If Coinbase would have invested its seed money into Bitcoin, it would have made $2B profit which would be higher than the $800 million profit it attained in Q1. It would have made that kind of profit if it would have made the investment in 2013.
Coinbase, the biggest crypto exchange is a leap higher than many crypto businesses even with the best strategies.
2013 Hodlers get the most profits
Coinbase reported that it lost out most of its profits to investors who were hodling their funds from 2013. Just before its initial public offering on April 14, Coinbase confirmed that its Q1 performance outshined the 2020 one as it got revenues of $1.8 billion.
This spurred a lot of attention as many investors were curious on the how the IPO will impact the company as history detects that IPOs lead to sell offs.
Even though it has a high performance, it would have been better if it concentrated more on Bitcoin from its seed funding. The exchange received a seed funding of $30 million back in 2013 would be currently an equivalent of $2 billion if converted to BTC. It would make more sense if the money was held in BTC as opposed to dollars. According to a Cointelegraph report, the compound annual growth rate was 200% while the BTC/USD rate has grown by over 43,000%. Since its entire history, Coinbase has a lifetime profit of approximately between $780 million and $1.3 billion. The much-anticipated IPO is happening in a few days and the profit is already high, what if the IPO happens?
BTC on the light
BTC is so much on light and attracting many investors. Contrary to expectation, Coinbase’s success is not tied to Bitcoin. Coinbase has always invested a modest amount of money on Bitcoin. From its records with BTC, Coinbase has about 4,500 BTC.
MicroStrategy has focused on BTC and has bough up o 91,000 since its entry mid last year. So far it has received double profits.
According to crypto exchange company ShapeShift founder Eik Voorhees, as much as MicroStrategy has come in with a lot of gist, its relevance cannot be compared to Coinbase. Coinbase has been in the loop for a long time and has Coinbase a bigger contribution to the ecosystem.
From the current trend, there is a spike in the Bitcoin outflows meaning that Bitcoin supply is going down due to a rise in demand. That, however, does not mean that the market has reached its peak as people are not willing to sell their BTC yet.