It’s no secret that Coinbase is one of the hottest startUPS in Silicon Valley. The digital currency exchange, which is also one of the most well-funded bitcoin startUPS, has been on a tear lately.
In the past year, Coinbase has added more than two million new users, bringing its total to six million. The company has also been aggressively expanding its business, adding new features and services such as a brokerage service for buying and selling digital currencies, a wallet for storing them, and a merchant platform for businesses to accept payments in bitcoins.
All of this growth has not been without its challenges. The most notable challenge has been dealing with the volatile price of bitcoin, which has fluctuated wildly in recent months.
Despite this volatility, Coinbase has managed to stay profitable and is now one of the most valuable startUPS in the world, with a valuation of $1.6 billion.
Given all of this success, you might think that Coinbase is undervalued at $1.
After all, the company is growing rapidly, is profitable, and has built up a large user base. However, there are a few factors that suggest that Coinbase may be valued appropriately.
First, it’s important to note that Coinbase is not yet a profitable company. While it did generate $1 billion in revenue in 2017, it also lost $130 million during the same period.
That means that the company’s current valuation is based largely on future potential rather than actual results.
Second, Coinbase faces stiff competition from other digital currency exchanges such as Bitstamp and Gemini. These companies are also growing rapidly and are attracting large numbers of users.
As the digital currency market matures, it’s likely that there will be consolidation among exchanges, which could put pressure on Coinbase’s valuation.
Finally, it’s worth noting that the digital currency market is still in its early stages and is subject to significant regulatory uncertainty. This could hamper Coinbase’s growth prospects and make it difficult for the company to achieve its full potential value.
So while Coinbase may be a hot startup with a lot of potential, there are also some risks that investors should be aware of before investing in the company.