Sometimes when business is good, it’s too good.
Coinbase is one of the most recognizable crypto brands with a popular app. You know what that means? It will likely be acquired by Facebook in 2022. To get to that point though Coinbase will go IPO first.
Meanwhile, it’s optimizing its work-force after convincing the world it’s worth $8 billion, somehow.
Insiders otherwise known as unidentified sources as of Friday, Oct. 26 are saying at least 15 people will be losing their jobs. With the likes of Binance, Robinhood, Fidelity and Bakkt rising Coinbase will be in tough to keep growing at the same pace.
“People here are pretty upset about it, and so far senior leadership is handling communications poorly,” one source told Yahoo.
Let’s not forget the context here. Coinbase was brutally stretched to capacity by market demand and even faced considerable backlash after that breakthrough influx of users in the area of customer success.
A host of technical and customer support problems ensured forcing them to hire aggressively. As a result, executives pledged to significantly expand the number of staff available to service customer complaints. The firing spree shows maybe some of the demand has run dry.
Coinbase has or had around 500 employees as of September, half of whom had begun in 2018. Impressive or a case of growing too fast? Coinbase wants to go IPO and that means a Coinbase exit could be on the horizon sooner than later.
There won’t be that many big winners in the big push of digital assets. Bitmain is one. Binance is another. Coinbase could be one of them, but the payout to sell to someone like Facebook will be too lucrative for its executives to resist. These aren’t people like Binance who have a long-term vision to truly own the space for decades or pioneer things like global DEX.
Coinbase is gambling with time, Bitcoin hype and Silicon valley games of timing. Coinbase has now reached 25 million users, with 600,000 actively trading on the platform. Those aren’t number that would make you assume it could be worth $8 billion. Functionally Coinbase is the poor Millennial’s channel to investing in crypto.
The problem is Coinbase isn’t as Millennial centric as Robinhood. Coinbase had $90 million in revenue last quarter, with expectations to earn $450 million in the last quarter of 2018, but companies like Facebook are watching. Facebook has a history of not of innovating, but instead, of acquiring popular apps with potential.
Coinbase is cutting some of its workforce. There’s little indication they are doing it in the right way, due to the employee backlash. Just another Silicon Valley company trying disband its remote team of customer support service, towards centralization. Most blockchain companies do not care about decentralization. In the race to monetize digital assets, supporting decentralization of work and services is not necessarily a priority. LinkedIn lists over 770 employees at Coinbase, while officially its closer to 550.
As Coinbase has most probably already decided to go the route of an IPO, it’s taking a more traditional approach to crypto. The Coinbase transaction fee to purchase USDC is 3.99%, with a minimum transaction fee of $0.99. That’s not exactly the kind of app anyone would recommend to their friends.