Coinbase recently reported to investors that it made $1 Billion in revenue through 2017. An independent assessment finds that 43% of that was in December alone.
Bitcoin Run Responsible for 43% of 2017 Profit
The San Franciso based exchange Coinbase was one of the first interfaces to make Bitcoin accessible to the masses using credit cards and bank exchanges.
Credited with bringing cryptocurrency transactions out of the shadows by putting a public face to Bitcoin exchanges and raising investment capital from Silicone Valley, Coinbase was initially expecting a 600 million profit for 2017 but the bull run in the final weeks of the year nearly doubled that estimate.
Analysis of the year’s profits provided by Superfly Insights was measured using receipts from 25,000 users.
Coinbase makes it’s money from transaction fees so it makes sense that during the fury of trading that went on from about Thanksgiving through to New Years the exchange would have seen much higher profits. According to the New York Times, Coinbase was receiving eight times as much traffic in December as it was in June.
Coinbase Adapts Model for 2018
It won’t be possible to match those numbers in 2018 unless there is another surge in cryptocurrency trading. Which many pundits predict there will be, with some calling for a bull market to re-emerge around March and continue through the summer gaining momentum until the end of the year.
“There is no reason why we couldn’t see bitcoin pushing $50,000 by December,”
Thomas Glucksmann, head of marketing at cryptocurrency exchange Gatecoin, told CNBC earlier this month.
Another factor that may cut into 2018 profits for Coinbase is a new breed of competition. Many new exchanges emerged during 2017 but the new generation like Robinhood are promising no fee transactions.
Coinbase is looking to counter this competition with a new merchant platform Coinbase Commerce which will enable vendors to accept virtual currencies. This would generate profit from participating merchants while encouraging the growth of cryptocurrency use, garnering fees from those transactions as well.
This Holy Grail of the digital currency world though is a high hurdle to leap. “Most merchants are not that interested in the (relatively small) number of BTC or ETH holders.” Said Jonathon Meiri CEO of Superfly Insights.
In regards to tax issues the company has been dealing with for several years they sent out a notification to users Feburary 23 on the support page of their website. The notification is an update on the ongoing IRS demand that Coinbase turn over records concerning 500,000 users of their exchange. The entire notification here.
The post Coinbase Reports Almost Half its Profit Came in December Alone appeared first on NewsBTC.
Coinbase Reports Almost Half its Profit Came in December Alone