Coinbase Inc., one of the biggest cryptocurrency exchange platform in the U.S., is reportedly projecting revenue for the year of nearly $1.3 billion, according to a Bloomberg report from October 30, 2018.
Billion Dollar Revenue Despite Crypto’s Massive Slump
Although the cumulative value of all major cryptocurrencies has tumbled by more than 70 percent during 2018, the most significant digital asset exchange in the U.S. is having its best year yet.
In October 2018, Coinbase raised money at a valuation of $8 billion, a number that places it among the ranks of the world’s most valuable startups, which is more than five times higher than it was at the beginning of 2017.
According to Bloomberg, 2016 saw Coinbase incur a net loss of USD 16 million with a revenue of only USD 17 million. In 2017, however, the company managed to record a USD 380 million profit. If the trend continues, the exchange will be looking at around a whopping USD 456 million for this year.
“The companies interested in investing in us know that this is the next wave of tech innovation,” said Asiff Hirji, Coinbase’s chief operating officer. “This was an opportunistic round. We didn’t have to go out and raise capital.”
Ambitious Goal in Uncertain Industry
However, Hirji wouldn’t comment on the specific revenue figures, but he did say that Coinbase is a bet on the future of crypto and that if the value of Bitcoin and other cryptocurrencies declines, sales will too. At the end of the first half of 2018, the document obtained by Bloomberg showed the exchange had $503 million in cash in the bank.
And while the document did not detail the projected revenue for 2019, targeting more than $400 million in profit will be a very ambitious goal for a six-year-old startup in an industry plagued by volatility. Data collected by fintech-focused venture firm Tribe Capital has shown that the number of U.S. users trading on the Coinbase platform has fallen roughly 80 percent since the peak in late 2017 and early 2018.
Owing to the price dips in the market, the platform has been aiming to diversify and is currently conversing with Tiger Global about a funding deal that could well exceed $500 million. The company has already added products that would attract larger institutional clients, including custodial services where investors can store large amounts of digital currencies, as well as enhanced trading capabilities, such as risk management and margin trading, which allows customers to use borrowed money.
While this product has been slow to take off, Coinbase has been telling investors that it expects to have 40 clients with more than $1 billion under custody within the first half of November.