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Comment by slg | Hacker News Reader

It is impressive that Coinbase took VC money as recently as 8 months ago according to Crunchbase and they are now funding other companies. Although I am not sure I would love that if I was an investor in Coinbase.

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Coinbase made a billion dollars last year. I think the investors are pretty chill with whatever.

https://www.recode.net/2018/1/22/16911692/cryptocurrency-bit...

As they say "Taking cold hard cash via commision m-- f--" - https://youtu.be/wM6exo00T5I?t=76

> Bitcoin is altogether only worth about $175 billion in market value as of today’s trading price of about $10,500

Heh -- around $6,600 today. I guess it's true what they say about gold rushes: the people selling shovels are the only ones who really make money.

And about $660 18 months ago. Important to maintain perspective in matters like this.

I agree -- BTC is an extremely volatile speculative vehicle. God only knows if it will be worth nothing or everything in 12 months, but everyone with two brain cells to rub together knows not to treat it as a currency.

It doesn't mean it's not a good investment though. High ROI goes with high volatility and high risks for all investment types.

Airware is doing similar thing. It is about bringing excitement and creating ecosystem.

If cryptocurrency fails, coinbase goes bust. But coinbase cannot do everything themselves.

Slack does the same.

this - the real headline here is that this is the top idea in their mind, over all the other things they could be doing with their time - what are they terrified of?

they don't have to be terrified of something, i assume. It's more like they have probably grown enough that they see this as the best use of extra capital.

The scarce resource is the CEO's time

Even design startup Invision launched a fund: https://www.invisionapp.com/design-forward-fund

InVision has actually raised even more than Coinbase from VC

Ha. I'm waiting for the InVisitoken.

A lot of startups do this with their extra cash when a more thriving ecosystem in whatever area they operate in will directly help them. E.g. Slack has a fund investing in chat bots.

They also did over $1B in revenue last year

Actual revenue, or just market trading volume? If the latter, $1bn sounds like a lot but actually isn’t really.

I believe it's actual revenue

Might still not be that much, if earnings through exchange rate gains were also part of their revenue. btc made what? Over 1000% in that year? If they pooled earlier in the year that are huge gains. If it's only from their 1.5% cut, it is really impressive.

Exchanges are literally printing money. I think nearly a million Ether a day was traded on Gdax at the top.

At $1,400 you're talking $1.4bn a day in trading volume, on (at least) half of which they take a 0.3% fee. That's $2.1m a day, just from ETH. Then there's Bitcoin and Litecoin. Bitcoin probably makes a similar amount. And their "simplified" website on which they charge higher fees.

They would be fractional if they were literally printing money.

Right, it's Tether which is doing that, not Coinbase!

It was fee revenue

It's gotta be actual revenue. $1bn in market trading volume for Coinbase sounds tiny. That's only a few million per day.

Actual revenue https://www.recode.net/2018/1/22/16911692/cryptocurrency-bit...

> Recode has learned from industry sources

First, it's unconfirmed. What exactly does "industry sources" mean? That someone who knows someone who works there said "oh ya we make a billion dollars dude".

Second, it could also mean "gross revenue" in some form.

I don't believe any of this stuff until someone reputable confirms some level of it. Doesn't it seem strange that they made "exactly $1b"? Not $750M, or $1.2B, or $500M, but $1B?

I think the jury is still out.

Doesn't it seem strange that they made "exactly $1b"?

That would be strange, but the article doesn't say that, it says "over $1 billion".

Of course it's not the latter. $1bn is like a couple of days of trading volume at GDAX alone.

Profit is what matters. I imagine it's pretty large also.

I guarantee you they didn’t spend $1 billion last year

Why would they be raising VC then?

Most of that $$ was loaded towards the end of the year, so they were in the middle of the raise as it ramped up insanely. They closed the raise before the revenue was hitting that mark, announced it in August, then it turned out to be likely irrelevant when they made another $600m to finish 2017 and no signs of stopping (although slowing) in 2018.

Founder cashing out some might also be a reason.

Think of it as Marketing.

Agreed. But they are not the first to do this.. There are a few others that did it in a short timeframe. Albeit they raised much less.

Request network is doing something similar. Also a yc funded project.

Slack does the same.

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