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Emilie Choi explains what Wall Street doesn’t understand about Coinbase

Emilie Choi explains what Wall Street doesn’t understand about Coinbase
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episode 1 The fourth season of The Scoop was remotely taped with The Block’s Frank Chaparro and Coinbase’s President and COO Emilie Choi.

Listen below, and subscribe to The Scoop on An appleAnd spotifyAnd google podcastAnd Stitcher Or wherever you listen to podcasts. Email feedback and review requests to [email protected]

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Chainalysis
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2021 was a watershed year for crypto exchange Coinbase.

In addition to becoming the largest cryptocurrency company to tap into the public markets through direct listing, the company has increased its total assets on the platform to over $255 billion, employed more than 3,000 people, and recorded quarterly revenues in excess of $1 billion during both. The second and third quarter.

However, the company’s stock price has fallen since it first appeared on the market in April, down more than 31% since the first day of trading. The downside is likely related to the unpredictability of Coinbase’s revenue, which is volatile and highly dependent on trading fees.

During a recent episode of The Scoop, Emily Choi, president of Coinbase, said that Wall Street is putting too much emphasis on short-term revenue predictability rather than the company’s broader game plan to become the basis for the emerging crypto economy.

“Obviously we have our leading brokerage, and then we have the stock exchange and these are reinventing what the financial system can mean,” she said. “Then the final part of this strategy relates to cryptocurrency as a new form of the App Store, and there is a lot to take advantage of.”

She added that this shift could help diversify its revenue model.

“We pretty much have a trading model that generates a lot of revenue for us, and we love that model and we’re totally fine with its volatility. At the same time, we’re investing heavily in the subscription model and services, and you’re seeing a lot of growth from that because it’s the thing that helps us control in our destiny.”

To that end, Choi said the company plans to pour more resources into the Coinbase Wallet. It is also expanding its subscription business – such as Coinbase Cloud – as a way to grow its non-transaction-based revenue.

As such, it may not make sense for the exchange to be compared by financial analysts to exchanges like Nasdaq or brokerages like Interactive Brokers – at least not from Choi’s point of view. However, it is not easy for her to say exactly how investors should think about Coinbase – a fact that stems from the maturity level of crypto and web 3.

Here’s Choi (the focus is ours):

Is it a car company? And was Amazon like a book company? Was Square a purely financial services company? No, but with what you’re looking at in the past with Square, something like Square, that was IIt took Wall Street companies a lot of time to figure out that it’s just a whole new breed of something.

If the former CEO of LinkedIn M&A had her clients, the analysts would introduce Coinbase into an entirely new category of Web 3.

“We are our own thing,” she said.

In this episode, also discuss Choi and Frank Chaparro from The Block:

  • Why does Choi spend so much time on LinkedIn
  • Coinbase’s Three Game Plan to Become the Foundation of Web Economy 3
  • The Inside Story Behind How Coinbase Persuaded One of the World’s Largest Hedge Funds to Invest in Series E During the “Crypto Winter”
  • How Coinbase Ventures was conceived
  • Why is Choi ‘too optimistic’ about the US regulatory landscape
  • Coinbase culture and why the company is giving employees four weeks off to recharge

© 2021 The Block Crypto, Inc. all rights are save. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.

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