The cryptocurrency market is still in a bear market from its highs earlier this year, but cryptocurrency-based businesses are still thriving, such as Coinbase.
The popular cryptocurrency exchange that is often labeled as being the on-boarding location for many first-time cryptocurrency users just recently closed its Series E funding for $300 million USD, which places its total valuation at $8 billion USD. This valuation ranks it in the top tiers of many tech startups and even above the market cap of Bitcoin Cash or Litecoin. Coinbase said in their medium post that they plan to use the funds for global expansion, offering more assets, utility applications for crypto such as stable coins, and bringing institutions into crypto.
This announcement comes as Coinbase also projected revenue of $1.3 billion USD for 2018 with a profit of $456 million USD. This is a dramatic increase from a revenue of $17 million USD in 2016 with a net loss of $16 million USD. Coinbase makes money both off of trading fees as well as exchange price increases. Coinbase also said that they plan to have 40 clients with more than $1 billion USD under custody integrated into the Coinbase custody service within the coming weeks. This profitability is also replicated by Coinbase’s peers, such as Binance projecting $1 billion USD in profit in 2018 and Bitmain on target for $10 billion USD in revenue. However, President and COO of Coinbase, Asiff Hirji, highlighted how he wants Coinbase to have an impact on cryptocurrencies beyond only exchange prices.
“For this round, we simply weren’t interested in taking investments from firms that didn’t have a constructive view of crypto. This round, and the future of crypto in general, needs to be about more than asset prices.”
Interest remains in future prospects of cryptocurrencies
Cryptocurrencies had experienced significant and easy adoption boosts when the exchange prices were rapidly rising since many thought they could make quick money. However, both exchange prices and user numbers have since decreased; some estimate that Coinbase’s user numbers have declined by as much as 80% from their highs. Some reports also indicate that this has affected the amount of money that Coinbase could raise, but the significant funding and valuation still indicates that numerous investors, whom have done their due diligence have confidence in the future of the crypto industry. The decline in exchange prices and users is an indication that speculative value has decreased significantly, which reveals that a larger percentage of the remaining interest and money in cryptocurrency is focused on actual use cases and more realistic returns.
Stablecoins have also seen significant adoption recently as more individuals attempt to add stability and liquidity to the cryptocurrency markets. There have also been rising popularity of utility based coins like Coinbase briefly mentioned; another example would be Binance Coin, which is now a top 15 coin on coinmarketcap. Binance Coin allows holders to not only pay fees on the Binance exchange, but to also receive increased referral rewards. These coins are an attempt to provide immediate usability to consumers rather than solely speculative value, such as increased stability rather than increasing exchange prices in a very volatile industry.
Dash provides usability through multiple channels
Despite the bear market, Dash has still been focusing on developing its code and increasing both merchant and consumer adoption. Dash Venezuela, Dash Merchant, and other Venezuelan groups now have around 2,200 merchants and Dash Help has seen an 80% uptick in requests. Dash is providing real usability for Venezuelans because of its wide acceptance and extremely cheap and near instant transactions, which is a major improvement over the bolivar. Then in first world nations, Dash also plays a role as liquidity provider on many exchanges and is beginning to enter the remittance service sector and cannabis industry since other coins struggle to match Dash’s transaction speed, inexpensiveness, and security. These features plus the 4,000 Dash accepting merchants around the world allows Dash to create network effects of wider adoption, which mitigates the need to ever cash out of Dash.
Dash allows individuals to use it as peer-to-peer, decentralized, digital currency for everyday purchases, which has demonstrated its value during bear markets when much of the speculative value has faded away and more definitive usability value is all that is left.