Coinbase: The assets of the crypto exchange remains bound to volatile Bitcoin
Coinbase: The assets of the crypto exchange remains bound to volatile Bitcoin
Coinbase caused a lot of sensation in February with his Super Bowl TV commercial. The advertising spot entitled "Less Talk, More Bitcoin" contained a bouncing QR code that offered new users Bitcoin worth 15 USD for free.
The crypto exchange noted in the USA could talk less and tolerate more Bitcoin trade. Rising interest rates have meant that investors have withdrawn from risky assets. A smaller user base and a lower trading volume led to a decline in sales of 27 percent in the first quarter, which put the company into the red figures. Coinbase warned that the trading volume will go back in the current quarter.
bad enough, but then Coinbase whined. An attempt by his founder and CEO Brian Armstrong to clarify a new SEC open duty, only alerted the market. The Coinbase share price collapsed by more than one fifth on Wednesday. Its market evaluation - which was more than $ 76 billion in November - has shrunk to $ 12.5 billion.
In a submission, Coinbase pointed out that in the event of bankruptcy all the crypto assets in his depot-at the end of March worth $ 256 billion-could be the subject of insolvency proceedings. Since its users can be regarded as unsecured creditors, in the worst case they could lose all of their crypto-assets parked at Coinbase.
This update follows new guidelines of the SEC, which require crypto exchanges to treat the cryptocurrency of all users they have kept as liabilities in their balance sheets.
With $ 6.1 billion in payment methods and payment-means equivalents, Coinbase seems to be full with cash. Nevertheless, armstrongs claim Twitter That the stock exchange had "no bankruptcy risk" emphasized only a large weakness of the Coinbase business. While bank accounts in the USA are equipped with a deposit guarantee offered by the Federal Deposit Insurance Corporation, crypto exchanges do not offer the same safety net.
The income of Coinbase depends heavily on the trading fees. The efforts to diversify the sources of income will take some time. A new marketplace for non -fungible tokens is created, just when this market is also slowing down. The fortunes of Coinbase will continue to swirl around with volatile cryptocurrencies.
Source: Financial Times