In 2017, the price of bitcoin soared. Coinbase, one of the world’s largest cryptocurrency exchanges, has found itself in the right place at the right time to make money on the interest jump. Despite this, Coinbase is not interested in taking its crypto-profits for granted. To stay ahead in the much larger cryptocurrency market, the company is returning money to its master plan. By 2017, the company had revenue of $ 1 billion, and assets of more than $ 150 billion were traded to 20 million customers.
Coinbase, a San Francisco-based company known as the leading cryptocurrency trading platform in the United States and with its continued success ranked 10th on the CNBC Disruptor list in 2018 after not being listed for the previous two years. .
On its way to success, Coinbase has left no stone unturned in the poaching of key executives from the New York Stock Exchange, Twitter, Facebook and LinkedIn. This year, the number of full-time engineering teams has almost doubled.
Earn.com was bought by Coinbase in April this year for $ 100 million. This platform allows users to send and receive digital currency by replying to mass market emails and performing microtasks. The company currently plans to bring in former venture capitalist Andreessen Horowitz, founder and CEO of Earns as the first-ever chief technology officer.
According to current estimates, Coinbase valued itself at about $ 8 billion when it decided to buy Earn.Com. That figure is well above the $ 1.6 billion estimate estimated in the last round of venture funding in the summer of 2017.
Coinbase declined to comment on its estimate, despite having more than $ 225 million in funding from leading venture capital firms including Union Square Ventures, Andreessen Horowitz, and the New York Stock Exchange.
To meet the needs of institutional investors, the New York Stock Exchange plans to launch its own cryptocurrency exchange. Nasdaq, a competitor to the NYSE, is also considering a similar move.
• Competition is coming
While competing organizations are seeking to snack on Coinbase’s business, Coinbase is looking for other venture capital opportunities by trying to build a moat around the company.
Dan Dolev, an analyst at Nomura, said Square, a company run by Twitter CEO Jack Dorsey, could eat up Coinbase’s exchange business because in January it started trading cryptocurrencies in its Square Cash app.
Doleva estimates Coinbase’s average trade fee was about 1.8 percent in 2017. Such high fees can push users to other cheaper exchanges.
Coinbase aims to be the only window for institutional investors when hedging its stock business. To attract white gloves to this class of investors, the company has announced a fleet of new products. This class of investors was particularly wary of plunging into the volatile cryptocurrency market.
Coinbase Prime, The Coinbase Institutional Coverage Group, Coinbase Custody and Coinbase Markets are products launched by the company.
Coinbase believes there are billions of dollars of institutional money that can be invested in digital currency. It already has $ 9 billion in customer assets.
Institutional investors are concerned about security, even though they know that Coinbase has never been hacked like some other global cryptocurrency exchanges. The president and CEO of Coinbase said the impetus for launching Coinbase Saving 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 at Autonomous Next Wall Street, 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 an office for cryptocurrency trading.
Coinbase also introduced Coinbase Ventures, which is an incubator fund for early-stage startups operating in the cryptocurrency and blockchain space. Coinbase Ventures has already amassed $ 15 billion for further investment. His first investment was announced in a startup called Compound, which allows you to borrow or give cryptocurrency while earning an interest rate.
In early 2018, the company launched Coinbase Commerce, which allows merchants to accept major cryptocurrencies for payment. Another bitcoin startup is BitPlay, which recently raised $ 40 million in venture money. Last year, BitPlay processed more than $ 1 billion in bitcoin payments.
Proponents of blockchain technology believe that in the future cryptocurrency will be able to get rid of the needs of central banking authorities. In the process, this will reduce costs and create a decentralized financial solution.
• Regulatory safety remains intensive
To maintain access to the four cryptocurrencies, Coinbase has drawn a lot of criticism. But they need to be careful while U.S. regulators discuss how to control certain uses of the technology.
For cryptocurrency exchanges such as Coinbase, the issue of concern is whether cryptocurrencies are securities that fall under the jurisdiction of the Securities and Exchange Commission. Admittedly, Coinbase is slowly adding new coins because the SEC announced in March that it would apply security laws to all cryptocurrency exchanges.
The Wall Street Journal reported that Coinbase met with SEC representatives to register as a licensed brokerage and e-commerce site. In this scenario, Coinbase will find it easier to maintain more coins as well as follow security rules.