The Best Fintech Scale-Up Ever

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31 October 2018
John Dwyer

$8 billion Valuation

The price of Bitcoin has plunged this year and some alt-coins have fallen off a cliff.

However, that has not stopped Coinbase closing a new $300mn round of funding to “accelerate the adoption of cryptocurrencies and digital assets”.

Coinbase will use the funding to accelerate the following strategic areas:

- Global expansion: building the infrastructure between fiat and crypto;
- Offering more crypto assets more quickly;
- Utility applications for crypto;
- Bringing institutions to crypto.

The valuation was at $8bn and represents a material increase on the prior valuation of $1.6bn back in 2017.

Two-Sided Market Place

In September, Coinbase announced a new asset listing process with the goal of rapidly listing all assets that meet their standards and are jurisdictionally compliant.

They are making it easier for issuers to demonstrate their own compliance with the goal of accelerating listing announcements.

Liquidity begets liquidity in exchanges and this will attract investors, deliver future profitability, and create network effects for Coinbase.

Earlier this year, Coinbase announced its support for the Ethereum ERC-20 standard which remains the go-to standard for developers in the ecosystem.

It also has been rapidly building out its institutional custody offering—a key area of competition in this phase of market growth for digital assets.

Flawless Execution

The valuation uplift is due to Coinbase’s flawless strategic execution.

It is fast becoming the best crypto platform attracting issuers, retail, and institutional investors.

In a prior blog, we highlighted the strategic importance of open-source as evidenced by IBM’s acquisition of Red Hat.

We speculated on how long it will be before a new digital asset entrant buys a legacy financial institution.

Coinbase is implementing the best scale-up of a fintech ever and is positioning itself to be the Goldman Sachs of crypto.

If it continues this flawless execution it won’t need a legacy financial institution—but it may catalyse strategic activity by envious competitors.

Insight details

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Geographic Focus
Asia-Pacific, EMEA, LATAM, North America