It’s been an atypically quiet month so far for Coinbase.In one 30 day period from late June to late July, the pace of innovation and announcements coming from the company was absolutely torrid: integration with Quickbooks and Shopify, partnerships with Dell (the largest bitcoin-accepting merchant to date) and Wikipedia (0% fee on donation processing for all charities) and, of course, the introduction of the Coinbase Vault. Yet since then, we’ve had no new news from the company save a couple of acqui-hires and some small merchant announcements.It’s easy to chalk this slowdown to the dog days of summer. People are on vacation. New merchant announcements might be better timed for September. The team is focusing on a BitLicense response. Etc. Not to mention, it would be hard for many startups to follow up a month like July with an equal or greater performance.Unless, of course, we are just seeing the quiet before the storm.I have heard from several sources that Coinbase has been working to raise a massive new round of funding – the (unconfirmed) whisper number is as high as $100 million in fresh capital. This as the WSJ recently reported that Coinbase has been kicking the tires on a major integration with PayPal payments subsidiary Braintree. It wouldn’t surprise me if these two developments go hand in hand, and I’m inclined to believe the rumors for several reasons.1) On the funding front, Coinbase simply needs more money - USD and bitcoin. During last week’s price swings, Coinbase hit its daily buy limits for the first time in months, suggesting that it requires additional investments to improve its liquidity. And the team’s rapid expansion, marketing giveaways, large merchant integration costs, and deadweight losses from user fraud (and possible bogus fines & legal bills), should all but guarantee that the company will require a new infusion in order to maintain its current growth trajectory. Considering Coinbase’s performance - particularly on the merchant acquisition front, the level of market risk that has been eliminated in the nine months since their Series B raise (at a $140 million valuation), and a16z’s ability to drum up excitement from new investors, it wouldn’t surprise me if the company did in fact raise a nine figure sum. This becomes especially likely if…2) Coinbase is likely to complete an integration with Braintree. The benefits for both parties are obvious. Coinbase has the wins under its belt with Dell, Expedia, and Overstock to credibly pitch Braintree on a partnership, which would open the door to bitcoin acceptance at companies like Uber and Airbnb. In the process, such a deal would let PayPal play around with bitcoin, tighten its ties to the industry’s only two-sided platform, and essentially “try before it buys” to the extent the payments giant is vetting Coinbase as an acquisition target. Braintree’s excitement would seem to increase if its new partner improved its capital position by a factor of ~5x. (If there weren’t so many market risks associated with bitcoin, I think PayPal would have already started to make overtures to the Coinbase team. PayPal may have even aped Coinbase’s UI earlier this summer.)3) Of course, fundraising and large integrations take time, time, time. Which would also account for the drop-off in Coinbase announcements after a white hot start to the year.***Let’s set aside the rumors for a second, though. I’ve written about the challenges that Coinbase faces from all three of its fronts (merchant services, hosted wallets, and its API), yet the company does look well positioned to offer the first real killer consumer bitcoin application by the end of the year.Today, there aren’t really any good reasons for a US customer to use bitcoin instead of a rewards credit card. He or she would be giving up 0.5% in bid/ask spread on the listed purchase price, up to 1% (or more) to acquire the bitcoin initially, and 1% or more in opportunity costs for not using a credit card. The only reason, then, that a consumer would opt to use bitcoin for purchases would be if merchants offered compelling discounts on their products to drive that behavior change.With its two-sided market, Coinbase might be the only bitcoin company with the potential to start this type of “bitcoin rewards” program right now. They already allow users to make “recurring buys” to true up their accounts every time they spend bitcoin. And they already make it super simple for merchants to pass on bitcoin cost savings to customers via discounts. Now they may be closing in on the critical mass necessary to offer a compelling rewards program for their users. You could see them tracking “bitcoin rewards” that accrue to users who shop with their merchants.“Because you used Coinbase, you saved $25 on your hotels, $10 on your subscription TV bill, and $1 on your Alpaca socks.” That’s a much more compelling pitch for the merits of bitcoin than the long-winded, esoteric one about nationless currencies and being one’s own bank.You could conceivably see new users who open low balance accounts, connect their bank accounts as they would with a new credit card, activate the “recurring buy” function to maintain their balances after every new transaction, and then watch their bitcoin rewards accumulate.In the process, Coinbase would start chipping away at the credit card companies’ gold mine - rewards programs - and attract mainstream consumers to the bitcoin payment rails, regardless of their risk tolerance for the currency.Not too shabby.