The CEO, Brian Armstrong, expects that Coinbase Can Face Price compression in the Long Run. He believes that other streams of revenue can take leads in the next ten or five years. Brian Armstrong has today viewed the transaction fees of the platform as the firm’s list of shares on Nasdaq.
Armstrong Discussed Concerns Linked with Coinbase’s Huge Returns from Transaction Fees
On Wednesday, 14th April, Coinbase CEO discussed the concerns linked with Coinbase’s huge returns emanating from the transaction fees in a CNBC interview. About 96 per cent of Coinbase 2020 total revenue was accumulated from the transaction costs charged to the customers. When enquired about the possible impact of higher competition on transaction price on Coinbase, Armstrong responded that the platform might witness some price reduction in the long run.
For Armstrong, they have not still witnessed margin compressions and won’t expect to view it shortly and in the midterm. I don’t believe there can be price compression in other assets in the long term. The Coinbase CEO added that a huge crypto part transaction costs emanate from custody costs baked already in the transaction price.
Coinbase To Channel Focus to Other Revenue Streams
Armstrong maintained that Coinbase anticipates channelling its concentration to other series of revenue streams using products such as staking, debit card, educational programme Coinbase Earns, and the custody business of institutional users. He also stated that they began to invest in some revenue streams, beginning to offer the revenue green shoots. They are offering more constant predictable channels of revenue. In 10 or five years, we would witness about 50 per cent or more revenues.
It is vital to add that Coinbase Pro, a Coinbase professional Platform, has finished a prominent costs structure update in 2019, improving some maker costs in 233 per cent high. After the update, Coinbase generated $1.1 billion in straight revenue in 2020, a major increment of $482 million in late 2019.