Coinbase: The Bitcoin startup is expanding to take over most of the market

The price of bitcoin skyrocketed in 2017. Coinbase, one of the world’s largest cryptocurrency exchanges, was in the right place at the right time to take advantage of rising interest rates. Even so, Coinbase is not interested in taking its cryptocurrencies for granted. To stay ahead in the much larger cryptocurrency market, the company is putting money back into its master plan. By 2017, the company’s revenue was $ 1 billion, and over $ 150 billion was traded to over 20 million customers.

Coinbase, a San Francisco-based company, is 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 failing to be on the list for the previous two years. .

On its way to success, Coinbase has left no stone unturned in the hunt for key executives from the New York Stock Exchange, Twitter, Facebook and LinkedIn. In the current year, the size of his permanent engineering team has almost doubled. bought Coinbase this April for $ 100 million. This platform allows users to send and receive digital currency while replying to mass market emails and performing micro tasks. Currently, the company plans to bring in former Andreessen Horowitz venture capitalist, founder Earns and CEO as its first chief technology officer.

According to current estimates, Coinbase was estimated at about $ 8 billion when it set out to buy Earn.Com. This value is much higher than the value of $ 1.6 billion estimated in the last round of venture capital financing in the summer of 2017.

Coinbase declined to comment on its estimate despite having more than $ 225 million in funding from the largest toilets, 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 launch its own cryptocurrency exchange. Nasdaq, a rival of the NYSE, is also considering a similar move.

• Competition is coming

As competing organizations want to bite into Coinbase’s business, Coinbase is looking for other venture capital opportunities in an attempt to build a ditch around the company.

Dan Dolev, a Nomura instant analyst, said Square, a company run by Twitter CEO Jack Dorsey, could eat up Coinbase’s currency business as it began trading cryptocurrencies in its Square Cash app in January.

According to Dolev’s estimates, the average trading fee for Coinbase was approximately 1.8 percent in 2017. Such fees could force users to other cheaper exchanges.

Coinbase seeks to become a comprehensive store for institutional investors while protecting its exchange business. In order to attract investors to this class of white gloves, the company announced a fleet of new products. This class of investors was especially cautious when it plunged 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 client assets.

Institutional investors are concerned about security despite knowing that Coinbase has never suffered a hack like some other global cryptocurrency exchanges. The Coinbase president and CEO said the impetus for launching Coinbase custody last November was a lack of trusted custodians to protect their crypto assets.

• Currently Wall Street is moving from Bashing Bit to Cryptocurrency Backer

According to the latest data available from Autonomous Next Wall Street, interest in cryptocurrencies seems to be growing. There are currently 287 crypto hedge funds, while in 2016 there were only 20 hedge funds for cryptocurrencies. Goldman Sachs has even opened a table for cryptocurrency trading.

Coinbase also introduced Coinbase Ventures, which is an incubation fund for early-stage beginners working in cryptocurrencies and blockchain space. Coinbase Ventures has already accumulated $ 15 billion for further investments. His first investment was announced in a startup called Compound, which enables lending or lending cryptocurrencies with interest-bearing earnings.

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 risky 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 eliminate the need for central banking authorities. In the process, this will reduce costs and create a decentralized financial solution.

• Regulatory safety remains intensive

To limit access to four cryptocurrencies, Coinbase has drawn a lot of criticism. But they need to be careful as US regulators consider how to control certain uses of the technology.

For cryptocurrency exchanges such as Coinbase, the question is whether cryptocurrencies are securities that would be under the jurisdiction of the Securities and Exchange Commission or not. However, Coinbase is slowly adding new coins as 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 e-commerce site. In such a scenario, Coinbase would find it easier to support more coins and comply with security regulations.