Crypto's "Netscape" Moment Meanwhile, crypto bulls are keeping their heads firmly in the sand. Last week was dubbed a historic milestone for crypto. Coinbase, one of the best-known and biggest cryptocurrency exchanges, listed its shares on the Nasdaq. Cryptocurrency bulls hailed the listing as crypto's equivalent of Netscape's IPO in August 1995. The Netscape IPO marked the moment the internet and the World Wide Web entered into popular consciousness. At the time of its IPO, investors had no idea how to value Netscape. Coinbase investors are similarly puzzled. Here's what we do know. Coinbase's market cap peaked at $112 billion on its first day of trading. That made it briefly worth more than every other major asset exchange. It surpassed CBOE Global Markets ($11 billion), Nasdaq ($26 billion), New York Stock Exchange parent company Intercontinental Exchange ($67 billion) and CME Group ($74 billion). Even bulls have a tough time swallowing these valuations. Coinbase has already pulled back 50% from its first-day highs. Like most exchanges, Coinbase makes its money on transaction fees. But price wars between stock trading platforms have already driven trading fees for stocks down to zero in some cases. If Coinbase earned the stock industry's standard fees, its $1.5 billion in revenue in the most recent quarter would have tumbled to $30 million. That's a 98% drop. Cryptos on the Defensive Yet the greatest threat to Coinbase and crypto is neither shrinking margins nor alternatives like exchange-traded funds that trade on mainstream platforms. Instead, the greatest danger is Western governments pulling a Charles II on cryptocurrencies. It's no secret that governments don't like crypto. And it's not just authoritarian regimes like China and Turkey. Just last week, Fed Chairman Jay Powell called cryptocurrencies "vehicles for speculation." That is a far more diplomatic expression for what Warren Buffett's business partner Charlie Munger called "rat poison" and "trading turds." Cryptocurrencies have also drawn the ire of prosecutors and regulators. Officially, they are concerned about money laundering and the environmental damage caused by Bitcoin mining. Unofficially, governments don't like assets they cannot regulate. Just like King Charles II and the Chinese government didn't. The threat of a regulatory clampdown is the biggest danger to cryptocurrencies. And with the Bank of England - the U.K. version of the Fed - announcing yesterday that it is exploring creating its own digital currency, the clampdown on unregulated rivals is not a matter of "if" but "when." And when it does happen, look out below. Good investing, Nicholas | 
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