The markets are currently falling, and those recently into crypto could be concerned. Crypto exchange Coinbase certainly isn’t worried. In fact, the company is laughing all the way to the bank. The US-based Bitcoin broker cleared over a billion dollars in revenue last year, smashing predictions.
The six year old firm was only expected to make $600 million as of September last year, according to tech website Recode. However, it exceeded that by over 40%, breaking a billion bucks by the end of 2017. Known for some of the highest fees in crypto land, Coinbase operates fiat trading in 39 countries with crypto only branches in many more.
Stock Resale Forbidden
The company has done so well that it has sent a memo to stock holders warning them about selling their shares in the company. A number of shareholders have been approached by venture capitalists and private brokers, asking them if they would sell some of their CB stock. Coinbase was not amused and, it seems, has treated its shareholders the same as it does its customers:
As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market. We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so.
Investors want a slice of that pie, but Coinbase already raised $100 million before the crypto craze took off in mid-2017. This means that they’ll have to wait at least another year to see if the company will raise another round of funding.
Disgruntled Customers
Coinbase is popular because it makes buying and selling Bitcoin easy. It does not make profit from the price of Bitcoin but acts as a broker as well as an exchange. This means it charges both the buyer and the seller transfer fees, usually between 0.25% and 1%. It also charges as much as 4% to deposit fiat using a debit card and additional fees for bank verifications in certain countries where it must bank outside of them.
Customers have taken to social media in droves, complaining about the company’s extortionate fees and commissions, yet they still use it. Customer support is practically non-existent with support ticket responses taking up to six weeks, if they respond at all. On top of all that, the exchange will simply close its doors if trading volume is too high for its servers to handle.
Failings aside, 13 million accounts have been registered on Coinbase, which seems to have become the central bank of decentralized currencies. A billion dollars in 2017 could be dwarfed this year if crypto mania continues and it adds more altcoins. Just remember the firm has forbidden stock sales!
Will Coinbase continue to grow in 2018, and do you use it? Add your thoughts in the comments below.
Images courtesy of Pixabay and Bitcoinist archives.
