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Health, Wealth, and Happiness

May 31, 2024

"Don't count the days, make the days count."

- Muhammad Ali

Howdy, investors!

Crypto financial statements are the long-term investor's secret weapon. In today's updated guide, you'll find our latest thinking on how to make the most of tools like Token Terminal.

Mastercard has rolled out an easier way to send bitcoin. The new service makes it possible to send crypto with just a username, which is a huge improvement over managing wallets and exchanges.

Thanks to platforms like EigenLayer, restaking is on the rise. If you've been following our approach to restaking (two words: avoid it), here's the latest on who's not.

Coinbase, in a new court filing, slams the SEC for putting crypto companies in a Catch-22: chasing rules and regulations that haven't been fully written. They're suing the SEC, and coming out swinging.

Read on!

How to Read Crypto Financial Statements

by John Hargrave

Crypto financial statements are the investor’s secret weapon.

Most people don’t even know these financial statements exist. Sure, public companies are required to disclose their financials, but crypto?

True, crypto financial statements are still new and evolving. Various companies offer these statements, but our favorite is Token Terminal, which we’ll use for this guide.

For a quick snapshot, the three most important metrics to evaluate a crypto investment are Active Users, Fees, and Price/Market Cap. Here's why these metrics matter, where to find them in the financials, and whan investing superpower.

Click to unlock your financial statement superpower >>

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Must Read

Today's most important stories for crypto investors.

Mastercard's "Crypto Credential" Simplifies Sending Bitcoin(Decrypt)

Mastercard has launched a new service, "Crypto Credential," to simplify and secure peer-to-peer crypto payments in several European and Latin American countries. Imagine one simple username to send and receive bitcoin and other cryptos.

Mastercard claims it can even prevent some losses, by notifying users if the receiving wallet does not support the asset or blockchain, thereby halting the transaction.

This a huge user experience improvement that could bring millions more people on-chain, and Mastercard could be the direct beneficiary as it collects a fee on each transaction. Time to take a fresh look at $MA stock.

Crypto Restaking Platforms Boom as Traders Chase Bigger Returns (Yahoo! Finance)

As more than $18 billion moves into restaking platforms, experts are noticing both the bullish implications for the crypto market and the potential for added risk in crypto investment.

This article focuses on EigenLayer and its massive uptick in investments in 2024, by investors who don't mind some risk. If you're interested in learning more about our take on EigenLayer and restaking, read our guide. (One word: avoid.)

Coinbase Accuses SEC of Trying to Destroy the Crypto Industry (The Block)

Coinbase comes out swinging in the Court of Appeals for the Third Circuit, claiming that the SEC has put the industry in a Catch-22 where the regulatory body demands crypto companies comply with rules yet to be written.

The filing asks that the SEC write new rules for crypto investments so that businesses can follow them, echoing our calls for regulatory clarity. On behalf of investors: thank you, Coinbase!

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Chart of the Day

BTC Daily Active Users versus Transactions

Something interesting is happening with bitcoin.

Daily active user counts have been falling since the start of 2024, which would typically be concerning. However, at the same time, we've seen bitcoin's price heading considerably higher while transaction counts are at record levels.

Why might this be happening?

Daily user counts could be dropping as crypto traders focus more on the more volatile altcoins (i.e., looking for quick profits).
DAU could also suffer due to the elevated bitcoin price: retail users might be waiting for the dip.
At the same time, the total number of transactions is increasing, thanks to the approval of spot bitcoin ETFs.
All the new transaction volume comes from institutional traders, who are more likely to engage in algorithmic trades that generate many quick transactions looking for fast profits.

Whether or not our theories are correct, the drop in DAUs certainly hasn't hurt the BTC price. At the same time, the increased transaction counts are likely helping bitcoin generate more fees and revenues despite the lower number of users.

ICYMI