Coinbase Could have Made $2B Simply buying Bitcoin with its Own Seed money

The greatest cryptocurrency’s 200% CAGR poses a significant challenge to the most prosperous crypto business plans.
The United States’ largest crypto exchange could have left more money simply by purchasing and holding Bitcoin (BTC) from 2013.  Data circulating on social media shows that despite Coinbase’s $800-million earnings in Q1, the business would still be richer had it used its own seed funding cash to purchase BTC.Coinbase gains lose out to 2013 hodlersAhead of its initial public offering on April 14, Coinbase reported non-refundable earnings this week. The numbers became an instant talking stage as marketplace participants weigh up the probable effect of the IPO launch. Other IPOs, including the new Deliveroo sale, sparked sell-offs. Amid sky-high valuations and the related buzz, but it seems that all Coinbase needed to perform in order to outperform was to purchase Bitcoin.Specifically, the exchange’s $30-million seed financing in 2013 will be worth up to $2 billion needed it had been converted into BTC at the time.By contrast, Coinbase’s lifetime earnings total so far have been estimated to be somewhere between $780 million and $1.3 billion.BTC/USD 1-month candle chart (Bitstamp). Source: Tradingview”Coinbase is going to list publicly in less than 10 days and reported blowout numbers today (~800m in gain on 1.8B on revenue),” programmer Vijay Boyapati commented. “Sounds great, but imagine how much more they’d be worth if they’d held their gains in #Bitcoin rather than dollars for the previous 8 decades.” As Cointelegraph reported, Bitcoin’s compound annual growth rate has topped 200%, and because April 2013, BTC/USD is upward over 43,000percent .Bitcoin supply deficit stays realBoyapati was touching on another, more controversial part of Coinbase’s business model to return to light that season. For all its success, executives’ve chosen to hold a fairly modest amount of BTC.According to its recent filing with U.S. authorities, the exchange possesses 4,486 BTC. By contrast, as Boyapati notes, newcomer MicroStrategy, despite not being an exchange, has purchased in excess of 91,000 BTC as August a year — a stash which has climbed in U.S. dollar terms for the business so far.  “It is almost as if Coinbase does not even believe in the market in which they are among the largest players. Sad,” he added.Not everyone was convinced. Erik Voorhees, creator of crypto exchange support ShapeShift, contended that Coinbase’s participation into the cryptocurrency phenomenon made it incomparable to MicroStrategy. “Imagine holding MicroStrategy in higher respect than Coinbase. The latter struggled for eight years to create the very successful Bitcoin business on the planet, serving 50 million people,” he responded to some tweet by Casa co-founder Jameson Lopp.  “The former discovered Bitcoin at 2020 and purchased a group… out of Coinbase.” Bitcoin exchange inflows vs. BTC/USD. Source: Ki Young Ju/ TwitterMeanwhile, data on Wednesday revealed a marked spike in trade outflows this week, a indication that long-term hodling and overall interest in purchasing Bitcoin is growing quickly. “Are we at the industry cycle high? No,” Ki Young Ju, CEO of on-chain analytics agency CryptoQuant, which published the data, commented, highlighting the gap between the current climate and conventional Bitcoin cycle shirts. “When the economy reaches its peak, everyone deposits BTC to exchanges to market.” Coinbase Pro, the professional trading arm of Coinbase, saw 12,000 BTC leave in one transaction.

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