Coinbase Exceeds its 2017 Revenue Expectation, Turning Down Further Funding
The crypto community has been abuzz with equal measure of good and bad news, but never before it seen a company tell venture capitalist firms to back off. Well, like everything else under the sun, there is always a first time. On January 22nd 2018, Recode reported that Coinbase was turning down offers for more funding from venture capital firms. Why, you ask? Well, apparently the company has experienced skyrocketing returns, surpassing its initial financial forecast of $600 million by 66 percent to hit $1 billion in revenue.
Over the past few months, Coinbase has experienced a rapidrise in the number of users registering for new accounts on its platform, especially during the months including November and early Decembe, when Bitcoin made a huge bullish rally to hit the coveted $10,000 mark.
But even with the rise and rise of interest shown towards the company by the general public and by investors at large, Recode reports that the company still remains a privately-owned entity that won’t open its doors to new investors.
How Does Coinbase Make Money?
Recode further establishes that the tremendous rise in revenue experienced by Coinbase is because of “layman interest in both Bitcoin and competing virtual currencies that users buy and sell through the app”. The $1 billion in revenue that Coinbase has made is definitely a confirmation of its position as the most popular cryptocurrency exchange and wallet in the US. Coinbase makes money on its Bitcoin exchange by charging a fee to buyers and sellers of cryptocurrency.
Investors Pining for Coinbase
The cryptocurrency market has seen a lot of attention from mainstream media with a huge public influx of new investors. Obviously, the newly-achieved Coinbase success has been noticed by VC investors, and if Recode’s report is anything to go by, the company’s stocks are one of the most sought after in the market. This is despite the fact that Coinbase is currently not allowing its stocks to be traded on secondary markets.
In fact, Coinbase shareholders have been warned against selling their stocks to outsiders as that would lead to a breach of Coinbase’s policy. According to a statement by Coinbase to Recode,
Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market. “ The company has promised to “take appropriate action” if investors are found to “have sold Coinbase shares…”
What are your thoughts and opinions about the success of Coinbase? Share your thoughts with us in the comments section.