Cryptocurrency exchanges, both centralized and decenatralized, have now breached the $1Bn mark in funding. Last week saw Coinbase’s total capital raised soar past $500Mn having successfully cornered over a third of US market trading volume this year nearing $220Bn from exchanges with fiat on-ramps. Backers though will now want to see more increased trading activity, the primary income source.
While trading volumes on Coinbase have hit a one-year low, so has global demand on spot markets (Diar, 30 October). Still, the exchange can claim a 12% increase in traded volume this year to date with 2 months left on the calendar year (see chart, Diar, 8 October).
Jan-Oct 2018: Coinbase Leads US Market Share of Traded Volume
Financials seen by Bloomberg saw that the popular exchange was sitting on over $503Mn in cash at the end of 1H18. With an ambitious projected profits of $456Mn for 2018, a 20% increase from 2017, and a funding round led by Tiger Global Management that has seen Coinbase’s coffers add $300Mn, the company’s war chest could be nearing a whopping $1Bn by the end of the year.
The announcement out of San Fransisco also came with much promise of quick-fire additions of crypto assets, the advancing of utility of their recent addition, a dollar-pegged cryptocurrency, and the on-boarding of institutional investors to the exchange’s custody services.
Shortly after the announcement, Coinbase grabbed headlines yet again last week with the listing of another token, Basic Attention Token (BAT), one of the five cryptocurrencies the exchange alluded to in July having already listed 0x (Diar, 16 July, 15 October). Cardano (ADA), ZCash (ZEC), and Stellar Lumens (XLM) are now in play.
Cryptocurrency exchanges have breached the $1Bn threshold in capital raised. And 2018 has seen a flurry of activity in exchange acquisitions, from Poloniex bought out by Circle, to the latest news out of Belgium, the sale of Bitstamp to South Korean subsidiary NXHM; the parent company also owns Korbit.
|| GO TOKEN OR GO HOME
With many options now on the table for users to purchase Bitcoin, the massive investments being poured into platforms can only indicate backer outlook for the sale of tokens, little to none of which have found any utility to date besides speculation, spearheaded by the signals of social media.
|| BETTER TO BEG FOR FORGIVENESS THAN ASK PERMISSION?
With regulators so far falling short in concerting efforts in classifying cryptoassets, exchanges may find legislative paralysis an opportunity rather than threat – at least for the time being (Diar, 12 February).
The article was provided by our partner Diar.