Bankless 195 - The Bull Case for $COIN | Michael Rinko & Jay
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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.
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Coinbase Diversification
- Coinbase successfully diversified revenue streams beyond trading fees.
- This makes their earnings more predictable, resembling a traditional bank.
Revenue Quality
- Not all revenue is equal; trading fees are cyclical and volatile, while interest income is stickier.
- Diversification into interest income makes Coinbase more resilient to bear markets.
USDC Yield Generation
- Coinbase profits from USDC by investing user deposits in short-term treasuries.
- This generates yield, making USDC a key revenue driver for Coinbase.