Coinbase, Road To Trillion Dollar Market Capitalization?
In just several hours, U.S. stock exchange Nasdaq will be welcoming to its newest family member Coinbase, Inc. The company, which is the largest crypto platform in the U.S, is attracting both retail and institutional investors globally. Coinbase is estimated to have at least $50 billion market cap with the given reference price of $250.
As a crypto enthusiast and wallet user since the early days of Coinbase (where I got a lot of credit cards reward points from buying crypto on the platform with my Chase CREDIT card. Yes, you could do that back then), It’s like watching my baby grows up and receives an admission letter from Harvard.
tl;dr, I do believe Coinbase is a worthy long-term investment and eventually it will hit trillion dollar market cap. It does take time and here are some of the key milestones I envision they need to achieve before that.
Native Token
One great advantage of crypto startups is the utilization and monetization of the token. Unlike traditional startup funding, crypto teams can raise operation capital from the general public and trade or swap them with other tokens at its infancy. The people who purchase the token at this stage either believe the future valuation of the company or the token itself is a good utility token and they will use the company service in the future with this token as payment.
BNB is a native token for the Binance platform. We can use it to trade in token pairs, participate in BNB only staking/programs, and send/receive payments. Compare to other stable coins or fiat money, BNB has lower transaction fees. With these advantages, Binance users began to store and operate with BNB. At the time of the writing, BNB is the top 10 cryptos and has $90 billion market cap.
Coinbase native token, which is currently being developed by the team according to S-1 filing, will be the center of attention as there will be many practical use cases for it just like BNB. Not only crypto traders will speculate the token of the largest U.S. crypto company, Coinbase users will be paying less fees and getting faster transaction speed with this token.
Fostering Innovation
Think about Apple. They’ve created a developer friendly platform for engineers to build apps on their eco-system. As a result, there are more high-quality apps in the Apple App store compare to Google Play store. Look at where Apple is at today.
Any company with emphasize on innovation will be rewarded in a long-term. For Coinbase’s case, they will receive continuous attention and retain high engagement rate if there are more tokens like Doge on their platform. So far, the company is on the right track. CEO Brian Armstrong is constantly educating people how to Setting Up and Scaling a Crypto Company.
Educational Content
If you are not familiar with Coinbase Earn, it’s a reward system where you spend 5–10 minutes to learn about a new coin and figure out the right answer to the quizzes related to that coin. The reward ranges between $5-$30 in token value. For me and many friends I’ve referred Coinbase to, their original rewards from this program easily 10x — 20x in half a year just by sitting there. This simple trick got so many people into the crypto space. Who doesn’t want free money right?
For the long term, the company should maintain and expand on such strategy: increasing the content depth, setting up a certificate program, and adding language supports. Another success case is LinkedIn, LinkedIn learn program has brought so much positive impacts on this professional networking website.
Exchange
This will be the most profitable and most challenging project to complete for the company. Can you image the day Coinbase becomes the Nasdaq of crypto? (Yes, Nasdaq is a company, it’s not owned by the government). Although the technical challenge is simple to solve, the hardship is most likely coming from the SEC. Binance U.S. is a completely different product than the Binance international as it only has less than 20% of the features enabled on the America version. Crypto regulation amendments pace are always behind the development speed of blockchain technology. Regulators are even more cautious about an asset that is decentralized.
However, given the proactive relationships between Coinbase and the regulators and increasing popularity of crypto, it is not hard to predict that two parties will eventually smooth out the legal structures and Coinbase will see significant increases in its profit in the coming years.
