Coinbase: A Bitcoin Startup is Expanding to Capture More of the Market

The price of Bitcoin rose in the year 2017. Coinbase, one of the world’s largest cryptocurrency exchanges, was in the right place at the right time to capitalize on the surge in interest. However, Coinbase is not interested in taking its crypto profits for granted. To stay afloat in the much larger cryptocurrency market, the company is plowing money back into its master plan. As of 2017, the company’s revenue was $1 billion and more than $150 billion in assets traded among 20 million clients.

Coinbase, a San Francisco company, is known as the leading cryptocurrency trading platform in the United States and with its continued success, it was ranked 10th on the CNBC Disruptor list in 2018, after not making the list the previous two years. .

On its way to success, Coinbase has left nothing unturned in the keynotes of the CEOs of the New York Stock Exchange, Twitter, Facebook and LinkedIn. This year, its full-time engineering team has nearly doubled in size. was acquired 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. The company currently plans to bring in former venture capitalist Andreessen Horowitz, founder and CEO of Earns, as its first chief technology officer.

According to current valuations, Coinbase valued itself at around $8 trillion when it set out to buy Earn.Com. This value is much higher than the $1.6 billion valuation that was estimated in the last round of venture capital funding in the summer of 2017.

Coinbase declines to comment on its valuation because it has more than $225 million in funding from VCs, 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 of the NYSE, is also considering a similar move.

• Competition is coming

As competing institutions look to take a bite out of Coinbase’s business, Coinbase is seeking other venture capital opportunities in an attempt to build a moat around the company.

Dan Dolev, an analyst at Nomura Instant, said Square, the company run by Twitter CEO Jack Dorsey, could eat into Coinbase’s exchange business because it began trading cryptocurrency on its Square Cash app in January.

According to Dolev’s estimates, Coinbase’s average trading fees were around 1.8 percent in 2017. They may refer users to other cheaper exchanges where fees are high.

Coinbase aims to become a one-stop shop for institutional investors while covering its exchange business. To appeal to that class of white-glove investors, the company announced a fleet of new products. This class of investors has been particularly wary of diving 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 in institutional money that could be invested in digital currency. It already has custody of $9 trillion in client assets.

Institutional investors are concerned about security, despite knowing that Coinbase has never been hacked like other global cryptocurrency exchanges. Coinbase’s president and COO said the impetus for launching Coinbase’s custodian last November was the lack of trusted custodians to protect their crypto assets.

• Today, Wall Street Changes From Bashing Bit to Cryptocurrency Backer

According to the latest data available from Autonomous Next Wall Street, interest in cryptocurrency appears to be on the rise. Today, there are 287 crypto hedge funds, while in 2016 there were only 20 cryptocurrency hedge funds. Goldman Sachs has also opened a cryptocurrency trading desk.

Coinbase has also introduced Coinbase Ventures, which is an incubator fund for early-stage startups working in the cryptocurrency and blockchain space. Coinbase Ventures has already raised $15 trillion for further investment. His first investment was announced in a startup called Compound, which allows him to borrow or lend 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 was BitPlay, which recently raised $40 million in venture capital. Last year BitPlay processed over $1 trillion in bitcoin payments.

Proponents of blockchain technology believe that in the future cryptocurrency will be able to eliminate the need for central banking authorities. In the process, it will reduce costs and create a decentralized financial solution.

• Regulatory safety remains vital

For keeping access to four cryptocurrencies restricted, Coinbase has drawn a lot of criticism. But U.S. regulators must exercise caution as they consider how to police certain uses of the technology.

For cryptocurrency exchanges like Coinbase, the concern is whether or not cryptocurrencies are securities that will fall under the jurisdiction of the Securities and Exchange Commission. Coinbase has been slow to add 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 officials to register as a licensed brokerage and electronic trading platform. In such a situation, it would be easier for Coinbase to accept more coins and also comply with security regulations.