Coinbase’ journey towards becoming a Unicorn
Disclaimer: Article sourced from InWara. This is not financial advice.
Coinbase has been the star of the industry lately attracting the top investors in crypto space. It has emerged as an epitome of how a startup with a clear vision can grow to new heights in an uncertain industry. Coinbase was one of the first crypto exchanges to receive US regulatory approval.
Coinbase has been only scaling up since then!
It started off with just Bitcoin and later on added Ethereum, Litecoin to its portfolio. In today's date, Coinbase has 5 coins listed and offers 9 wallets to its client base. Recent PR from Coinbase suggests that they are looking at a prospect of adding 30 new coins that is touted as a positive sign for the digital currency landscape.
Coinbase swimming against the tide
While BTC has lost close to 80% of its total market cap from Dec 2017 to Dec 2018; the value of Coinbase cryptocurrency exchange is catapulted in the opposite direction.
Nothing is a mistake! There’s no win and no fail. There’s only make!
Strong backing from top VCs and Institutional investors
Source: InWara’s Private Funding database
Coinbase has only been getting popular and the recent $300 million raised in series E round led by Y Combinator, Andreessen Horowitz, Tiger Global Management, Wellington Management, Polychain Capital brings Coinbase’ post-money valuation to $8 billion. It is commendable for a startup that is just 6 years old. WIth this Coinbase has entered the big league with LedgerX, Ripple, Gemini and Stellar.
Coinbase is one of the few companies to make profits in a bearish market.
Strategic acquisitions by Coinbase has made it a giant in crypto space
Source: InWara’s MnA database
Coinbase’ acquisition of Earn.com for $100 million remains the blockbuster M&A deal in 2018. US-based Earn.com uses the blockchain for its paid-email service, having raised more than $120 million from investors. This transaction was announced on 16-April-2018.
Success is credited to prominent VCs backing and well-experienced management
CEO & Co-Founder, Brian Armstrong has immense experience of 11 years in software and technology. Co-Founder, Fred Ehrsam has 10 years experience in the field of trading, software technology and was a trader with Goldman Sachs.
All about Coinbase exchange platform
Coinbase Exchange is one of the most popular exchanges in crypto space. It is available in over 35 countries and has added 6 countries just on 21st Dec 2018.
Designed with a very straightforward and user-friendly interface, Coinbase provides an easy way of buying/selling/investing in cryptocurrencies for the newbies entering the space.
Pros:
Coinbase is the largest US based exchanges that accepts fiat currency for trading in Cryptos!
Coinbase allows cryptocurrency trade in multiple ways, i.e, one can use bank transaction or credit/debit cards or can also exchange the cryptos for other digital assets. However, the timeline for the transaction to complete varies from method to method.
It is a very versatile exchange. Not only Coinbase acts as an exchange but also it can doubly act as cryptocurrency wallet!
Any trader on Coinbase can hold multiple wallets such as Bitcoin wallet, Etherum wallet, a Litecoin wallet and US dollar wallet or any country’s equivalent currency wallet.
Trader alerts!
To put it simply, Coinbase notifies the trader whenever any of the cryptocurrencies that you opt to watch hits a certain price point where you want to make a trade.
Cons
The extremely simple and user-friendly design of Coinbase is both to its advantage and disadvantages as well.
The really simple and intuitive design of Coinbase comes the added fee that Coinbase charges for the convenience and ease they offer.
For the transaction made via bank transfer (for US-based bank accounts), Coinbase charges close to 1.5% and for the transaction made via credit card they charge an upwards of 4% fee. Base trading fees and commission charged by Coinbase is 0.5% which is also relatively high.
Source: InWara’s Crypto Exchange database
Since the cryptos are traded globally most of the times people outside the US use either credit/debit card for the transaction, they are hammered with charges. These charges are applicable in both the cases when you buy and sell irrespective of the amount of cryptocurrency traded.
This poses a major concern for institutional investors and VCs who buy/sell cryptos in high volumes and if done with Coinbase exchange, shall attract high fees. Given the volatility of the crypto market, at times the investors would want to move their digital assets or cash out then you’re gonna get charged for every action.
Coinbase cookies might track the activity of its users in terms of how they spend their Bitcoin which is an intrusion of privacy to a certain extent.
Security features of Coinbase Exchange
First, Coinbase offers two-factor authentication which is an essential feature to have for any place that holds the digital assets of many traders.
Second, Coinbase has BTC vault which is an additional layer of security that a user has to pass to access the Bitcoin and it also supports Google Authenticator app which makes it a multi-layered protocol.
Snapshot from InWara’s Crypto Exchange database
Lastly, Coinbase is FDIC insured up to the value of $500,000 but the catch here is that it only covers funds held in USD wallet and doesn’t insure the funds held in any of the cryptocurrency wallets.
To sum it up
Coinbase realizes that the crypto space is still brand new which is both exciting and scary at the same time. To achieve its vision of creating an open financial system for the world, Coinbase is aiming at capturing the newbies trying to enter the crypto space right at their joining point which is why Coinbase is helping the newcomers understand the crypto world with its new tool Coinbase Learn on their website.
This tool will give a walkthrough of the ins and outs of the digital currency world. Coinbase aims to strategically place itself at a position where it is considered to be the one striving towards creating something new and shaping this industry.