Coinbase Opens Waitlist for Ethereum 2.0 Staking

Coinbase Opens Waitlist for Ethereum 2.0 Staking

TipRanks

Today, we’re looking at two small-cap biotech firms whose stocks have struck a rut. Each company has hit a recent clinical setback that sent the share price falling, erasing previous gains and sending it back down to low levels. Setbacks of this sort are not uncommon in the biotech industry, and in fact highlight the risk and speculative nature of the industry. So what should investors do, when a stock collapses? Is this a matter of poor fundamentals? And has the stock’s price found its low point yet? That’s where the Wall Street pros come in. Noting that each is set to take back off on an upward trajectory, some 5-star analysts see an attractive entry point for both. Using TipRanks’ database, we found out that these two tickers have earned Moderate or Strong Buy consensus ratings from the analyst community, and boast strong upside potential. Cortexyme, Inc. (CRTX) The first beaten-down name we’re looking at is Cortexyme, a clinical-stage biopharma company focused on degenerative diseases, especially Alzheimer’s. The company’s lead candidate is COR388, also called atuzaginstat. Atuzaginstat is currently under investigation in the GAIN trial, a study of its efficacy against Alzheimer’s disease. The trial is fully enrolled, with 643 patients, and the company was moving toward an open label enrollment (OLE) section of the Phase 2/3 study. During a routine regulatory update, Cortexyme announced that the OLE phase would be halted, although the primary GAIN study will continue, with results due to be released in Q4 2021. The announcement of the partial halt triggered a 35% drop in share price. The partial hold was prompted by adverse events on the liver during the atuzaginstat trial. The hepatic symptoms were reversible and showed no long-term lasting effects. The FDA reviewed these records, and in collaboration with Cortexyme the decision was made to hold the OLE while continuing with GAIN. This decision allows the main thrust of the program to continue, while working out a new protocol for the OLE. The purpose of the OLE is to test long-term efficacy and tolerability of the drug. In a review of Cortexyme after the announcement, HC Wainwright’s 5-star analyst Andrew Fein noted, “Cortexyme’s announcement of a partial clinical hold on the OLE study of atuzaginstat is disappointing, but the reversible nature of the liver toxicity might provide some ray of hope for Cortexyme. We believe that the pivotal trial’s continuation suggests that the drug-induced liver injury might not be severe enough to halt the program.” Turning to the near-term, Fein adds, “Continuation of the GAIN trial is encouraging despite the partial hold on OLE. It suggests that FDA plans to wait for the additional data from the pivotal trial before coming to any conclusion. Management shared that nearly one-third of the GAIN patients have completed the study and way past the 12-week time point, suggesting that they are out of risk.” To this end, Fein rates CRTX a Buy, and his $76 price target indicates confidence in a 147% growth potential. (To watch Fein’s track record, click here) Overall, Cortexyme has a Moderate Buy rating from the analyst consensus, with 6 recent reviews breaking down 4 to 1 to 1, Buy-Hold-Sell. The stock’s $83.60 average price target suggests that Wall Street sees a high potential here, on the order of ~170% upside from the trading price of $30.74. (See CRTX stock analysis on TipRanks) Immunovant (IMVT) Next up is Immunovant, a clinical stage biopharmaceutical research firm, focused on developing treatments for patients with autoimmune disorders, a class of diseases in which the immune system attacks the patient’s own body. The firm’s lead drug candidate, IMVT-1401, is undergoing trials as a treatment for thyroid eye disease, myasthenia gravis, and warm autoimmune hemolytic anemia. The drug described as “a novel, fully human anti-FcRn monoclonal antibody,” delivered by subcutaneous injection. On February 2, Immunovant’s stock plunged 42%, and it has been falling ever since. The precipitating factor was an announcement by the company that IMVT-1401 has had its Phase 2b clinical trial, for thyroid eye disease, halted temporarily, due to patients experiencing dangerous rises in their LDL levels. LDLs are the potentially harmful form of cholesterol, which have been connected to cardiovascular disease. Despite the clinical setback, Stiffel’s 5-star analyst Derek Archila reiterated a Buy rating on IMVT shares, along with a $28 price target. This figure suggests a 52% upside potential from current levels. (To watch Archila’s track record, click here) “Interestingly, increases have only been seen in TED patients, and our review of the literature suggests a few things: (1) it’s likely this is TED specific given the biology- see below for details, but we don’t think similar LDL increases will be seen in other indications outside TED; and (2) other anti-thyroid therapies used in Graves/TED also see similar increases in LDL, which end up being transient. We think IMVT-1401, in away, is replicating this mechanism," the analyst noted. Archila summed up, “While we will need to see additional data from the company to confirm… we don’t think this program is dead.” Overall, the Strong Buy analyst consensus view on IMVT would suggest that Wall Street generally agrees with Archila’s assessment. This rating is derived from 8 recent reviews, which include 7 Buys and only a single Hold. The average price target here stands at $40.38, implying ~121% upside for the next 12 months. (See IMVT stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Coinbase will soon allow users to earn interest on Ethereum

Cryptocurrency exchange Coinbase has launched a waiting list for users that would like to earn interest on Ether (ETH) held in their account wallet .

As per a recent blog post , the firm will soon introduce a staking facility that will allow customers to set aside a portion of their holdings to be funnelled into the new-look Ethereum network , where it will be used to keep the system well-oiled and secure.

The exchange claims participants could earn interest of up to 7.5% on the amount staked, but will be unable to sell or transact using the allotted Ether for the moment. However, there will be no staking minimum, so users can pledge as little or as much as they like.

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The upcoming Ethereum 2.0 staking service will build upon similar facilities introduced in 2019 that allow Coinbase users to earn rewards on their Tezos and Cosmos holdings.

Ethereum 2.0 staking with Coinbase

For anyone new to the world of cryptocurrency, it might be a little puzzling that Coinbase is choosing to offer staking services for Ether but not Bitcoin, the world’s largest cryptocurrency. The reason lies in the fundamental differences in the way the two underlying blockchain systems operate.

The Ethereum network recently began a transition that will overhaul its consensus mechanism, which is designed to incentivize network maintenance and ensure data cannot be tampered with.

With Ethereum 2.0, the network will switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus, which is generally considered to be a more effective and energy-efficient means of maintaining the network.

A basic way to describe the difference is that, in a PoW system (used for Bitcoin), one unit of computational power equates to one unit of mining power. Under PoS, however, one unit of staked value secures one unit of mining power.

According to data from Dune Analytics , more than three million ETH (worth circa $5.4 billion at current market rates) has been committed to the Ethereum 2.0 deposit contract to date.

Typically, Ethereum 2.0 stakers are required to pledge a minimum of 32 ETH (almost $60,000), pricing many people out of contention. But Coinbase will allow its customers to contribute as little ETH as they like, in exchange for 25% commission on any rewards earned.

The main caveat is that if the price of Ether were to fall, users will not be able to limit their losses by selling their holdings. For many individual investors, then, Ethereum 2.0 staking is effectively a long-term bet on the future of the project and an increase in value of the underlying currency.

Staking via Coinbase also means that holders of Ether will not be able to transfer their funds to a non-custodial wallet, over which they have full control, as opposed to the custodial wallet provided by the exchange itself.

Can Ethereum escape its scaling issues to break through US$2000?

To help ease out Ethereum’s scaling problems, the platform’s proponents have been actively testing out sharding and layer 2 solutions such as Skale and Optimistic Network.

Ether has been range-bound between US$1700-$1900 for the past week despite other high market cap coins setting new all-time-highs.

Despite mounting gas fee concerns, the volume of Ether held across various exchanges has continued to dip at a rapid rate.

Over the course of February, the cost of facilitating a transaction on the Ethereum network has been hovering above the US$16 mark.

On Feb. 15, Ether plunged to a price point of US$1,660, before forging a swift recovery, exhibiting gains of 9% over the next 12 hours. However, since then, the currency has not been able to cement its position above the US$1,800 threshold, constantly fluctuating a little over/under the aforementioned price range. At press time, the second-largest cryptocurrency by total market capitalization is sitting at US$1,770.

Even though initially many had been speculating that the launch of CME’s ETH futures could cause the digital asset to dip or maybe stagnate, following the announcement, Ether’s value actually proceeded to rise. However, it now appears as though rising gas fees and low transaction throughput rates may be starting to undermine investor confidence, leading to the currency plateauing around the US$1,800 range.

To put things into perspective, ETH transaction fees have been on the rise for quite some time now, with prices hovering around the US$8-$10 mark at the beginning of the year. And while even then these rates were considered relatively high, since the start of February, matters seem to have gotten worse, with the cost of a transaction on the Ether blockchain now at US$21.04 — a hefty sum that not everyone seems to be willing to pay.

How to buy Ethereum

Ethereum Average Transaction Fee (source: Ycharts)

In response, a number of Ether devs and platform proponents have been implementing sharding and layer-two solutions to help curtain this issue as much as possible. Some options that are actively being tested out include Skale and Optimistic Network. Lastly, it also bears mentioning that Eth2 will also make use of the above-stated sharding concept, so as to help increase the number of transactions that can be processed by the Ethereum network at once.

Fundamentals still exhibit immense strength

Despite all of the problems being faced by Ether, the cryptocurrency continues to showcase amazing growth, with the total value locked (TVL) across the DeFi ecosystem currently hovering just below the US$40 billion mark. To further expand on this, one can see that at the start of February, this value lay at just US$27.95 billion, thus representing a total gain of around 30% within the last 17 days alone. On the subject of Ether’s future monetary outlook, Ben Zhou, CEO of cryptocurrency exchange Bybit, told Finder:

“Interest from institutional investors, DeFi development demand, and steady swelling of staking on Eth2 combined have pushed Ether to new highs and we are seeing little sign of this upward trend abating.”

Similarly, Michael Anderson, co-founder of Framework Ventures, a thesis-driven crypto venture firm, believes that despite its existing issues, people need to realize that Ethereum is the next wave of computational technology that should be valued on a basis similar to that of ‘cloud tech’ — since it serves as the 4th generation of a computational evolution that started with mainframes back in the 1940s. He added:

“Decentralized Finance (DeFi), which largely runs on Ethereum, is a major part of this evolution and will continue to play an even bigger role in bringing Ethereum and blockchain to the world of traditional finance. Ethereum is now becoming a mainstream asset and contrary to what many may believe, the launch of CME Futures for ETH has actually been a driver in Ethereum’s price rise.”

Anderson also pointed out that the new technical changes that are lined up for Ether will update the value proposition of the asset in a big way — such that, instead of being inflationary, the digital currency will become deflationary. This, in his opinion, will also help spur Ethereum’s rise, with the currency most likely hitting US$10,000 by the end of the year.

Lastly, on the subject, Sidharth Sogani, founder and CEO at CREBACO, a credit rating provider for exchanges, blockchains, and coin offerings, told Finder that even if we face further corrections in the near future, Ether has stabilized to a point wherein a drop below the US$1,500 range is highly unlikely. “What scares me is the way the alt markets are moving. This is purely speculative and can result in sudden crashes”, he added

Sogani highlighted that there are a few whales that are actively pumping and dumping a whole lot of alts these days, something that people have to be increasingly cautious about if they want to be smart with their money. That being said, he believes the Ethereum market has now grown to a point where it has become too big for any number of whales to manipulate.

Exchange withdrawals continue to happen at a furious pace

As Finder had pointed out earlier, the amount of Ether being held across centralized exchanges has been dropping at a furious pace for a few months running now. For example, we can see that between Jan. 1 to Feb. 15, an estimated total of 600,000 ETH was withdrawn from all centralized exchanges. As can be seen from the chart below, the outflow of ETH has been remarkable, with the trend quite likely to continue in the near future.

ETH Reserves Across Exchanges vs ETHs Price Increase (source: CryptoQuant)

What this seems to suggest is that these coins are either being transferred to cold wallets or being pumped into the DeFi ecosystem but it is highly unlikely that this crypto will be sold in the near term.

Not only that, it also sheds light on the fact that more and more people are becoming vary of the fact that they gain no real benefit by storing their digital assets on exchange wallets and that they can participate in various passive income schemes (i.e. staking, lending, etc) by simply taking charge of their holdings.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.