By Josiah Wilmoth
Bitcoin exchange and brokerage firm Coinbase brought in more than $1 billion in 2017, shattering its revenue forecast and leaving prospective investors clamoring to purchase shares on the secondary market.
Coinbase Raked in $1 Billion in Revenue Last Year
The company, which launched six years ago and was the first cryptocurrency startup to achieve a $1 billion valuation, shattered its 2017 revenue forecast of $600 million by 67 percent, according to a report from tech outlet Recode.
This achievement was accomplished in large part due to the cryptocurrency market’s fourth-quarter melt-up that carried the bitcoin price as high as $19,891 in mid-December.
Citing industry sources, Recode said that Coinbase had issued the $600 million forecast on September 30, shortly before retail investors began to pile in the market at such a rapid clip that the company’s iPhone app briefly became the most popular free app in the App Store. Coinbase’s brokerage platform now has more than 13 million accounts, which makes its user base larger than that of Charles Schwab.
The sources told the publication that Coinbase — which also operates a professional cryptocurrency exchange and intends to launch a custodial storage service for institutional investors this year — is likely now worth double the $1.6 billion valuation it received last August following a $100 million funding round.
This rapid increase — a feat nearly as impressive as that of the bitcoin price itself — has reportedly left hedge funds and other investors clamoring to purchase shares of the burgeoning firm, but some company insiders doubt if the firm will raise any more funds before it goes public at an undisclosed point in the future.
Coinbase Taps Heavy Hitters to Fill Executive Roles
Of course, the expansion has not been entirely smooth. Like many cryptocurrency exchanges, Coinbase has struggled to avoid traffic-driven outages during periods of intense volatility. Moreover, the company has had trouble onboarding new customer support specialists quickly enough to meet swelling user demand, including many users who are largely unfamiliar with basic cryptocurrency functionality.
To address these issues, Coinbase has recently hired several heavy-hitting executives. In December, the company hired Asiff Hirji — a former executive at Andreessen Horowitz and TD Ameritrade — to serve as Coinbase’s president and chief operating officer. Just this week, the firm announced that Tina Bhatnagar, formerly of Twitter, would join Coinbase as vice president of operations and technology.
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