The price of Bitcoin rose sharply in 2017. Coinbase, one of the world’s largest cryptocurrency exchanges, was in the right place at the right time to capitalize on the growth of interest. Even so, owning one is still beyond the reach of the average person. The company is returning money to its master plan to stay ahead of the much larger cryptocurrency market. By 2017, the company had revenue of $ 1 billion and more than $ 150 billion in assets sold to 20 million customers.
San Francisco-based Coinbase is known as the leading cryptocurrency trading platform in the United States, with its continued success ranking 10th on the CNBC Disruptor list in 2018 after failing for the past two years. .
On their way to success, Coinbase left nothing to be desired in the theft of key executives from the New York Stock Exchange, Twitter, Facebook and LinkedIn. The size of its full-time engineering team has almost doubled this year.
Earn.com was bought by Coinbase this April for $ 100 million. This platform allows users to send, receive digital currency by replying to mass market emails, and perform micro tasks. The company now plans to bring in former Andreessen Horowitz venture capitalist, Earns founder and CEO as the first technology director in its history.
According to current estimates, Coinbase estimated itself at about $ 8 billion when it was going to buy Earn.Com. This value is much higher than the $ 1.6 billion estimate estimated in the last phase of venture capital financing in the summer of 2017.
Coinbase declined to comment on its assessment, despite the fact that it has more than $ 225 million in funding from top VCs, including Union Square Ventures, Andreessen Horowitz and the New York Stock Exchange.
The New York Stock Exchange plans to open its own cryptocurrency exchange to meet the needs of institutional investors. NYSE rival Nasdaq is considering a similar move.
• The competition is approaching
As competitors seek to cut a bit from Coinbase’s business, Coinbase is looking for other venture capital opportunities by trying to build a trench around the company.
Nomura instant analyst Dan Dole says Square, led by Twitter CEO Jack Dorsey, could join Coinbase’s stock exchange business as it began trading cryptocurrencies in January with its Square Cash app.
According to Dole estimates, Coinbase’s average trading payments in 2017 were approximately 1.8%. These high fees can push users to other cheaper exchanges.
Coinbase aspires to become a single window for institutional investors while hedging its exchange business. To attract the investor class of these white gloves, the company announced a new product fleet. This class of investors was especially wary of diving into the volatile cryptocurrency market.
Coinbase Prime, The Coinbase Institutional Coverage Group, Coinbase Custody և Coinbase Markets are the products released by the company.
Coinbase believes that there are billions of dollars of institutional money that can be invested in digital currency. It already has $ 9 billion in customer custody assets.
Institutional investors are concerned about security, even though they know that Coinbase has never been hacked like some other global cryptocurrency exchanges. Coinbase chairman OO COO said that the impetus for the launch of Coinbase custody last November was the lack of a trusted custodian to protect their crypto assets.
• Wall Street is currently moving from Bashing Bit to Cryptocurrency Backer
According to the latest data available from Autonomous Next Wall Street’s, interest in cryptocurrency seems to be growing. There are currently 287 cryptocurrency hedge funds, while in 2016 there were only 20 cryptocurrency hedge funds. Goldman Sachs has even opened a cryptocurrency trading table.
Coinbase has also introduced Coinbase Ventures, an incubator fund for early-stage cryptocurrency blockchain startups. Coinbase Ventures has already accumulated $ 15 billion for further investments. His first investment was announced in a startup called Compound, which allows you to borrow or lend in cryptocurrency while earning interest rates.
In early 2018, the company launched Coinbase Commerce, which allows traders to accept major cryptocurrencies for payment. Another bitcoin startup was BitPlay, which recently raised $ 40 million in ventures. BitPlay processed more than $ 1 billion in bitcoin payments last year.
Proponents of blockchain technology believe that in the future the cryptocurrency will be able to eliminate the need for central banking. In the process, it will reduce costs and create a decentralized financial solution.
• Regulatory security remains intensive
Coinbase has been widely criticized for restricting access to four cryptocurrencies. But they must be careful as US regulators discuss how to control certain uses of the technology.
For cryptocurrency exchanges like Coinbase, the concern is whether cryptocurrencies are securities that fall under the jurisdiction of the Securities and Exchange Commission. Coinbase is certainly slow to add new coins, as the SEC announced in March that it would enforce security rules on all cryptocurrency exchanges.
The Wall Street Journal reports that Coinbase met with SEC officials to register as a licensed brokerage and e-commerce site. In such a scenario, it would be easier for Coinbase to support more coins while also complying with security rules.