GM to all of you nutcases. It’s Crypto Nutshell #1002 bringin‘ the news… 🥜

We're the crypto newsletter that's more patient than a swordsman who spent twenty years rehearsing one introduction for a six-fingered man… 🗡️🧔

What we’ve cooked up for you today…

What’s in the Crypto Nutshell Portfolio?

BREAKING: Robinhood's crypto revenue fell 55% from last year, but topped Street forecasts

Robinhood made $173 million from prediction markets in the third quarter, and $120 million from crypto.

It's the second quarter in a row those bets (yes-or-no contracts that pay $1 if a game, an election or a data release goes a certain way) have out-earned crypto on the app.

A year ago crypto brought in about $268 million, so it's down 55%, and its share of Robinhood's revenue has fallen from roughly 21% to 8.4%.

Nearly everything else its customers trade grew, with options revenue up 31% to $399 million and stock trading revenue up 41%.

They traded a record 16.4 billion event contracts, more than seven times as many as a year earlier.

Crypto trading in the Robinhood app itself fell 48% to $21 billion.

If you're waiting for retail buyers to return and push Bitcoin higher, Robinhood's numbers suggest a lot of them are betting on games instead…

A bet on a game pays out in a few hours, while Bitcoin's sitting about 36% below its record, so anyone after a quick result has found a faster way to get one.

Crypto did pick up from the second quarter, with trading volume up 23% and revenue up 20% from $100 million.

But Robinhood Chain, the company's own blockchain, brought in $26 million of the $120 million in its opening quarter, and trading revenue on its own slipped 6% to $94 million.

Bernstein expects a comeback anyway, forecasting $1.6 billion a year from crypto for Robinhood by 2028, just behind $1.7 billion from prediction markets.

Robinhood's customers still have plenty of appetite for risk, but right now more of it's going on game results than on Bitcoin. 🚀

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Michael Saylor has a one-line answer for anyone who says Bitcoin can't be scarce because anyone can make a new coin.

Saylor is the Executive Chairman of Strategy, now the largest institutional holder of Bitcoin on earth.

Here's what he posted:

The argument he's swatting is that Bitcoin's code is free to copy, so anyone can launch another 21 million coins tomorrow and the scarcity is an illusion.

People have certainly tried… CoinGecko now tracks more than 22,000 cryptocurrencies.

Saylor's comparison is that a language is worth learning for how many people already speak it, and money works the same way.

What gives Bitcoin its value is the network around it (the buyers, miners, exchanges, ETFs and company balance sheets already using it), and none of that comes along when someone copies the code.

Bitcoin Cash is the cleanest test, since it split off in 2017 with the same code, the same 21 million cap and the same history up to the day it forked.

Today it's worth about $5.9 billion, under half a percent of Bitcoin's $1.6 trillion.

To be fair, it's an easy line for a man whose company holds 848,517 Bitcoin, so he's hardly a neutral judge.

Still, Bitcoin makes up nearly 60% of the entire crypto market's value after all those attempts to replace it.

So when the next "Bitcoin killer" launches with better tech, the number to watch is how many people it pulls off Bitcoin's network.

After 22,000 copies, the crowd's still on Bitcoin 🗣️

Today we're looking at BTC Risk, a simple way to gauge where we are in the cycle.

BTC Risk compresses years of price action into a number between 0 and 1:

It doesn't call exact tops or bottoms. It shows you when risk-reward is tilted in your favour.

Current BTC Risk: 0.485 (two weeks ago: 0.494)

The gauge slipped 0.009 this fortnight, its first fall after two straight rises.

That hands back less than a twentieth of the 0.194 it gained on the way up from 0.300.

It now sits 0.015 below the 0.5 midpoint, against a gap of just 0.006 two weeks ago.

The climb toward the middle has stalled for now, and the gauge is still in the lower half. ⚖️

Crypto wallet maker Keystone to destroy almost 19,000 devices after security breach. Attackers stole the built-in key that lets devices pass authenticity checks, so Keystone is scrapping 18,835 unsold units.

Intel, Oracle, IBM Join Objections to OKX-ICE Tokenized Stock Venue, Bringing Total to 26. The list stood at nine on October 15, and the venue now says SIPC cover for self-custodied tokenized shares is uncertain.

CFTC sues Utah to block action against prediction markets. The regulator says federal law preempts Utah, whose attorney general wants Kalshi and its affiliates to return up to $60 million in profits.

Galaxy Digital swings to $323 million quarterly profit, announces new $200 million share buyback. Most of the gain came from higher valuations of its holdings and private investments, after an $85 million loss in the second quarter.

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Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)

Because what would the crypto world be without its share of memes?

Trivia Answer: One group controls most of a network's mining power and can rewrite recent blocks 🥳

Control of most of the hash power lets an attacker build a longer chain in private and double-spend their own coins. Bitcoin's size makes that ruinously expensive, but smaller proof-of-work chains like Ethereum Classic were hit by real ones in 2019 and 2020.

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