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The Coinbase list is the call of some bitcoin believers

The Coinbase list is the call of some bitcoin believers


For all true bitcoin believers who survived the 2017-2020 winter crypto, with the property intact, the Coinbase digital currency exchange service list must have felt a vindication.

Don’t just do it A list of $ 75.9 billion They mark the largest revenue in the history of Nasdaq cryptography, many would say without a doubt that it established digital currency as a force to be reckoned with on Wall Street. For crypto-promoters around the world, in a simpler way, it marked the day that they finally proved right.

“It feels like a change of legitimacy not only for Coinbase but for the industry as a whole. Crypto has advocated for being a major force in the financial world,” said Coinbase CEO Brian Armstrong.

The group’s valuation came as a result of a star set of first-quarter earnings. The group had revenue of $ 1.8 billion over the period last year compared to $ 191 million. He earned a net income of $ 800 million. That, the street said, was worth comparing to the New York-based parent company ICE, which has a valuation of about $ 67 billion.

For more objective analysis, this is not a correct comparison. Yes, ICE had revenue of $ 1.6 billion in the first quarter of 2020, located on the same Coinbase front. But ICE is a very different beast from the Coinbase Wall Street establishment.

Coinbase is very sensitive to the super-volatile ratings of cryptography. The strong performance of the bull market in the first quarter of 2021, when bitcoin rose above $ 60,000, should be contrasted with Coinbase’s net loss of $ 30 million in 2019, with bitcoin averaging about $ 5,000 to $ 6,000 a year.

As it stands, Coinbase is also regulated and authorized within the U.S. Legislative Money Services Business framework, not as a so-called primary exchange or brokerage for services such as trade credits. This gives Coinbase a big advantage over larger regulations like ICE or CME.

If that were to change, there could be major consequences. If regulated as an exchange, its ability to generate profits from the main brokerage, non-purchasing brokerage, and main trading would be severely curtailed. If supervised as a principal agent or bank, the capital burden would increase significantly.

While the IPO may validate its importance as a speculative cryptocurrency activity, the irony is that the so-called maximalist bitcoin platform is also an exempt sale. They believe it has set aside the true principles of the golden goose crypt offered by Wall Street. It is a correct argument.

Bitcoin entered the market with the promise of “trusted” banking, cheaper payments, privacy and, most importantly, an end to people’s dependence on financial intermediaries. Both when it comes to Wall Street and when they accept regulations, especially when it comes to accepting rules from your customers and money laundering, Coinbase has not only left the role of challenging the state-controlled conventional currency system, but also the privacy of cryptocurrency transactions planned by the inventor. Satoshi Nakamoto.

It has been fascinating to see the transmutation of another operator through the group’s mediator. It’s unclear whether 56 million users of the platform understand or care that Coinbase IOUs don’t have coins, or that most transactions on the platform aren’t even resolved through public blockchains.

The IPO comes at a time when Nakamoto’s original approach to the challenge is being approached in other ways. Former CIA deputy director Michael Morrell was officially released last week accepted the bitcoin network, arguing that “blockchain analysis is a very effective tool in the fight against crime and gathering intelligence”. It was also the week when the famous libertarian Peter Thiel warned that China was a state of mass surveillance ambitions for high digital currency, was using bitcoin as a financial weapon against the US.

If that indicates anything, the state, not the crypto, has won the day in terms of control of the financial system. Instead of celebrating Coinbase’s list, those who believed that cryptography would end public dependence on central banks or financiers should deplore it. All indicators mean that cryptocurrencies have played less of a role as liberators and more as a honey pot designed to attract users to greater care and not less.

izabella.kaminska@ft.com



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