Coinbase announced new round of funding
Yesterday, Coinbase the most populous cryptocurrency exchange announced a new round of funding aimed at solving the crypto market issues.
So far 2018 was a very bad year for the crypto market. Despite the increase in the number of alt-coins, ICOs and adoption rate, the cryptocurrencies’ problems marked the year with a continuing downtrend. In result the price of Bitcoin and basically all of the alt-coins slumped with more than 80%. The legislative problems, utility problems, interoperability, eager investors, among many others were the main reasons for the whole downtrend so far. The San Francisco based cryptocurrency exchange and wallet provider announced a new round of funding which will tackle these issues.
The additional round of funding will be $300 million and will push the overall valuation of Coinbase to the staggering $8 billion. Their plan is to use the funds to accelerate the adoption of cryptocurrencies and all digital assets. The “Series E” equity round will be led by Tiger Global Management, a 16-year-old, New York-based hedge fund. Other members worth mentioning are Wellington Management, Andreesen Horowitz, Y Combinator Continuity and Polychain.
Along with the announcement Coinbase’s president and chief operating officer Asiff Hirji revealed his plans on using the funds:
Coinbase will use this financing to accelerate:
Global expansion–building the infrastructure between fiat and crypto in regulated markets around the world.
Offering more crypto assets, quickly — we see hundreds of cryptocurrencies that could be added to our platform today and we will lay the groundwork to support thousands in the future.
Utility applications for crypto — like the recently announced support for a stablecoin (USDC) on Coinbase and our continued development of Coinbase Wallet.
Bringing institutions into crypto — adding features and crypto assets to our Custody offering to bring more institutional funds into the space.
Coinbase is, and will remain, a crypto-first company…
New funding worth $300 million, so what?
We think this announcement brings another dose of positivism into the crypto market. It’s obvious that big capital is coming into the crypto space, but in contrast with the 2017 bull run, the money is not directly flooding the underlying assets. It feels that smart money are, once again, one step ahead of ordinary pajeets. For us, instead of investing into the assets, they are acquiring ownership of the ‘picks and shovels’ in this gold rush 2.0. Our best guess is that once all newly announced platforms and financial structures start operating, the focus will move once again on the underlying assets. Only this time, the big money will not only profit from the increasing value of the cryptocurrencies but from the trading and investing mechanism they’ve implemented.