Industry Overview
The worldwide cryptocurrency market size is anticipated to arrive at USD 1,758.0 million by 2027, displaying a CAGR of 11.2% during the estimated time frame. Cryptocurrency is a system of virtual currency exchange that is aimed to eliminate financial intermediaries. The developing tendency of people in created nations towards virtual cash trade strategies will immensely affect the market during the gauge time frame. The market size stood at USD 754.0 million in 2021.
With advanced technological developments, virtual currency exchange methods have been invented and evolved rapidly in the past few years. Virtual currencies were initially limited for demonstrable transactions in social and gaming economies. In the last decades, the developed the concept of virtual currencies emerged as cryptocurrencies. The cryptocurrencies were aimed to eliminate financial intermediaries by direct peer-to-peer transactions. Most of the developing countries like the U.S., Germany, China, and the U.K. have started adopting cryptocurrencies as an exchanging medium. The terms used for the digital currency varies from country to country, such as payment token (Switzerland), digital currency (Thailand, Australia, and, Argentina), crypto token (Germany), virtual commodity (Taiwan, China, and Canada), virtual asset (Honduras and Mexico), cyber currency (Italy and Lebanon), and electronic currency (Colombia and Lebanon).
The increasing popularity of digital assets like Bitcoin and Litecoin is likely to drive market growth in the forthcoming years. Moreover, digital currency is also often utilized with the integration of blockchain technology to attain decentralization and controlled efficient transactions. Blockchain technology offers decentralized, fast, transparent, secure, and reliable transactions. With these advantages of blockchain and cryptocurrency, companies are investing and collaborating with other companies to deliver efficient and quality services to the users. For instance, in October 2018, Qtum Chain Foundation based in Singapore partnered with Amazon Web Services (AWS) China to deploy blockchain systems on the AWS cloud. This collaboration was aimed to help AWS users to use Amazon Machine Images (AMI) to develop and publish smart contracts easily and efficiently.
Segmentation
Based on components, the market bifurcates into software and hardware. Based on type, the market is classified into Ether, Ether Classic, Bitcoin, Ripple, Litecoin, etc. On the basis of its end-user, the market segments into e-commerce and retail, remittance, trading, and peer-to-peer payment. Geographically, the market is categorized into North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa.
Market Driver
Rising Popularity of Digital Currency to Augment Growth
The rising pattern of cryptocurrency has prompted the acknowledgment of computerized coins like Bitcoins, Litecoins, Ethers, and the sky’s the limit from there. The simple and adaptable conditional strategy offered by cryptographic money has encouraged the Central Bank Digital Currency (CBDC) movement arrangements across the world. For example, the Bank of Thailand and the Central Bank of Uruguay have applied for the tool stash to its CBDC assessment measure. The toolbox conveys a guide for the nations to gain ground rapidly and break down CBDC as a trade medium.
Moreover, the expanding interest in blockchain and cryptographic money by significant organizations will empower the rapid development of the market. For example, in October 2021, Qtum Chain Foundation, a publicly released blockchain application stage situated in Singapore reported an association with Amazon Web Services (AWS) China to convey blockchain frameworks on the AWS cloud. The organization will permit help AWS clients to utilize Amazon Machine Images (AMI) to create and distribute shrewd agreements effectively and productively.
Likewise, the presentation of exceptional advanced monetary standards by prominent organizations will impact the market decidedly soon. For example, in June 2021, Facebook, Inc. declared the dispatch of advanced money named Libra. Libra will empower clients to purchase things or send cash to other people and money out Libra on the web or at basic food item shops.
Regional Insights
Existential Players to Promote Growth in North America
The market in North America remained at USD 250.9 million out of 2021 and is anticipated to multiply in the approaching years. The development in the district is credited to the rising fame of bitcoins in the US. The presence of major famous players will cultivate development in the locale during the conjecture time frame. The Asia Pacific is required to observe critical development during the figure time frame attributable to the innovative turns of events and acknowledgment of virtual money in Japan. The developing joint efforts among central members will fundamentally support the digital money market development in the Asia Pacific. For example, in January 2021, Z Corporation, Inc. also, TaoTao, Inc. declared a joint endeavor with the monetary help office to grow its essence by affirming administrative consistency in the Japanese market.
Competitive Landscape
Acquisitions and New Product Launches to Intensify Market Growth
The global market consists of several key players operating at regional and global levels. These giants focus on enhancing their platforms by acquisitions, partnerships, and expanding their digital infrastructures. For instance, Binance.com introduced the ‘binance cloud’ to offer digital asset exchange with security and liquidity in February 2019.
Industry Developments
- April 2020: Bitcoin.com announced a partnership with the Bit Mining company to expand its services across Japan.
- November 2019: Binance.com acquired WazirX. The acquisition has enabled the adoption and production of new financial technologies to simplify access to cryptocurrency.
COVID-19 Impact on The Market
Coronavirus has plummeted the growth of the financial market across the globe, including the cryptocurrency market. The level of stability in the digital currency landscape has considerably diminished. The market is attracting investments despite the uncertainty prevailing in the digital currency industry. Digital currencies like Ethereum, Bitcoin, etc., have witnessed inflation in prices despite the pandemic. Firms across several nations have paused their mining operations due to the pandemic. Some countries like Russia have delayed the deployment of cryptocurrency laws due to the pandemic.
Raging Coronavirus to Sway Market Potential
The outbreak of COVID-19 has negatively impacted the global economy. The regression in the stock market has directly created concerns for bitcoins. For instance, 12 March 2021, the price of Bitcoin fell below USD 4,000 after a sharp decline in the S&P Index in the U.S. The market crash has incited an increase in investment capital by blockchain companies to compensate for the losses. Giant blockchain analytics, Elliptic, Chainalysis, and CipherTrace declared that they have cut-price and reduced staffs or intend to do so in the immediate future to lessen the economic effects of the coronavirus pandemic. For instance, CipherTrace has decreased the jobs of the advertising and marketing departments. Whereas Elliptic has eliminated 30% of the workers in the U.S. and the U.K and Chainalysis has planned to reduce employees’ wages by 10% to mitigate the risks.
Key Players in the Global Cryptocurrency Market are
- Coinbase (U.S.)
- BitGo Inc. (U.S.)
- Binance, com (Malta)
- Bitfury Group Limited (The Netherlands)
- Coindesk.com (U.S.)
- Intel Corporation (U.S.)
- Ripple Labs Inc. (U.S.)
- Xilinx (U.S.)
- Bitmain Technologies Ltd. (Saint Bitts LLC) (China)
Company Overview
Coinbase Global, Inc. was founded in 2012, it provides financial infrastructure and technology for the crypto economy. It offers the primary financial account in the crypto economy for retail users; a marketplace with a pool of liquidity for transacting in crypto assets for institutions; and technology and services that enable ecosystem partners to build crypto-based applications and securely accept crypto assets as payment. In May 2020, the Company became a remote-first company. Accordingly, the Company does not maintain a headquarters; Employs ~2,176.
Coinbase platform enables approximately 43 million retail users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries to participate in the crypto economy
- Retail users: Offers the primary financial account for the crypto economy – a safe, trusted, and easy-to-use platform to invest, store, spend, earn, and use crypto assets.
- Institutions: Provide hedge funds, money managers, and corporations a one-stop-shop for accessing crypto markets through advanced trading and custody technology, built on top of a robust security infrastructure. Further, the company offers a state-of-the-art marketplace with a deep pool of liquidity for transacting in crypto assets.
- Ecosystem Partners: Provides developers, merchants, and asset issuers a platform with technology and services that enables them to build applications that leverage crypto protocols, actively participate in crypto networks, and securely accept cryptocurrencies as payment.
Key Management
- Brian Armstrong, Chairman & CEO
- Co-Founder of the company has been its CEO and Director since May 2012 and its Chairman since February 2021.
- Previously worked with Universitytutor.com where he served as the founder and CEO. Further, he has worked with Airbnb as a software engineer. Also, has worked as a consultant for the enterprise risk management division at Deloitte & Touche LLP.
- Holds a B.A. in Computer Science and Economics and an M.S. in Computer Science from Rice University.
- Emilie Choi, President & COO
- Joined the company in 2018 as VP of Business, Data, and International. Currently serves as a COO since June 2019 and President since November 2020.
- Previously worked with LinkedIn where she served as the VP and Head of Corporate Development. Further, she has served in various positions at Warne Bros. Entertainment Inc.
- Holds an MBA from Wharton School at the University of Pennsylvania and a BA in Economics from Johns Hopkins University.
- Alesia J. Haas, CFO
- Joined the company in 2018 as CFO
- Previously worked with Sculptor Capital Management Inc where she served as the CFO from December 2016 to April 2018. Further, she has served in various positions at OneWest Bank. She currently serves as a member of the board of directors of AGNI Homeservices Inc.
- Holds a B.S. in Business Administration from California Polytechnic State University, San Luis Obispo.
Historical and Forecast Performance
Revenue by Geography
Stock Price Chart
Public Ownership Summary
Acquisitions:
- On February 8, 2021, the company completed the acquisition of the remaining unknown stake in Bison Trails Co. for approximately $450 mm.
- On April 29, 2021, the company announced agreed to acquire Skew Ltd for £20.4 mm.
- On July 31, 2020, the company completed the acquisition of Tagomi Holdings, Inc. for approximately $41.8 mm.
Broker Commentary
“We rate coinbase Overweight. We see Coinbase as both a leading driver and beneficiary of the cryptocurrency economy. We see numerous opportunities for it to grow and expand its footprint in the crypto-economy to grow its userbase and to expand its service to the crypto-economy marketplace. We see both organic and inorganic opportunities.” – JP Morgan report dated 11th Aug 2021.
“We believe coinbase will continue to generate significant revenue growth at least in the near-term through the combination of growing active users, cross-selling and increasing Average Revenue per User (ARPU) and exploiting abundant international opportunities. However, we see limited visibility on financial results and expect revenue to remain highly concentrated in crypto trading. Other risks include a complex regulatory environment and competition/pricing.” – Bank of America Merrill Lynch dated 13th Aug 2021.
Sources
- Company website
- Capital IQ
- Thompson One
- www.fortunebusinessinsights.com
- www.globenewswire.com
- Generic Google Search
Disclaimer
We have no present or planned future interest in Coinbase this report is prepared for knowledge. We do not encourage/promote anyone to buy/sell the stocks for Coinbase.