The CFO of Coinbase – one of the biggest and most powerful digital currency exchanges in the world – unveiled some of her thoughts on the future of the crypto industry and where she thinks the company will go from here.
How Coinbase Is Planning to Change
Alesia Haas says that Coinbase now has a valuation of approximately $70 billion despite crypto transactions being down this quarter. Between quarter three and quarter four of 2021, monthly transactions fell from just under nine million to about 7.4 million, though things are still up from the six million Coinbase witnessed during the second quarter.
At the end of the day, Haas does not feel that Coinbase is a trading business, and thus the company has learned not to depend strictly on fees from trades to garner revenue. In fact, the company has plans to potentially lower its fees in the future. She stated in an interview:
We don’t think of ourselves as primarily competing on fees today. Fees are not the primary aspects that we compete on.
Rather, the company has learned to rely on other products to keep its revenue solid, especially during times of heavy volatility. For example, Coinbase has seen continued success with the Coinbase Card, a prepaid crypto credit card established with help from Visa. In addition, the firm is digging deeper into the growing world of decentralized finance. Coinbase is also exploring staking options for its customers.
But more than anything, Coinbase has institutions to thank for its high level of income. These institutions are most active during times of low volatility and are frequent users of Coinbase Pro.
We do think, in the long term, that we will see fee compression as more and more products will become commoditized in crypto, and so we’ve already begun focusing on diversifying our revenue… They’re also engaging with products like staking, earn, borrow, and lend, and this is just the beginning.
Haas also issued comments about the growing bitcoin exchange-traded fund (ETF) space. Not long ago, a company called Pro Shares released the U.S.’s first bitcoin ETF on the New York Stock Exchange. While it is based on futures technology rather than actual bitcoins, the product has potentially opened the door to spot trading, and Haas thinks it’s possible that such an item will make its way through the cracks, though she has a feeling it may be a while before it arrives.
The ETF Market Will Feature Interesting Adaptations
Crypto spot markets are 24/7 global. There’s never a dull moment in them, but the ETF market, obviously, follows the traditional security timeline.
In any case, she thinks that bitcoin ETFs are likely to push the crypto space forward, and she sees Coinbase being an active custodian for the ETF market in the future.