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Comment by rgifford | Hacker News Reader

Literally compare COIN to any other market maker or financial institution. I would love to hear some justification here.

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https://www.advratings.com/banking/worlds-top-banks-by-marke... : it's in the top 10-20.

Does anyone know what the value of assets under management by Coinbase is?

All crypto is < 1T. I don't know what their market share is, probably high 100Bs.

All crypto is > 2T, as of the last few days

AUM is the absolute wrong metric to measure for an exchange. This is why I tell everyone to never pretend they understand a subject the moment you read the first Wikipedia page you come across.

USD 90 billion "assets on platform" (which, as has been pointed out, is not a good metric for an exchange at all). That's about 5-12% of total crypto assets (depending on the time of day) [1].

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).

The fundamentals of Coinbase aren't actually that far off if you assume that their $730-$800 million Q1 income is sustainable.

Worth $1B tops.

How do you justify your $100m valuation of a company that generated $700m of PROFIT in a single quarter?

Nice edit.

How do you justify your $1000m valuation of a company that generated $700m of PROFIT in a single quarter?

q4 2020 and q1 2021 were anomalies. The government put $900B in stimulus money into individuals pockets. There is probably no single company that got more benefit from those payments than Coinbase. The fear of inflation from unfettered spending drove investors into crypto with the idea that it was a hedge against inflation. I don't buy that value proposition for crypto but it did drive prices higher. The stimulus also put money directly into individuals pockets many of whom were hoping to cash in on the boom.

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.

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