[2018-10-03]Coinbase is now considered an $8 billion company

[vit05]

RECODE
Coinbase is now considered an $8 billion company

Coinbase is finalizing a deal that would value the company at about $8 billion, a transaction that would make Coinbase one of the highest-valued startups in the U.S. and help further legitimize the entire cryptocurrency industry.

The company is in talks with Tiger Global and its current shareholders for an investment of up to $500 million, according to people familiar with the matter. Coinbase is expected to add about $250 million in new money to its own coffers, the people said, and as much as $250 million more could go to buying out existing investors, though the exact amount has yet to been determined.

Coinbase is the leading marketplace for the trading of crypto assets, and it makes money on each order. It was valued just last summer at about $1.5 billion, but it was less-than-perfect timing — just before a massive spike in consumer interest in cryptocurrencies like bitcoin in the last quarter of 2017. The company’s core business has suffered since then with the sell-off in crypto prices this year, people familiar with the matter say, though executives like CEO Brian Armstrong have said they are not focused on momentary peaks and valleys in trading volume and focus instead on “building an open financial system for the world.”

The company, which has disclosed that it is profitable, has been talking with investors for almost all of 2018 about a secondary stock sale that would allow existing investors to cash out without the company neccessarily raising new, fresh money for itself. Inbound interest was so high at one point that the company issued a stern warning to dealmakers to back off from the company and its shareholders.

That secondary sale, though, has moved extremely slowly, and a final deal was never reached. A Coinbase spokeswoman declined to comment.

Tiger Global is a massive New York-based investment firm that gravitates toward these big deals in consumer-facing brands across the world. They have yet to show much interest in cryptocurrencies, however, which despite budding Silicon Valley interest still has room to grow with mainstream investors. The firm declined to comment.

It makes sense that this deal would value the company at about $8 billion: That’s the same price Coinbase tried to value itself at in one of its marquee acquisitions — Earn.com — earlier this year.

The company in 2018 has been scaling up dramatically as it prepares for a possible IPO. After losing an independent director this summer — David Marcus of Facebook — that IPO investors typically look for to ensure good governance, the company on Tuesday announced that it had added Chris Dodds of the traditional brokerage firm Charles Schwab to its board.

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[Harlot]

8 billions dollars is really a big number for a start up company and even though it is dwarfed by other conglomerates in the U.S. the chances of it growing exponentially is still there. The cryptocurrency industry is still an untapped industry for a lot of people and if consumers and producers will exploit it other companies aside from Coinbase will also grow by the billions. It may take a while but I know once it has started everyone will see that this industry is a new kind of investment for a lot of people.

[Kakmakr]

The worst case scenario would be if Coinbase decides to sell the company to large Banking groups in the future and then for these Banks to change the whole business model, like Circle did in the past. We already see how Coinbase slowly but surely changed their business model to be "Bank friendly" 

Coinbase are currently the pillar of the Bitcoin world in the USA and if they fold, a large percentage of the Bitcoin users will move to other platforms or abandon the scene. 

[Klausi]

8 billions dollars is really a big number for a start up company and even though it is dwarfed by other conglomerates in the U.S. the chances of it growing exponentially is still there. The cryptocurrency industry is still an untapped industry for a lot of people and if consumers and producers will exploit it other companies aside from Coinbase will also grow by the billions. It may take a while but I know once it has started everyone will see that this industry is a new kind of investment for a lot of people.

I agree mate, this will gain a good reputations around the world because of that reason. People will become more confident on entrusting their huge amount of money specially if they'll be planing to do trades with coinbase. They're $8 billion company is their biggest asset in terms of profitable trading gains that can cater lots of promising traders in the future. This company has the strongest security particular on hacking attacks, so people really been amazed of that performance on their end.

[milewilda]

The worst case scenario would be if Coinbase decides to sell the company to large Banking groups in the future and then for these Banks to change the whole business model, like Circle did in the past. We already see how Coinbase slowly but surely changed their business model to be "Bank friendly" 

Coinbase are currently the pillar of the Bitcoin world in the USA and if they fold, a large percentage of the Bitcoin users will move to other platforms or abandon the scene. 

We wont know on what would be their decision towards that scenario if they would accept or would just stand strong on their ground.I do really agree on the line that Banking groups will tend to
jump in into a particular thing which they do saw a thing that is interesting.Im not surprised that Coinbase do able to reach out this milestone yet it do only operates for 6 years.

[1Referee]

Coinbase are currently the pillar of the Bitcoin world in the USA and if they fold, a large percentage of the Bitcoin users will move to other platforms or abandon the scene. 

Coinbase is the pillar of everything I dislike about the banking system, because Coinbase is nothing more than a crypto bank, and once they are granted a banking license, they are a bank for real. These centralized services are a plague to everything Bitcoin was meant to combat, and what are people doing? They allow Coinbase to hold over $20 billion worth of crypto assets. 

Xapo holds like $10 billion worth of Bitcoin alone, which is crazy if you think about it. I think it's probably safe to say that 50% of all the Bitcoins in circulation are held by a centralized party.

If this continues even crypto will become a banksters paradise, and it may already be that behind the scenes. The market has been flooded with algorithmic trading activity.

[Slow death]

I agree mate, this will gain a good reputations around the world because of that reason.

I hope people know how to differentiate good exchange from bad exchange, they should not see exchages like yobit as if they were equal to coinbase, that is always the problem. people listen to good exchange things like coinbase and do not do research on other exchange before using these other exchange. The news channels should give space to post news about exchange like yobit that do not render good services, this for people to know about good exchange and about the bad exchange

People will become more confident on entrusting their huge amount of money specially if they'll be planing to do trades with coinbase.

People deposit a lot of money into any exchange, unfortunately they do it even for exchange like yobit, hitbtc

This company has the strongest security particular on hacking attacks, so people really been amazed of that performance on their end.

I did not know that but it's very good


Congratulations to coinbase and hope that other exchanges follow the same path

[gentlemand]

The worst case scenario would be if Coinbase decides to sell the company to large Banking groups in the future and then for these Banks to change the whole business model, like Circle did in the past. We already see how Coinbase slowly but surely changed their business model to be "Bank friendly"  

Coinbase are currently the pillar of the Bitcoin world in the USA and if they fold, a large percentage of the Bitcoin users will move to other platforms or abandon the scene.  

Circle is a fine example for anyone who doesn't have any vision. I found them 100% painless to use. Then they quit at the absolute nadir and I wonder how much profit they threw away by doing that. An absolute ton of it presumably.

Them buying Poloniex was a really bizarre move when their own brand was far less sullied.

Coinbase is no one's friend. They're not too far off actively anti Bitcoin and their sole purpose is to make a few people very rich. If screwing or abandoning their users achieves that then of course they're going to do it.

My own guess is that they aim to become the Amazon or Apple of crypto with all the gross behaviour that implies.

[vit05]

The worst case scenario would be if Coinbase decides to sell the company to large Banking groups in the future and then for these Banks to change the whole business model, like Circle did in the past. We already see how Coinbase slowly but surely changed their business model to be "Bank friendly" 

I believe much more in the possibility of Coinbase buying banks instead of being bought by one. Possibly this would facilitate in the regulatory aspect and could open a great variety of services that Coinbase could make available.

And not just in the US, with cash in hand they could go after small exchanges and banks in other countries. Facilitating the adoption of Cryptos as means of payment.

[BitHodler]

Them buying Poloniex was a really bizarre move when their own brand was far less sullied.

It's not really Circle's choice to say yes or no when the multi billion entities backing it think it's time to acquire an exchange that initially looked very promising. Looking back now, it's a $400 million flop.

Letting that exchange fail is cheaper than pumping like $50-$100 million in marketing and new core business strategies that are almost guaranteed to fail. It's the hard reality.

The majority of the users who remained loyal to Poloniex are on the brink of moving to another exchange, which is pretty sad actually. If even the few active users even think about leaving, then pack your stuff and swallow the hit.

[Lucius]

Coinbase is the pillar of everything I dislike about the banking system, because Coinbase is nothing more than a crypto bank, and once they are granted a banking license, they are a bank for real. These centralized services are a plague to everything Bitcoin was meant to combat, and what are people doing? They allow Coinbase to hold over $20 billion worth of crypto assets. 

Xapo holds like $10 billion worth of Bitcoin alone, which is crazy if you think about it. I think it's probably safe to say that 50% of all the Bitcoins in circulation are held by a centralized party.

If this continues even crypto will become a banksters paradise, and it may already be that behind the scenes. The market has been flooded with algorithmic trading activity.

I must say that you are absolutely right, Coinbase is hold to much crypto and this figure will likely to increase even more in future. This is not good for cryptocurrency because it is killing the basis on which the whole thing is built. Even we can read how seriously this company is handling customers funds which is really impressive, yet there is always the possibility of hacking. This is just one bad thing, and other is centralization - we do not know who can one day buy Coinbase, maybe some crypto hater who could decide to burn all stored coins.

Every user should be their own bank and have control over private keys, so much money in crypto on one place is not good thing.

[gentlemand]

I must say that you are absolutely right, Coinbase is hold to much crypto and this figure will likely to increase even more in future. This is not good for cryptocurrency because it is killing the basis on which the whole thing is built. Even we can read how seriously this company is handling customers funds which is really impressive, yet there is always the possibility of hacking. This is just one bad thing, and other is centralization - we do not know who can one day buy Coinbase, maybe some crypto hater who could decide to burn all stored coins.

Every user should be their own bank and have control over private keys, so much money in crypto on one place is not good thing.

Xapo's billions will primarily be the CEO''s rich buddies plus a handful of new arrivals. They won't have many retail customers left and probably don't want them any more.

Entrusting your money to coinbase is a user choice. They can leave any time they like. As soon as they can't it's game over for coinbase and everyone else will move on.

[1Referee]

Entrusting your money to coinbase is a user choice. They can leave any time they like.

It's more ignorance rather than a choice.

If people know they can easily install one of the plenty mobile wallet clients granting them access to their private keys without hassle, they will in most cases. If they also know how fundamentally flawed exchanges and crypto banks are (which Coinbase is), it will stimulate them even more to take care of their own funds.

The same applies to all the friggin baboons using Binance as wallet. It's no fucking wallet at all, neither a crypto bank. It's an unregulated platform you don't know of whether or not it will still be operational the next day because of regulators losing their patience. People will cry themselves to bed once things go wrong, and then there is no one left for them to complain to. It's their own fault.