Emilie Choi explains what Wall Street doesn’t understand about Coinbase
Show notes
2021 was a watershed year for crypto exchange Coinbase. In addition to becoming the biggest cryptocurrency company to tap the public markets via a direct listing, the firm grew its total assets-on-platform to more than $255 billion, hired more than 3,000 people, and clocked in quarterly revenues above $1 billion during both the second and third quarters. Still, the company’s stock price has slid since its market debut in April, down by more than 31% since its first day of trading. The bearish sentiment is likely tied to the lack of predictability in Coinbase’s revenues, which are volatile and heavily dependent on trading fees. During the latest episode of The Scoop, Coinbase president Emilie Choi said that Wall Street is focused too much on the predictability of short-term revenue rather than the much broader gameplan the company has for becoming a foundation for the emerging crypto-economy. “We have obviously our flagship brokerage, and then we have the exchange and those are reinventing what a financial system can mean,” she said. “And then the final part of this strategy is about crypto as a new form of App Store, and there’s so much to tap into there.” That shift could help diversify its revenue model, she added. “We have largely a trading model that generates a ton of revenue for us, and we love that model and we’re totally OK with the volatility of it. And at the same time, we’re investing very heavily in the subscription and services model, and you’re seeing a lot of growth from that because it’s the thing that helps us control our own destiny.” To that end, Choi said the firm plans to pour more resources into its Coinbase Wallet. It is also expanding its subscription businesses — like Coinbase Cloud — as a means to grow its non-transaction-based revenue. ....For more visit theblockcrypto.com/podcasts Episode 1 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and President & COO Emilie Choi of Coinbase. Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com. This episode is brought to you by our sponsors Fireblocks, Kraken & Chainalysis Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com. About Kraken Whether you’re an experienced crypto trader or just starting out, Kraken has the tools to help you achieve financial freedom. With 50+ cryptocurrencies to choose from, industry-leading security and a wide variety of features to suit any investing strategy, Kraken puts the power in your hands to buy, sell and trade digital assets. Visit Kraken.com to get started today. About Chainalysis Chainalysis is the blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Our data powers investigation, compliance, and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases and grow consumer access to cryptocurrency safely. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.
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