In 2017, the price of bitcoin increased rapidly. Coinbase, one of the world’s largest cryptocurrency exchanges, was in the right place at the right time to take advantage of interest rate hikes. However, Coinbase is not interested in accepting cryptocurrency earnings as natural. The company is raising money for its master plan to stay ahead in the larger cryptocurrency market. As of 2017, the company’s revenue was reported to be $ 1 billion, and more than $ 150 billion in active trades were conducted among 20 million customers.
San Francisco-based Coinbase is recognized as the leading cryptocurrency trading platform in the United States and ranked 10th on the CNBC Disruptor list in 2018 after failing to make the list for the past two years with continued success. .
On the way to success, Coinbase New York Stock Exchange, Twitter, Facebook and LinkedIn have left no stone unturned in poaching. The number of its full-time engineers has almost doubled this year.
Earn.com was acquired by Coinbase in April this year for $ 100 million. This platform allows users to send and receive digital currency while responding to mass market emails and performing micro tasks. Currently, the company plans to bring former Andreessen Horowitz, a venture capitalist, Earns founder and CEO, to the first CEO in history.
According to current estimates, Coinbase valued itself at about $ 8 billion when it began buying Earn.Com. This value is much higher than the estimated $ 1.6 billion in the last round of venture capital financing in the summer of 2017.
Coinbase, including Union Square Ventures, Andreessen Horowitz, and the New York Stock Exchange, declined to comment on its valuation, despite having more than $ 225 million in funding from top VCs.
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 coming
As competing organizations try to pull a tooth out of Coinbase’s business, Coinbase is looking for other venture capital opportunities in an attempt to build a ditch around the company.
Nomura instant analyst Dan Dolev said Square, a company run by Twitter CEO Jack Dorsey, could take over Coinbase’s exchange business as it began trading cryptocurrencies in Square Cash in January.
Dolevin estimates that Coinbase’s average trading fees in 2017 were about 1.8 percent. Such high fees can push users to cheaper exchanges.
Coinbase wants to become a window for institutional investors when hedging their exchange business. To attract this white glove investor class, the company has announced a new product park. This class of investors was especially careful to enter the volatile cryptocurrency market.
Coinbase Prime, The Coinbase Institutional Coverage Group, Coinbase Custody and Coinbase Markets are products sold by the company.
Coinbase feels 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, like some other global cryptocurrency exchanges, has never been hacked. The president of Coinbase and the COO said that the impetus for the start of Coinbase maintenance last November was the lack of a reliable security guard to protect crypto assets.
• Currently switching from Wall Street Bashing Bit to Cryptocurrency Backer
According to the latest data from Autonomous Next Wall Street, interest in cryptocurrency is growing. There are currently 287 cryptocurrency hedge funds, and in 2016 there were only 20 cryptocurrency hedge funds. Goldman Sachs has even opened a cryptocurrency trading desk.
Coinbase also introduced Coinbase Ventures, an incubator fund for early-stage startups working in the cryptocurrency and blockchain space. Coinbase Ventures has already raised $ 15 billion for additional investment. His first investment was announced in a startup called Compound, which allows you to borrow or lend cryptocurrency while earning interest rates.
In early 2018, the company launched Coinbase Commerce, which allows merchants to accept major cryptocurrencies for payment. Another bitcoin startup was BitPlay, which recently raised $ 40 million in venture capital. 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 eliminate the need for central banking. In the process, it will reduce costs and create a decentralized financial solution.
• Regulatory Security Remains Strong
Coinbase has come under fire for restricting access to four cryptocurrencies. But U.S. regulators need to be careful when thinking about how to manage certain uses of technology.
A concern for cryptocurrency exchanges such as Coinbase is whether cryptocurrencies are securities that fall under the jurisdiction of the Securities and Exchange Commission. Coinbase is slow to add new coins as the SEC announced in March that it would impose security laws on all cryptocurrency exchanges.
The Wall Street Journal reported that Coinbase met with SEC officials to register itself as a licensed broker and e-commerce site. In such a scenario, it will be easier for Coinbase to support more coins and also to follow security rules.