What happened 

The crypto rally continues to have legs and it helps that investors are pouring back into risk assets again. It certainly helps that the Nasdaq Composite is up 1.9% in early afternoon trading, but crypto is up significantly more than that. 

As of noon ET, Bitcoin (BTC -0.03%) is up 6.1% in the last 24 hours and Ethereum (ETH -0.73%) is up 5.1%. Coinbase (COIN -3.24%) jumped as much as 16.3% and is currently up 15.1% in trading. 

So what 

The most significant news today is about Coinbase, which put out a blog post that said the company doesn't have any financial exposure to bankrupt crypto firms Celsius, Three Arrows Capital, and Voyager. Management also said that it had no losses from its financing book, no exposure to client or counterparty insolvencies, no loan recalls or withdrawals, and no changes to access to credit. 

What's been exposed in recent weeks is the incredible amount of risk taken on by lenders, who were in turn promising yield to clients. As an exchange, Coinbase's business isn't built on lending, but the company does have some lending products for institutions. The blog post went to great lengths to point out that "standard practice is to require 100%+ in collateral," which means positions could be liquidated to reduce, or eliminate, financial losses for Coinbase. 

Another positive for the crypto market overall is that the bankruptcies I highlighted may not spill over to the broader market. If Coinbase isn't impacted, then other exchanges and major companies may not be either. And companies that are profitable, or at least have a strong cash position, may be able to acquire some beaten-up companies in this down market. 

Now what 

There's a broad "risk on" trade taking place in financial markets and that's helping pull Bitcoin and Ethereum higher, but the Coinbase news is more meaningful. A lot of the downward pressure in cryptocurrencies was driven by investors not knowing where the bottom is for cryptocurrencies amid billions of dollars of liquidations. For now, we seem to be seeing a bottom. 

I also think it's telling that the unwinding of many of these businesses and large positions has been relatively orderly. In the past, risks across banks have led to a cascade of failures, but companies that used collateral of 100% or more, like Coinbase, have fared well and have simply been able to liquidate positions if needed. 

I don't know if this is the bottom for crypto markets, but if there aren't any major risks unearthed in the next few months we could be in for another bull run. Developers keep building, more users keep coming into the industry, and use cases keep improving. I'm bullish on crypto long term and companies like Coinbase are a big reason why.