How closely is Coinbase’s price tied to Bitcoin’s?

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Coinbase began its journey by assisting consumers in purchasing Bitcoin. After 8 years, the firm has gone public with a value of more than $100 billion. Currently, the firm has about $223 billion on the exchange, with the same trading rates totalling $335 billion for the year.

Having said that, many sceptics have raised concerns about the company’s next step and what the development entails for the remainder of the sector. Is this, for example, the peak of the cryptocurrency market? This is an important issue, particularly given that Coinbase’s leading cryptocurrencies reached price highs both before and after the company went public with a blockbuster direct listing on the Nasdaq.

Coinbase Co-founder Fred Ehrsam was quick to cater to the queries in a recent interview hosted by CNBC. According to the exec,

“The cryptocurrency market has not yet reached its apex, even if trading in various digital coins remains choppy going forward.”

In response to critics stating that the market has reached its peak, Ehrsam said, “As someone who has been working in crypto for 10 years, I’ve heard that statement hundreds, if not thousands, of times.”

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The interview also mentioned a potential connection between Coinbase’s valuation and Bitcoin’s valuation. In reality, Coinbase CEO Brian Armstrong was asked a similar question in another CNBC interview. Understandably, all founding participants had almost identical responses.

“There’s a lot more going on in the crypto-space. Our main aim is to make the entire crypto easy to assess for all of our users. Talking about the correlation, I’d say it’s less correlated to any singular asset but instead the crypto overall.”

For a long time, Coinbase has been synonymous with Bitcoin and other cryptocurrency properties. Fundamentally, the rise in the price of Bitcoin could benefit Coinbase as well. According to the company’s sales cycle, Coinbase’s revenue cycle as an exchange clearly may not depend solely on Bitcoin rising in value. When people purchase and sell intangible properties on the website, the firm collects fees and commissions.

When asked about the company’s future plans, the Co-founder said,

“I think the reality is that if crypto is to achieve the huge mission that I think it can — which is being a new global digital money, financial system, and internet app platform — there is bound to be a lot of volatility along the way. It’s certainly not for the faint of heart in the early days, and that was a huge challenge in building Coinbase and staying the course.”

Many critics have long questioned the cryptocurrency rally’s long-term viability. According to a new Bank of America Fund Manager Survey, about 74% of respondents believe Bitcoin is in a bubble. Indeed, Federal Reserve Chairman Jerome Powell said that cryptocurrencies are “truly vehicles for speculation.”

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