The price of bitcoin has risen sharply in 2017. Coinbase, one of the world’s largest cryptocurrency exchanges, is in the right place at the right time to take advantage of rising interest rates. However, Coinbase is not interested in taking its profits from cryptocurrency for granted. To stay ahead of a much larger cryptocurrency market, the company reinvests money in its master plan. Until 2017, the company’s revenue was $1 billion, and assets worth more than $150 billion were sold to 20 million customers.
Coinbase, a San Francisco-based company known as the leading cryptocurrency trading platform in the United States, ranked 10th on the CNBC Disruptor list in 2018 with continued success after being removed from the list in the last few years. . .
On the way to success, Coinbase spared no effort to lure key executives of the New York Stock Exchange, Twitter, Facebook and LinkedIn. This year, the staff of engineers has almost doubled.
Earn was bought by Coinbase in April for $100 million. This platform allows users to send and receive digital currency by responding to mass-market emails and micro-tasks. The company is currently considering hiring former venture capitalist Andreessen Horowitz, earns founder and CEO, as its first CTO.
According to current estimates, Coinbase was valued at about $8 billion when it intended to buy Earn.Com. That’s 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 valuation despite funding of more than $225 million from major venture capitalists 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 rival to the NYSE, is also considering a similar move.
The competition is approaching
While competing organizations are trying to take advantage of the Coinbase business, Coinbase is looking for other venture capital opportunities to drive a wedge into the business.
Dan Dolev, an instant analyst at Nomura, said square, a company run by Twitter CEO Jack Dorsey, could destroy Coinbase’s stock business as it starts trading cryptocurrency in its Square Cash app in January.
Dolev estimates that the average trading costs of Coinbase in 2017 were about 1.8%. These high costs can lead users to other cheaper exchanges.
Coinbase wants to become a universal hub for institutional investors, covering its trading activities. To attract this class of investors who prefer white gloves, the company announced the release of a number of new products. This class of investors was especially careful to delve into the volatile cryptocurrency market.
Coinbase Prime, Coinbase Institutional Coverage Group, Coinbase Custody and Coinbase Markets are products launched by the company.
Coinbase believes that billions of dollars of institutional money can be invested in digital currency. He already has $9 billion in client assets.
Institutional investors are concerned about security, knowing that Coinbase has never been hacked like some other global cryptocurrency exchanges. Coinbase’s president and chief operating officer said the impetus for the launch of coinbase last November was the lack of a reliable custodian to protect their crypto assets.
Currently, Wall Street is moving from Bashing Bit to cryptocurrency sponsor.
According to the latest data of Autonomous Next Wall Street, interest in cryptocurrency is growing. There are currently 287 crypto-hedge funds, while in 2016 there were only 20 cryptocurrency hedge funds. Goldman Sachs even opened a cryptocurrency trading point.
Coinbase has also launched Coinbase Ventures, an incubator fund for start-ups working in the field of cryptocurrencies and blockchains. Coinbase Ventures has already raised $15 billion for additional investments. The first investment was announced in a startup called Compound, which allows you to borrow or borrow cryptocurrency, receiving an interest rate.
In early 2018, the company launched Coinbase Commerce, which allows sellers to accept major cryptocurrencies. BitPlay is another bitcoin startup that recently raised $40 million in venture capital. Last year, BitPlay processed more than $1 billion in bitcoin payments.
Proponents of blockchain technology believe that cryptocurrency will be able to eliminate the need for central bank bodies in the future. In the process, this will reduce costs and create a decentralized financial solution.
Regulatory security remains high
Coinbase has received a lot of criticism for restricting access to four cryptocurrencies. But they must proceed cautiously as U.S. regulators consider how to control certain applications of the technology.
For cryptocurrency exchanges such as Coinbase, the question is whether cryptocurrencies are securities that fall under the purview of the Securities and Exchange Commission. Coinbase admittedly slowly added new coins, and in March the SEC announced that it would apply security laws to all cryptocurrency exchanges.
The Wall Street Journal reported that Coinbase met with SEC officials to register as a licensed electronic brokerage and trading platform. In this scenario, Coinbase will make it easier to maintain more coins and comply with safety rules.