Coinbase was the first cryptocurrency exchange to go public in the US and is the second largest exchange around the world. Founded in 2012 and headed by Brian Armstrong, Coinbase is a well-established and reputable player in the crypto space. The company offers many products from a Coinbase card to an NFT marketplace, on top of being one of the most popular exchanges in the world.
As with most cryptocurrency exchanges, Coinbase offers digital asset trading, custody and services. The program includes over 100 million verified users and almost 100 billion dollars worth of assets on the platform.
The exchange offers a wide range of cryptocurrencies, contrary to many other exchanges. Coinbase claims to have rigorous vetting processes, with over 200 digital assets available to trade on the platform. Coinbase is the only public cryptocurrency exchange in the United States and is one of the go-to options for crypto services.
The Coinbase Card
The Coinbase card comes from a partnership with Visa and offers a debit card with cryptocurrency rewards. The card allows users to earn cryptocurrency for every purchase, allowing diversification of reward assets and the ability to spend cryptocurrency or fiat without fees. Credit checks are not required and there is no monthly or annual fee either.
Cryptocurrency credit and debit cards have received a lot of hype lately, causing most of the leading exchanges to start offering them. As the crypto space gains adoption, simple crypto cards will be in high demand.
Coinbase’s crypto custody wallet is simple and easy to use. Over 340 assets are supported by the wallet, many more than are available to purchase on the exchange itself. If you are looking to purchase a cryptocurrency offered in the Coinbase custody wallet, first purchase a token supported by both the custody and exchange platforms. Swapping the token originally purchased for the intended token inside the custody wallet is a possibility.
Coinbase’s wallet supports NFTs and many Ethereum-based tokens, making it a popular option for centralized custody. A solid and trustable option for a non-self custody wallet, although it is always recommended to go with a self-custody wallet.
The Coinbase wallet is a custody wallet, meaning Coinbase holds your seed phrase. You may set a passcode to gain entry to the app, but Coinbase can still access your seed phrase. The seed phrase is all that anyone needs to access the entire wallet and make transactions. It is generally thought of as best practice to hold your own seed phrase offline where only you can access it, coining the term “Not Your Keys, Not Your Coins”.
Coinbase’s NFT Marketplace
The NFT marketplace by Coinbase launched in the spring of 2022 is still in the beta version. The NFT marketplace by Coinbase allows you to create a profile for trading NFTs, connect with your favorite artists and even utilize the Coinbase wallet for custody. Popular collections available on the platform right now include 10KTF (the metaverse shoe company acquired by Nike), BAYC, CryptoPunks, Moonbirds, CloneX and Pudgy Penguins.
Coinbase NFT has just over 12,000 users and barely crosses 4,000ETH in volume since the service launched. This is according to Dune Analytics, which reports well over a million in ETH volume over the same time period for the popular OpenSea exchange. A slow start for the leading exchanges marketplace but with over 100 million users on the platform they should be able to turn that around.
Shut down by the SEC before it could begin, this program was a recent attempt to offer a yield to users. Several months ago, Coinbase announced a new initiative, offering 4% APY on the stable coin USDC. This directly competed with traditional bank saving accounts which typically offer APY around 0.01-0.1%. After many months of engaging with the SEC regarding the Lend program, the SEC sent a legal notice letting Coinbase know they intended to sue.
High APY in the crypto and DeFi space is common, with a 4% yield almost being considered low in the digital asset industry. Similar programs offered 8% APY, while some staking methods bring 10%+. The SEC stopped the Coinbase Lend program without giving a definitive reason, following the usual method of regulation by enforcement. The government agency has become notoriously corrupt and often sues digital asset companies without a specific reason, providing little regulatory clarity for the industry.
A service offered by Coinbase exchange for accredited investors and financial institutions is Coinbase Institutional. Coinbase maintains over 14,000 clients in the institutional branch of the business. Deep liquidity, advanced trading tools, API infrastructure and in-depth data research really set Coinbase Institutional apart from other large-scale crypto firms.
Recently, Partnering with BlackRock has helped put Coinbase’s institutional services on the map. BlackRock is the world’s largest asset manager with over ten trillion dollars worth of assets under management. Because of this, much of the traditional financial world looks to Ray Dalio’s fund, BlackRock, as a role model. Institutions will lead the mainstream adoption of this revolutionary digital asset class.
Institutions bring investment services for high-end clients and many now offer Bitcoin and digital asset investments. One of the top indicators of adoption in the traditional world, this is a great sign for the entire digital asset space.
Coinbase Exchange, The IPO
The digital asset company went public on April 14th of 2021. COIN first appeared on the public markets at $381 per share, after receiving a reference price of $250 by Nasdaq. The reference price often points to the expected opening price, with Coinbase coming in over 50% higher. The first trading day ended with a stock price of $328 after hitting a high of $429. At the end of the first day, the first cryptocurrency exchange to go public was valued over $85 billion.
Coinbase made headlines recently by posting a billion-dollar loss, with a share price under $100. This left the company with a valuation of just over $20 billion, compared to the extreme valuation when it began trading. Digital Currency Group, Pantera Capital and Andreessen Horowitz all took part in funding rounds pre-2014, while Coinbase was valued at under 50 million dollars.
Coinbase exchange also has a venture capital arm in the company. Coinbase’s investment portfolio is interesting to watch, as it could give hint on where the company is looking in the digital asset space. Some of the firm’s most notable investments include Polygon, Dapper Labs, Alchemy, Consensys, BlockFi, OpenSea, FTX and Animoca Brands.
Investments in some of the industry’s leading companies have helped Coinbase stay on top of the game and continue building a highly in-demand platform. Coinbase Ventures can show where the company is investing, rationally meaning they are also looking at adding those tokens or integrating those protocols somehow. Coinbase invested in Dapper Labs years ago, just recently adding their token $FLOW to the exchange. Keep an eye on venture firms in the space, as they could be leading indicators on where to look for new investments.
Is Coinbase Safe?
Coinbase being a public US company, facing scrutiny from government agencies, is one of the biggest reasons it is such a safe crypto exchange. The company is required to file financial statements quarterly and keep shareholders updated. Coinbase is also one of the few exchanges to have never halted customer withdrawals.
Freezing customer assets and refusing withdrawals is a common problem the digital asset space has been seeing lately. Coinbase’s public financial statements allow potential investors to see exactly how risky it is to hold money with the company.
Public and audited financial statements make assessing the risk involved with Coinbase much easier than other exchanges. This does not mean Coinbase is less risky, per say, but that it is easier to judge the risk levels on a corporate level. We have seen many blockchain hacks lately, totaling over a billion dollars this year and just as many firms over leveraging positions and not handling customer funds properly. This happened to 3 Arrows Capital and Voyager, causing the recent bankruptcy filings.
Coinbase exchange is safe, legit and authentic. Of all the digital asset exchanges it tops the list for most reputable and the safest. Top-level security and a simple interface make Coinbase a convenient choice for the average cryptocurrency trader.
If you are looking for an extra reason to sign up for Coinbase today, here’s a free $10 to get started!
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