For reference, BP the number five global oil behemoth with 200B in revenues in 2020, has a market cap of 85B. Coinbase that sells pumped speculation for a fee has a market cap of 100B.
Markets are efficient.
Markets are efficient.
Also, since when does anyone care if casino's business is based on pumped up gambling. As long as there are millions of transactions going on, the business model will stay 'efficient'.
Given we have financial crises in the global economy on roughly a decade basis, and the last one was 2008, there might be another one soon ..
I have a timeshare to sell you.
The real money is in crypto-timeshares.
We have all the advantages of a timeshare business, and also blockchain.
With the emergence of a new group of people that have massive crypto reserves at their disposal, paying for a timeshare in crypto would make that asset accessible to them natively.
It’s not a bad idea. If crypto is a new paradigm, the world will need crypto-XYZ to appeal to that crowd. Cars (Tesla), and timeshares are among them.
* Completely made up digital money with no government backing that you have to convince some sucker to take so they give you two free pizzas.
In the 90s this would be:
* Keeping track of your friends on your computer!
* Carrying a computer around that you use to take pictures of yourself and send them to friends!
In the 80s this was
* Electronic music without words.
* Reading books on your computer
Store of wealth? Aight, you got me. Solid arguments to be made for it as a new anti-fiat. Its recent divergence from gold concerns me though. That seems bubbly.
As a settlement protocol between nations and financial institutions? Already well proven out and in use. No argument to be made.
What do you think makes crypto useful?
Arbitration, insurance, etc. can also be recreated on-chain and already exist to some extent although it is quite early days still.
1) The energy consumption of bitcoin mining alone is estimated to have reached the levels of entire countries (Argentina was the latest country I've heard it being compared to), while actual usage of bitcoin (except for speculation) is still a fringe niche thing
2) When shown that the coins do not scale, instead of moving on to an improved version, those coins continue to grow. Instead of 'okay, proof of concept done, it does not scale, let's move on to an improved version', the bonanza just continues.
There are probably more reasons like these, but I think it would be straight-up weird if the technically versed audience of HN would disregard the reasons above as much as the current crypto-markets do.
Does anyone know what the value of assets under management by Coinbase is?
By the way, Coinbase revenue in the last quarter was nearly 0.1% of the entire crypto market cap.
So, Coinbase took around 60$ of any 10,000$ traded on Coinbase, and 10$ of any 10,000$ crypto market cap, which implies that 1/6 of the entire crypto market cap traded through Coinbase once this quarter, unless I'm mistaken.
See the second story in Matt Levine's Money Stuff: https://www.bloomberg.com/opinion/articles/2021-04-14/good-a...
[1] more likely, the percentage is fairly constant, while the USD value fluctuates a lot with crypto prices, so "AUM" might be around USD 200 billion now (as crypto market cap is USD 2 tr).
How do you justify your $1000m valuation of a company that generated $700m of PROFIT in a single quarter?
Coinbase did $1.28B revenue in 2020 with something like half of it coming in q4. This was before Venmo, Cashapp, Paypal, etc. started selling crypto. The cost for customer acquisition is about to skyrocket at the same time fees are about to plummet.
There's a reason Coinbase is rushing to DPO right now. The stars are perfectly aligned for them to get out while the getting is good.
But yeah the valuation for Coinbase is also insane!
a company that inefficiently mines a resource that's going to be stored forever and mostly used to speculate
If you look at production vs. consumption in the world there's usually a bit more consumption than production. If you look per country on the US there's more production than consumption. That's because "extraction" is heavily played with to speculate with the price.
They are certainly great at turning air into gold. Maybe that was always their true purpose.
Well first of all everything is speculation, it goes both ways, you mentioned BP, well people use barrels of oil today because they think it won't be worth more tomorrow
Coinbase takes a fee for every transaction in the assets traded on the platform.
The asset in question is the one which people choose as the asset to hold on to express their fears of inflation
This is not unlike 2010 when people like Stanley Druckenmiller and libertarians alike predicted hyperinflation due to QE.
Normies are where Druckenmiller was back in 2010, they have an irrational fear of inflation and they express it by buying BTC.
Coinbase is perfectly positioned to gain from this movement which emerged, and it will only continue given that like anything the more authorities tell humans what to do (in this case to spend) the more they rebel by doing the opposite
sells pumped speculation