As the cryptocurrency mania continues to take hold, it appears that the owners of the exchanges that carry out the daily trades are laughing all the way to the bank. Case in point is San Francisco-based exchange Coinbase, which is now reportedly valued at a staggering $8 billion. That’s a jump of over $6 billion from the $1.7 billion valuation it reported less than a year ago—an incredible increase that demonstrates the power of the crypto boom in late 2017.
The increase in Coinbase’s valuation was revealed during its bid to acquire cryptocurrency networking platform Earn.com. The Earn.com acquisition was worth more than $100 million, and according to a Recode report, the San Francisco startup valued itself at about $8 billion when it offered an equity package to the founders and shareholders of Earn.com. Since the company is not publicly traded, the estimation of $8 billion is a self-made one although it is certainly believable.
However, the valuation of Coinbase at these incredible levels is not only an internal assumption. According to Recode, brokers have been negotiating Coinbase stock at a price that should place the value of the exchange at between $4 and $6 billion. Although that’s a slightly more conservative estimate, it still represents a huge leap in Coinbase’s valuation from less than a year ago.
This increase in valuations has largely been down to the huge boom in cryptocurrency trading over the past few months, although prices are still way back from the all-time highs registered in December. Interestingly, the current value of NASDAQ, which operates the U.S. tech exchange as well as another eight European stock exchanges, has a value of around $15 billion.
This means that Coinbase alone is worth more than half of NASDAQ in just a few months and the numbers can only continue to grow as interest in crypto currencies and Bitcoin continues to increase exponentially. This valuation by VC investors is not new since Binance—the world’s largest cryptocurrency exchange—has also seen its valuation soar incredibly over the past months. Binance is not even a year old and has increased its turnover to around $1.7 billion a day by offering a huge slew of cryptocurrencies and trading pairs.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
San Francisco-based cryptocurrency exchange Coinbase has not been resting on its laurels of late, and has announced the acquisition of Earn.com in a $120 million deal on Tuesday.
The terms of the acquisition were not disclosed, but it appears that those investors who funded Earn.com over the years will be going away with quite a handsome return on their original investment, according to Tech Crunch. In fact, there had already been reports that Coinbase would be paying in excess of $120 million for Earn.com although these rumours were never actually confirmed.
Earn.com, formerly known as 21 Inc., started off as a cryptocurrency mining startup but after limited success, it branched out into a cryptocurrency networking platform where users could accumulate SegWit-Coin BTC (also referred to as Bitcoin legacy or Core) by simply answering emails and completing other spurious tasks. Although that may seem slightly pyramid-like and Ponzi in its origins, those who stuck it out when SegWit-Coin BTC was just a few dollars have undoubtedly struck it rich now with the price hovering at around $8,000.
Earn.com is also developing its own coin on an ERC20 platform, which it is touting instead of SegWit-Coin BTC. This is intriguing as Coinbase has recently announced that it will be adding support to the ERC20 token to its array of products. Still, Earn.com recently announced that it would not be going ahead with the launch of the ERC20 token just yet since it needs to have more time to integrate with Coinbase’s structure—quite a logical decision.
Following the acquisition, Coinbase hired former Earn.com CEO Balaji Srinivasan, who will take up the coveted position of Chief Technology Officer—a major scoop for Coinbase. Srinivasan was previously a partner at Andreessen Horowitz and brings a wealth of experience to the whole operation.
Incidentally, Coinbase has recently announced a deal with Cipher Browser, which it purchased in full. This is a mobile Ethereum wallet which allows users to access applications which are decentralized. Coinbase also launched a new Venture Capital Fund called Coinbase Ventures, which provides startups with up to $15 million in early seed financing. It seems that the U.S. cryptocurrency exchange is pretty busy all in all and is looking bullish for the future.
Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper. Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.