulnerabilities could dampen investor enthusiasm, underscoring the importance of robust compliance and cybersecurity measures.

• Investor Sentiment and Strategies: The investment decisions by prominent firms like ARK Invest can signal broader market sentiments and strategies, which are crucial for understanding institutional approaches to cryptocurrency investments.

In summary, Coinbase's potential role as an index play in traditional finance underscores its importance in the crypto sector. While optimistic forecasts and diversification strategies offer promise, legal and operational challenges, alongside investor movements, provide a complex picture of its future in the rapidly evolving crypto landscape.

CoinTelegraph

Poll of the Day

The MSFT votes are piling in. Is this voting process secure?

Got feedback? Follow the writer on Twitter @frank_locascio and send a message.

The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.