Should I buy COINBASE shares?

Time for another epic thread?

You mean a plattform that is easy to copy and all you need is just making transactions cheaper to compete?

For me it‘s heavily overvalued.

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Same. 10 billion market cap max.

Btw, ARK bought 250+M already

Have you analysed their business model, competition etc? I guess the base assumption is that BTC goes to the moon, their market share as a broker between the banking world and crypto world remains high, and their commissions stay high. Then if BTC goes 10x, Coinbase’s gross fees go 10x. If that’s possible is anyone’s guess.

By the way, imagine a closed system where you are paid for your work in crypto. Then you spend that crypto in local market buying veggies, eggs & meat. This would allow to bypass any kind of exchanges. It is unthinkable in western economies, but in countries like Venezuela, why not? Also, in any country where hyperinflation happens and people decide they’ve had enough with government-backed currencies.

If you stay out of the traditional monetary systems, the government will struggle to tax your income, which for some might also be attractive. But that’s also where an exchange like Coinbase could see reduced interest. That’s all very hypothetical though, and probably many years ahead of us.

Yes, and I’ve seen that most of the income is done with transaction fees and thus I think fairly coupled to the price/success/volume of bitcoin. For a “non-boomer” I think at this point it’s better to invest directly in BTC (or an ETF/ETP) instead of the, at the moment, major platform.

To get some crypto exposure but without holding some maybe not bad, or for ETFs like ARK or an IRA/401K maybe not bad.

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Be careful…

In a world where financial regulations are constantly increasing I see no longterm future for crypto currencies. It just doesn’t work in our economy.

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I’d say the more regulations, the bigger the chance for crypto. Financial regulations are an operating system for economic activity. If they become too bloated, people will seek alternative.

Both of you are right.

The more regulations, the bigger its chances …in black markets.

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Boo hoo. Blockchain naturally challenges the status quo, so it will be at odds with the traditional financial system. I’m curious to see what happens if the governments and banks don’t have control over our savings and transactions. They would have to find other ways to collect money. It could start in one place and spread from there.

For quick reference, q1 earnings 2021:

  • Verified Users of 56 million

  • Monthly Transacting Users (MTUs) of 6.1 million

  • Assets on Platform of $223 billion, representing 11.3% crypto asset market share

    • Includes $122 billion of Assets on Platform from Institutions
  • Trading Volume of $335 billion

  • Total Revenue of approximately $1.8 billion

  • Net Income of approximately $730 million to $800 million

  • Adjusted EBITDA of approximately $1.1 billion

If you are skeptical you might want to wait q2 earnings to see if the trend continues. Also keep in mind OTC deals, I can imagine it is a big business for them.

Finally, a fun thread from the past, when Brian Amstrong was looking for a cofounder on Hacker news back in 2012: Coinbase (YC S12) seeks to bring Bitcoin to the masses | Hacker News

People were already saying Coinbase is a bad idea :wink:

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Money Stuff had some amazing numbers:

Almost $1 out of every $1,000 in the entire crypto market — not $1 out of $1,000 traded, but $1 out of $1,000 of all the crypto that exists — went to Coinbase.

I guess the risk is that there likely isn’t much of a moat, so there might be large risks of disruption (e.g. race to bottom if other institutional players enter, because why not it’s free money), but still that’s an impressive number.

For comparison on the mature side of finance, margins are nowhere near that:

[…] of all the money in equities in the world, Goldman collected considerably less than 0.01%. And Goldman is, you know, doing stuff for that money; it is taking on principal risk to do trades, it is writing and hedging complex derivatives, it is using its own balance sheet to finance client activities, it is underwriting and advising on initial public offerings. Coinbase is mostly just a computer platform where people can trade crypto among themselves.

source: Money Stuff: Good and Exciting Times for Banks - Bloomberg

I asked myself the same question but I was thinking about Swissquote $SQN now that they provide access to the crypto market.

I got thinking about this. If the supply of BTC is finite how would our annual salary review look? Would we have annual pay cuts (get paid less BTC every year?)

BTC is not the single crypto available. Until 1970 the dollar was exchangeable for gold, somehow the World managed to function. But I think yes, if the velocity of money circulation did not change and we had technological improvements, we would see deflation of consumer goods prices. Regarding salaries, if the same amount of money was paid Worldwide to all people in total and the number of people didn’t change, then we should not see a general deflation of wages, only fluctuation between professions.

XX century was special, because not only did we see huge population growth, but also jobs started moving to developing countries, so there was a lot of pressure on western salaries through globalization and demographic boom.

Makes me think: what in your opinion would be the most logical / beneficial / practical thing to peg a crypto currency to? annual economic output of the entire World? Price of some basket of goods? Average salary? Mind you that whatever you choose, it should be future-proof and still make sense in 50 years. Or should we just define a fixed supply of the currency and let supply and demand set the price?

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You don’t need crypto for this. People start to use some standardized and commonly accepted assets that can be used both as a mean for exchange, store of value and for consumption. Cigarettes, canned food, sugar, alcohol, petroleum, tea, rice, batteries. Happened many times in the history.

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(Continuing) Average daily nutritional supply?

But currencies were debased regularly (and gold standard is blamed for having made the great depression worse).

And I read that the great depression was caused and prolonged by the new deal and keynesian policies. So the exact opposite of what you’re saying. I guess everybody is entitled to believe in their own fairy tale.

The ultimate roots of the Great Depression were growing in the hearts and minds of the American people. It is true, they abhorred the painful symptoms of the great dilemma. But the large majority favored and voted for the very policies that made the disaster inevitable: inflation and credit expansion, protective tariffs, labor laws that raised wages and farm laws that raised prices, ever higher taxes on the rich and distribution of their wealth. The seeds for the Great Depression were sown by scholars and teachers during the 1920s and earlier when social and economic ideologies that were hostile toward our traditional order of private property and individual enterprise conquered our colleges and universities.

Man, it was written in 1969, but it reads like it was written today. And it seems to me that many forum members want a replay.

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