Coinbase last year revenues 1 billion US dollars of which 43% came from in December
36 Krypton friends • 2018-02-28 • Blockchain
Coinbase said in January it expects to earn more than 600 million U.S. dollars this year, but with more than $ 1 billion in revenue in 2017, helped by a wave of gains during Thanksgiving and Christmas last year.
According to foreign media reports, Coinbase, a digital currency trading and wallet service platform founded in 2012 backed by Silicon Valley investors, said the company has realized a revenue of 1 billion U.S. dollars in 2017. Yet another independent analysis by Superfly Insights reports that Coinbase’s revenue also started to plummet after that when Coinbase’s revenue accounted for 43% of its revenue for the full year, while the bitcoin price soared in December last year.
“Their magic has not continued,” said Jonathan Meiri, chief executive of Superfly Insights, after analyzing Coinbase’s data. “Although there was a sharp rise in December, signs of collapse began in January and February.”
The analysis of Superfly Insights Company is based on the income and aggregate data of anonymous email, the data come from the data of 25,000 users in the whole of 2017 and the first six weeks of 2018. The data is collected through Productivity Applications, Personal Finance Applications and Expense Management applications. Superfly Insights typically provides clients with this type of data and analysis, including hedge funds, banks and venture capital firms. Meri said Superfly Insights also provided data and analysis to KPMG. “Of the top five taxi applications in the world, three use our data.” Meri said data collection is limited to the terms of each application or service, and the tracking process complies with strict privacy laws in Europe as well Follow normal data protection regulations.
Coinbase said in January it expects to earn more than 600 million U.S. dollars this year, but with more than $ 1 billion in revenue in 2017, helped by a wave of gains during Thanksgiving and Christmas last year. Taking into account the madman in 2008 Bitcoin extreme rise in prices, this performance is reasonable.
Nicolas Christin, a Carnegie Mellon University professor, said Superfly Insights’ data is more reliable after he traced digital currency through the well-known Silk Road website. However, Kristen believes rigorous verification of bitcoin blockchain technology is extremely difficult, as platforms like Coinbase trade exclusively through bitcoin. Coinbase now refuses to respond to this.
It is not surprising that Coinbase’s revenue dipped as the cryptocurrency market, especially Bitcoin, rose, and the New York Times called Coinbase “the heart of bitcoin fanatics.” Coinbase charges an agency fee for a Bitcoin transaction, depending on the user’s location and currency. In December last year, bitcoin prices soared from $ 11,000 to $ 19,000 and then dropped sharply to $ 13,000. Just that month, Coinbase’s servers experienced multiple downtime because of the unpleasant impact of high traffic. According to the Times, the peak traffic to Coinbase servers in December last year was double the previous highest record and eight times that of June last year.
Higher prices and larger volumes mean that Coinbase charges higher transaction fees. This record will not be able to be refreshed unless the price of Bitcoin soar in 2018. “Unless the rally resumes, otherwise, it is very difficult to exceed the revenue of 2017.” Meri said. “It’s not easy to reach the same revenue level.” Of course, many cryptocurrencies predict that a new wave of market increases will occur in 2018, and some of these experts have deep roots in Coinbase. “Bitcoin will soar to $ 50,000 by December,” said Thomas Glucksmann, director of marketing for cryptocurrency trading platform Gatecoin, in an interview with CNBC.
Coinbase is generally considered the darling of the wave of cryptocurrencies, the company first sniffed out business opportunities in this area. For a long time, ordinary people had hard-pressed access to cryptocurrencies, except to find out how to “dig and coin” and to find someone who was willing to buy or sell cryptocurrencies. Coinbase is the first service platform that supports the purchase, storage of bitcoin and other digital currencies via bank transfers and credit cards. Brian Armstrong, chief executive of Coinbase, not only received media interviews but also meetings, in stark contrast to the mysterious, anonymous trader of the bitcoin 1.0 era. At the same time, Silicon Valley of Coinbase has its own legitimacy. By the end of 2017, Coinbase’s overall performance was excellent, despite frequent customer service problems and lawsuits with the IRS. The New York Times has said that Coinbase already has a two-story office in San Francisco.
However, Coinbase’s competitors are pressing harder behind, and now investors have many different options to buy cryptocurrencies. In 2018, Robinhood, which includes Square and the stock exchange, added support for cryptocurrencies, and both said they would not charge service fees for cryptocurrencies, putting a heavy strain on Coinbase.
In the survey, Superfly Insights also found that the revenue share of Coinbase has changed dramatically in a year. In early 2017, Bitcoin transactions accounted for 90% of Coinbase’s total transaction volume, with an average payment of $ 483. A year later, bitcoin trading is less than half the deal at Coinbase, as Coinbase has also started supporting transactions in other cryptocurrencies, such as Ethereum and Litecoin. At the same time, Superfly Insights also found that Coinbase users seldom sell their bitcoin, and once the user does that, the price is usually three times the average price, reaching $ 1,393.
Meri pointed out in the report: “I’m curious how Coinbase builds a recurring profit model, especially given the low average return on users. People buy Coinbase and accumulate a certain amount of money, and that’s where the problem lies Every single day I have to look at the price of bitcoin, what struck me is that there is very little that can be done.
According to the analysis of Superfly Insights, Coinbase’s income changes reflect the instability and imbalance of the cryptocurrency world, which is still in its infancy. Coinbase may be able to increase revenue through other business platforms and may even convince merchants to accept digital currency payments. Because if more businesses accept the use of cryptocurrencies to pay, then the price of these currencies will go up. It depends on whether Coinbase can convince more companies to join the world of digital money. Meri said: “Coinbase needs the business world to help become part of the business deal, but the fact is that most of the businessmen are not interested in relatively small bitcoin or other cryptocurrencies.”
Coinbase has now raised more than 225 million dollars from investors, and the company valued at 1.6 billion U.S. dollars after the most recent round of financing, partly because of the explosive growth and volatility in bitcoin prices.