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Bankless
195 - The Bull Case for $COIN | Michael Rinko & Jay
Nov 6, 2023
Michael Rinko, a research analyst at Delphi Digital, joins independent researcher Jay to delve into Coinbase's intriguing business model. They discuss the company's evolution from reliance on trading fees to diversifying revenue streams like staking and USDC. The pair highlight Coinbase's strategic offshore expansion to navigate regulatory challenges, and its role as a custodian for Bitcoin ETFs. With $COIN's value plummeting, they explore the implications of market dynamics, institutional lending, and innovative approaches shaping Coinbase's future.
01:43:48
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Quick takeaways
- Coinbase has successfully diversified its revenue streams away from just trading fees, generating income from various sources including interest income from USDC holdings and staking revenue from Ethereum.
- Coinbase's focus on diversifying its revenue streams positions it well for future growth, appealing to a wide range of users with its trusted brand, regulatory compliance, and secure custody services.
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Coinbase's Diversified Revenue Streams
Coinbase has successfully diversified its revenue streams away from just trading fees. They now generate income from various sources, including interest income from USDC holdings and staking revenue from Ethereum. The interest income comes from minting USDC and investing the corresponding fiat in short-term treasuries. Coinbase charges users a fee for providing access to staking services, which has seen significant growth. The potential for offshore derivatives trading is another avenue for revenue expansion for Coinbase. This market is substantial, with interest in offshore perp exchanges growing. Coinbase aims to capture a share of this market alongside other major players like Binance. With its reputation for compliance and secure custody, Coinbase appeals to both retail and institutional traders. As it expands internationally, Coinbase's revenue streams diversify further, providing opportunities for sustained growth.
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