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Author: Admin | 2025-04-28
Direct listing on the NASDAQ in April 2021. As of December 2021, Coinbase had more than 73mn verified users, they operated in more than 100 countries, and their cryptocurrency volume traded in the past quarter nearly eclipsed $330 billion dollars.21Coinbase is a full-service crypto platform today with operations spanning retail and institutional trading, lending, custody, wallets, staking, debit cards, blockchain analytics, commerce integration, cloud services, a soon-to-launch non-fungible token (NFT) marketplace, and more. While Coinbase’s revenue is still dominated by retail trading today, institutional trading revenue and subscription and services revenue are making up a growing portion of their topline. Subscription and services revenue encompasses a very diversified mix of revenues, and this segment grew by a staggering 1256% quarter-over-quarter as of September 30, 2021.22Within the subscription and services segment, revenue from blockchain rewards is the largest contributor. This line item was bolstered by Coinbase’s acquisition of Bison Trails in January 2021, a blockchain infrastructure platform-as-a-service company.23 Bison Trails allows anyone to participate in proof of stake blockchain networks without requiring the technical know-how of running a validator node. Bison Trails provides services allowing individuals, custodians, crypto exchanges, and funds the ability to earn a staking yield on certain cryptocurrencies which they take a performance fee on.Another key business for Coinbase is their cryptocurrency custody business. Coinbase Custody offers a standalone and independently-capitalised business providing custodial solutions for funds, institutional clients, and high net worth individuals. Coinbase Custody was built through the acquisition of Xapo’s institutional business in August 2019, and it’s believed that Coinbase Custody is the largest cryptocurrency custodian in the world, maintaining custody of the assets held across Grayscale’s full suite of products, amongst many other clients.24Other drivers of service revenue include the Coinbase Earn program, where cryptoasset issuers use Coinbase as a medium to disseminate educational content about their cryptocurrency or token to Coinbase’s large retail user-base. These cryptoasset issuers provide the end-user with a nominal amount of the cryptocurrency for consuming the educational content about their network, and Coinbase charges a small distribution fee for providing this access.25 Coinbase also generates interest revenue by providing crypto-backed loans to retail and institutional clients.26Overstock: An eCommerce business that supports cryptocurrencies and invests in their innovationOverstock is predominantly known as an e-commerce business providing a range of products such as furniture, home décor, and housewares. However, beginning in 2014, Overstock implemented a multifaceted approach to increase its exposure to blockchain technology and cryptocurrencies. First, the company partnered with Coinbase to allow their e-commerce customers to pay with bitcoin, and Overstock added the flexibility to hold portions of this bitcoin earned on their balance sheet.27, 28 Second, Overstock began a more holistic initiative to develop and advance blockchain technology
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