Good morning and welcome to the stock market today! Today appears to be a big day in the cryptocurrency world, even after Senate lawmakers rejected a tax compromise. Perhaps one of the most interesting tidbits involves a hacker stealing $611 million, getting caught, and then sheepishly returning it in a series of payments. But beyond analyzing the heist gone wrong, what will the stock market do today?
- The S&P 500 is up 0.15%
- The Dow Jones Industrial Average is up 0.54%
- The Nasdaq Composite is down 0.3%
So what else will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Watch Cardano.
Today looks to be Cardano’s (CCC:ADA-USD) turn in the spotlight, as the cryptocurrency rockets nearly 20% higher. It seems the catalyst is renewed speculation over upcoming upgrades.
So what do you need to know? Cardano is currently the fifth-largest cryptocurrency by market capitalization, and it has captured the interest of a large swath of investors. Its founders know that, and they have big plans for its future. These include a roadmap through 2025 that will see Cardano gain its own, fully decentralized ecosystem.
One phase of these upgrades has been dubbed Alonzo Purple. This is the third phase of the Alonzo upgrades, which previously included Alonzo Blue and Alonzo White. And most importantly, Alonzo Purple will truly enable decentralized finance on the Cardano blockchain via the launch of smart contracts.
As Lachlan Keller wrote for Forkast, Alonzo Purple has some serious implications. Crypto experts anticipate that it will allow Ethereum ERC-20 tokens to run on its blockchain. And beyond that, with the launch of smart contracts, Cardano could take market share from Ethereum (CCC:ETH-USD) in the non-fungible token world.
Brief Update https://t.co/mDR4U0BFBW
— Charles Hoskinson (@IOHK_Charles) August 10, 2021
Investors are clearly excited about the upcoming upgrades, and they have reason to believe they are just around the corner. Founder Charles Hoskinson announced that his team will share their timeline on Friday, Aug. 13, and that they are excited to push ahead with the smart contracts launch. This has seen the price of Cardano soar — and brought a new wave of bullish investors on board.
Coinbase Is in Some Hot Water
Not all crypto news this morning is good news.
Coinbase (NASDAQ:COIN) largely wowed investors with its quarterly earnings report, showing that trading volumes and profits surged. However, the company also had to significantly roll back its marketing promises around stablecoin USD Coin (CCC:USDC-USD).
For those unfamiliar, USD Coin is a stablecoin that is pegged to the U.S. dollar and managed by Centre. This consortium includes Coinbase, among other prominent cryptocurrency groups. Coinbase then has a unique relationship with USD Coin, and has offered rewards to USDC holder on its platform.
Now, according to the latest disclosures, USD Coin was running on some false promises. The marketing around the stablecoin said that each token was backed by $1 in a “bank account.” This made it more appealing than controversy-plagued Tether (CCC:USDT-USD) and addressed investor concerns around stablecoins. But those “bank accounts” appear to actually consist of commercial paper, corporate bonds and other less-liquid assets in addition to cash reserves.
According to Bloomberg, beyond the marketing issues, this also raises concerns for if consumers ever try to redeem USDC en masse.
So what comes next? Coinbase has updated the language around USD Coin to say it was “backed by fully reserved assets.” While this language change has certainly prompted investor attention, it also comes at a bad time in the regulatory landscape. Big names like Gary Gensler and Elizabeth Warren want to crack down in the name of protecting individual investors, and any concern over stablecoins seems like a welcome opportunity for more regulations.
What Else We’re Watching
- Joby Aviation (NYSE:JOBY) is hitting the New York Stock Exchange for the first time today after closing its SPAC merger. Importantly, this milestone makes Joby the first U.S.-based electric vertical takeoff and landing (eVTOL) company to trade publicly. Investors should also note that Joby brings with it some star backers. In its plan to electrify the skies, Joby has attracted support from Uber (NYSE:UBER).
- Senate Democrats passed their $3.5 trillion budget resolution in the wee hours of the morning. This plan includes funding for so-called “soft” infrastructure like childcare and education. However, this resolution has a long road ahead, as Alayna Treene wrote for Axios. The next steps include a potentially lengthy negotiation process to come up with the next draft.
- Rivian, hot on the heels of Lucid Motors (NASDAQ:LCID), is in talks to invest $5 billion for an electric vehicle plant in Fort Worth, Texas. Investors should note the Amazon (NASDAQ:AMZN)-backed startup recently delayed production plans due to supply-chain concerns.
- Bill Ackman (sort of) got his way. Reuters reported that the billionaire dealmaker acquired a 7.1% stake in Universal Music Group for $2.8 billion. He has also vowed to buy more, after his blank-check company Pershing Square Tontine Holdings (NYSE:PSTH) lost out on plans to buy a 10% stake.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.