The price of bitcoin rose sharply in 2017. Coinbase, one of the largest cryptocurrency exchanges in the world, is in the right place at the right time to take advantage of rising interest rates. However, Coinbase is not interested in offering free crypto victories. To move forward in a much larger cryptocurrency market, the company is plowing money back into their master plan. As of 2017, the company’s revenue is reported to be $ 1 billion and more than $ 150 billion of assets have been sold by 20 million customers.
Coinbase, a San Francisco-based company, recognized as the leading cryptocurrency trading platform in the United States and with continued success, has reached No. .
On their way to success, Coinbase has no power left to hire chief executives from the New York Stock Exchange, Twitter, Facebook, and LinkedIn. This year, the size of his full-time engineering team almost doubled.
Earn.com was bought by Coinbase in April for $ 100 million. This platform allows users to send and receive digital currency while responding to mass market emails and completing micro tasks. Today, the company plans to bring in a former Andreessen Horowitz venture capitalist, founder and CEO of Earns as it will be the first chief technology officer.
According to current estimates, Coinbase valued its own $ 8 billion when it went to buy Earn.Com. This amount is higher than the $ 1.6 billion estimate estimated in the last phase of venture capital investment in the summer of 2017.
Coinbase declined to comment on its purchase despite the fact that it has more than $ 225 million in funding from leading VCs including Union Square Ventures, Andreessen Horowitz and also from the New York Stock Exchange.
To meet the needs of institutional investors, the New York Stock Exchange plans to start its own cryptocurrency exchange. Nasdaq, a rival on the NYSE is also considering a similar move.
• Competition is coming
Just like looking at competing organizations to get out of Coinbase business, Coinbase is looking at other capital opportunities to find an attempt to build a hole around the company.
Dan Dolev, a Nomura instant analyst, said Square, a company run by Twitter CEO Jack Dorsey could eat the Coinbase exchange business because it started trading cryptocurrency with the Square Cash app in January.
According to Dolev estimates, Coinbase’s average sales fee was about 1.8 percent in 2017. This high fee could bring users to other cheaper exchanges.
Coinbase looks to be a stop shop for institutional investors while closing the exchange business. To entice that white glove investor class, the company announces a host of new products. This type of investor is especially wary of melting into the volatile cryptocurrency market.
Coinbase Prime, Coinbase Institutional Coverage Group, Coinbase Custody and Coinbase Markets are the products launched by the company.
Coinbase feels that the institution has billions of dollars in cash that can be invested in digital currency. Customer’s assets are already in the custody of $ 9 billion.
Institutional investors are concerned about security even though they know that Coinbase has never suffered a hack like other cryptocurrency exchanges in the world. The head of Coinbase and COO said the motivation for launching Coinbase custody in November was the lack of a trustee to protect their crypto assets.
• Now move Wall Street from Bashing Bit to Cryptocurrency Backer
Based on the latest data available from Autonomous Next Wall Street’s, interest in cryptocurrency seems to be growing. Currently, there are 287 crypto hedge funds, while in 2016, only 20 cryptocurrency hedge funds exist. Goldman Sachs even opened a cryptocurrency desk.
Coinbase also introduced Coinbase Ventures, which is an incubator fund for early-stage startups working in the cryptocurrency and blockchain space. Coinbase Ventures has raised $ 15 billion for additional investment. Its initial investment was announced in a startup called Compound which allowed one to borrow or lend cryptocurrency while earning an interest rate.
In early 2018, the company launched Coinbase Commerce, which allows traders to accept major cryptocurrencies for payment. Another bitcoin startup is BitPlay, which recently acquired a $ 40 million cash venture. Last year BitPlay processed more than $ 1 billion in bitcoin payments.
Proponents of blockchain technology believe that in the future, cryptocurrency could eliminate the need for central bank authorities. In the process, it will lower the cost and create a decentralized financial solution.
• Management Security remains severe
To maintain limited access to the four cryptocurrencies, Coinbase has received a lot of criticism. However they need to be stepped on cautiously as US regulators intend how to police some use of the technology.
For cryptocurrency exchanges like Coinbase, the concern is whether cryptocurrencies are not securities that could be subject to the jurisdiction of the Securities and Exchange Commission. Coinbase is really slow to add new coins as the SEC announced in March that it will apply security laws to all cryptocurrency exchanges.
The Wall Street Journal reported that Coinbase met with SEC officials to register itself as a licensed brokerage and electronic trading site. In such a situation, it would be easy for Coinbase to support multiple coins and also comply with security regulations.