Cryptocurrency bulls point to the recent IPO of Coinbase as further evidence that cryptocurrencies rocket fueled by not much more than speculative FOMO has gone mainstream. But necessity is the mother of inventions and the need to escape from central banks skyrocketing money supply M2 to the moon, and the repression of precious metals gave birth to a rebel with a cause, cryptocurrencies.
But cryptocurrency is neither a currency nor a commodity and perhaps it is too radical for the current order to be a store of value.
Nevertheless, the best investment over the past year has been a vote of no confidence, cryptocurrencies, which aficionados see as the new digital gold safe haven.
Let’s zero in on Coinbase starting at the ground level with a definition
Coinbase is the world’s largest cryptocurrency exchange founded in 2012 by entrepreneurs Fred Ehrsam and Brian Armstrong, who currently serves as the company’s CEO.
When Bitcoin was in its infancy it was pretty much impossible for people without coding expertise to use the currency. So Coinbase set out to provide non-geeks with a more accessible platform through its user-friendly Coinbase app, which enables its users to buy and sell about 50 different cryptocurrencies, like Bitcoin, Ethereum, Litecoin. Similar to stock trading apps Coinbase shows the current price, trends, and cryptocurrency news.
Coinbase has been riding the cryptocurrencies wave, it now has about 56 million users and had a trading volume of $193 billion in 2020.
Has does Coinbase make money?
Margin fee. Also known as the spread, Coinbase charges about 0.50% for crypto purchases and sales, although this rate varies depending on market conditions. The margin fee you end up paying depends on the change in price between when you get a price quote and when the order is completed.
Coinbase Fee, another income stream, is a commission on all crypto transactions, charged in addition to the spread.
Coinbase has several other lines of business in addition to its exchange services
For example, Coinbase Commerce provides online retailers with software that lets them accept cryptocurrency payments. Coinbase’s plugins are used on a variety of e-commerce platforms.
Coinbase Card is in the early stages of giving its users a physical Visa debit card and an accompanying app to spend cryptocurrencies in the physical world by converting crypto to US dollars when used.
USD Coin (USDC) offers its very own cryptocurrency, USD Coin (USDC), which is built on the Ethereum platform. Its value is tied to the U.S. dollar, so 1 USDC is always worth $1.00.
Coinbase took in about $1.3 billion in revenue in 2020, more than twice as much as the year earlier, according to a recent SEC filing
Coinbase has no unique selling point, its current revenue is vulnerable to commission-free trading platform Robinhood
For instance, allows investors in most states to purchase cryptocurrency as have PayPal and Square. Moreover, the cryptocurrency ban is spreading across the globe from India to Turkey, which I forecasted would happen years ago.