Coinbase Global, Inc. (COIN): History, Ownership, Mission, How It Works & Makes Money

Ever wondered how Coinbase Global, Inc. (COIN), a key player in the cryptocurrency world, actually operates and generates revenue? With the crypto market's year-end capitalization surging by 98% in 2024 to $3.4 trillion, and Coinbase's revenue more than doubling to $6.6 billion, how has this leading U.S.-based cryptocurrency exchange positioned itself in such a dynamic landscape?

Dive in to explore the history of this company, from its founding in 2012 to becoming a publicly-traded entity, and understand who owns it. This article will address the mission of this company, and explore the mechanisms through which it operates and secures its financial success.

Ready to discover how this company is increasing economic freedom for over 108 million users and managing over $400 billion in assets?

Coinbase Global, Inc. (COIN) History

Coinbase Founding Timeline

Year established

Coinbase was established in 2012.

Original location

The company was originally located in San Francisco, California.

Founding team members

The founding team members were Brian Armstrong and Fred Ehrsam.

Initial capital/funding

Coinbase's initial funding came from a variety of sources, including a $150,000 seed round from Y Combinator in 2012. Subsequently, in 2013, the company secured a $5 million Series A funding round led by Union Square Ventures.

Coinbase's Evolution Milestones

Coinbase's Transformative Moments

• Early Focus on Compliance: From its early days, the company prioritized regulatory compliance, setting it apart from many other cryptocurrency exchanges. This proactive approach helped build trust with regulators and paved the way for future growth.
• Addition of Ether (ETH): Adding support for Ether in 2016 was a pivotal moment. As the Ethereum network and its native cryptocurrency gained traction, this decision allowed the company to capture a significant portion of the growing market.
• Direct Listing on Nasdaq: The decision to go public via direct listing in 2021 was a bold move. Unlike a traditional IPO, a direct listing allowed existing shareholders to sell their shares directly to the public without the need for underwriters. This event legitimized the cryptocurrency industry in the eyes of many investors.
• Acquisition Strategy: Strategic acquisitions, such as the purchase of Xapo’s institutional custody business in 2019, have allowed the company to expand its service offerings and cater to a broader range of customers, including institutional investors.
• Navigating Regulatory Landscape: The company has actively engaged with regulators around the world to shape the future of cryptocurrency regulation. This proactive approach has helped the company navigate complex and evolving regulatory requirements, positioning it as a leader in the industry.

For more insights into the company's financial standing, check out: Breaking Down Coinbase Global, Inc. (COIN) Financial Health: Key Insights for Investors

Coinbase Global, Inc. (COIN) Ownership Structure

Understanding Coinbase's ownership structure reveals who has significant influence over the company's decisions and strategic direction. The company's shares are publicly traded, but a substantial portion is held by institutional investors, mutual funds, and company insiders.

Coinbase's Current Status

Coinbase Global, Inc. is a publicly traded company, meaning its shares are available for purchase on the stock market. It is listed on the Nasdaq under the ticker symbol COIN.

Coinbase's Ownership Breakdown

The ownership of Coinbase is distributed among various types of shareholders. Here's a breakdown:

Coinbase's Leadership

Coinbase's leadership team guides the company's strategic direction and operations. Key figures include:

• Brian Armstrong: Co-Founder and Chief Executive Officer
• Alesia Haas: Chief Financial Officer
• Emilie Choi: President and Chief Operating Officer

For more insights into Coinbase investors, check out: Exploring Coinbase Global, Inc. (COIN) Investor Profile: Who’s Buying and Why?

Coinbase Global, Inc. (COIN) Mission and Values

Coinbase aims to increase economic freedom in the world by building an open financial system. This involves creating accessible cryptocurrency infrastructure and enabling global digital asset transactions, while upholding values like transparency, trust, and innovation.

Core Purpose

Official mission statement

The mission statement of Coinbase Global, Inc. (COIN) is: to increase economic freedom in the world through a cryptoeconomic platform.

• Coinbase aims to empower individuals to control their financial future by providing a secure and user-friendly platform for buying, selling, and storing cryptocurrencies.
• The company is committed to security and compliance, prioritizing the safety of users' funds and personal information. In 2024, Coinbase maintained a robust security infrastructure with $255 million in digital asset protection insurance.
• Coinbase believes that open protocols for money will foster innovation, economic freedom, and equal opportunities, similar to the Internet's impact on publishing information.

Vision statement

Coinbase's vision statement is to empower people to participate in the global economy.

• Coinbase envisions a future where cryptocurrencies are widely accepted and used for everyday transactions, making financial services more accessible globally.
• The company strives to be at the forefront of the digital revolution through innovation and collaboration, driving positive change and fostering financial freedom.
• In 2024, Coinbase committed $500 million for blockchain and Web3 technological development, demonstrating its focus on technology and innovation.

Company slogan/tagline

Coinbase has used different taglines throughout its history. Earlier slogans include:

• 'Welcome to the Future of Money' (circa 2013)
• 'Buy and Sell Digital Currency' (circa 2017)

For more information, you can visit: Mission Statement, Vision, & Core Values of Coinbase Global, Inc. (COIN).

Coinbase Global, Inc. (COIN) How It Works

Coinbase operates as a cryptocurrency exchange platform, providing a suite of products and services that facilitate the buying, selling, and storage of various digital assets. It primarily serves retail investors and institutions looking to participate in the cryptocurrency market.

Coinbase's Product/Service Portfolio

Coinbase's Operational Framework

Coinbase's operational framework revolves around providing a secure and regulated platform for cryptocurrency transactions and related services. Key aspects of its operations include:

• User Acquisition and Onboarding: Coinbase focuses on attracting new users through marketing initiatives, referral programs, and educational content. The onboarding process involves identity verification (KYC) and account setup.
• Trading Platform Operation: Coinbase operates its trading platforms (Retail, Pro, Prime) by matching buy and sell orders from users. It uses a combination of in-house technology and partnerships with market makers to ensure liquidity and efficient trade execution.
• Custody and Security: A significant part of Coinbase's operations involves securely storing and managing users' cryptocurrency assets. Coinbase employs various security measures, including cold storage, multi-factor authentication, and insurance coverage.
• Regulatory Compliance: Coinbase operates in a highly regulated environment and invests heavily in compliance programs to meet the requirements of various jurisdictions. This includes anti-money laundering (AML) measures, KYC procedures, and regulatory reporting.
• Technology Infrastructure: Coinbase relies on a robust technology infrastructure to support its trading platforms, custody solutions, and other services. This includes servers, networks, databases, and software applications.
• Customer Support: Coinbase provides customer support through various channels, including email, chat, and phone. It also offers educational resources and FAQs to help users navigate the platform and understand cryptocurrencies.

Coinbase's Strategic Advantages

Coinbase's success and market position are underpinned by several strategic advantages:

• Brand Recognition and Trust: Coinbase has established itself as a well-known and trusted brand in the cryptocurrency industry. This reputation helps attract new users and retain existing ones.
• Regulatory Compliance: Coinbase's proactive approach to regulatory compliance gives it a competitive edge over less compliant competitors. It allows Coinbase to operate in more jurisdictions and build trust with institutional clients.
• User-Friendly Platform: Coinbase's retail platform is known for its user-friendly interface, making it easy for beginners to buy and sell cryptocurrencies. This lowers the barrier to entry for new users and drives adoption.
• Comprehensive Product Suite: Coinbase offers a wide range of products and services, catering to different segments of the cryptocurrency market. This allows Coinbase to capture more value from its user base and diversify its revenue streams.
• Strong Technology Infrastructure: Coinbase's robust technology infrastructure ensures the reliability, scalability, and security of its platform. This is essential for handling high trading volumes and protecting user assets.
• Strategic Partnerships: Coinbase has formed strategic partnerships with various companies, including payment processors, financial institutions, and technology providers. These partnerships expand Coinbase's reach and enhance its service offerings.

To gain more insights into the core principles that guide Coinbase, you might find this resource valuable: Mission Statement, Vision, & Core Values of Coinbase Global, Inc. (COIN).

Coinbase Global, Inc. (COIN) How It Makes Money

The company primarily generates revenue through transaction fees from cryptocurrency trading, along with subscription and services offerings.

Coinbase's Revenue Breakdown

Coinbase's Business Economics

The company's business economics are influenced by several key factors:

• Cryptocurrency Volatility: Fluctuations in cryptocurrency prices can significantly impact trading volumes and, consequently, transaction revenue. Higher volatility often leads to increased trading activity, benefiting the company.
• Transaction Fees: The company charges fees on transactions, which vary depending on factors such as the size of the transaction, the payment method used, and market conditions. These fees are a primary driver of revenue.
• Subscription Services: Revenue is also generated from subscription services like Coinbase One, which offers benefits such as zero-fee trading and enhanced customer support.
• Custodial Services: Providing secure storage for digital assets generates revenue, particularly from institutional clients.
• Staking Rewards: Allowing users to stake their crypto and earn rewards, with the company taking a commission on those rewards, adds to the revenue streams.
• Interest Income: Holding customer's fiat currency and earning interest on those holdings contributes to the overall financial performance.

Coinbase's Financial Performance

Key aspects of the company's financial performance include:

• In 2024, the company demonstrated a strong recovery, driven by increased crypto prices and trading volumes.
• For the year 2024, total revenue increased to $3.1 billion, up from $3.1 billion in 2023.
• Subscription and services revenue grew significantly, reaching $1.4 billion for the year 2024, compared to $802 million in 2023.
• The company reported a net income of $95 million for the year 2024, a substantial improvement from a net loss of $2.6 billion in 2023.
• Adjusted EBITDA was $966 million for the year 2024, compared to negative $1.2 billion for the year 2023.

To gain more insights into who is investing in the company and their motivations, check out: Exploring Coinbase Global, Inc. (COIN) Investor Profile: Who’s Buying and Why?

Coinbase Global, Inc. (COIN) Market Position & Future Outlook

Coinbase is a prominent player in the cryptocurrency exchange market, with its future hinging on its ability to navigate regulatory landscapes and capitalize on the evolving digital asset space. The company's performance is closely tied to the broader trends in cryptocurrency adoption and market volatility.

Competitive Landscape

Opportunities & Challenges

Industry Position

Coinbase holds a significant position in the cryptocurrency exchange industry, recognized for its focus on compliance and user experience.

• Coinbase's commitment to regulatory compliance has allowed it to operate in several key markets, giving it a competitive edge over less compliant exchanges.
• The company's user-friendly platform attracts both novice and experienced cryptocurrency traders.
• Coinbase is actively investing in new technologies and services to stay ahead of the curve in the rapidly evolving digital asset space.

For more information on Coinbase's financial health, check out: Breaking Down Coinbase Global, Inc. (COIN) Financial Health: Key Insights for Investors