With the crypto market in decline since November of last year, Coinbase has not fared well either. However, the company doesn’t believe it should be as far down as it is this year, and is doubling down on its crypto holdings, ready for a new bullish cycle.
Since the beginning of the year, the Coinbase price dipped even further than the cryptocurrency average, suffering a 30% decline compared with crypto’s average of 20%.
In an article on The News & Observer, Coinbase CFO, Alesia Haas, suggests that her company should not be so correlated to the crypto market ups and downs, and that diversification should negate this more into the future.
“We’ve also observed that our stock has been highly correlated with crypto prices, which are down roughly 20% year-to-date. We honestly don’t truly understand this, as this correlation does not take into account the growth in our market share… the diversification of our business beyond investing, and let alone the future potential of our business as we expand into new assets and new product streams,”
This diversification has become much more significant now according to Haas:
“Our emerging revenue stream, which we call our subscription as a services revenues, became more significant. We generated more than $500 million of subscription and services revenues this year including $214 million in the fourth quarter,”
The launch of the Coinbase NFT platform is another area where the company is looking to see larger growth as the potential market for non-fungible tokens is enormous.
Despite the diversification, Coinbase’s core business is of course crypto, and to that end the company has purchased a further $350 in crypto over the last weeks, to add to the $500 million that it bought over the summer of 2021.
Brian Armstrong, the CEO of Coinbase, tweeted out his company’s plan at the time, to keep investing 10% of all profits into crypto.
Coinbase is no doubt looking to profit from its findings, that one in four US households has invested into cryptocurrencies. In 2021, trading volumes increased 8 and a half times in comparison to those of 2020.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
