Coinbase from YC to DPO • Hacker News Board

Re: Coinbase from YC to DPO

#581

Post by thebean11 » Wed, Apr 14, 2021, 10:01 PM UTC

enjo wrote: post #551

kneel wrote: post #403

Earlier quoted context omitted.

There is 20 trillion of negative yielding debt floating around in govt bonds, luckily we can hedge against these horribly mismanaged house of cards before they fall on us. The demand is real.

Bitcoin is worthless without dollars backing it. It’s because you can turn Bitcoin into dollars that anyone wants it.

You can make the same argument about any asset class. The path from Bitcoin/gold/real estate/crops to other goods or assets goes through dollars out of convenience (because your destination is purchasable in dollars). Don't confuse convenience with necessity.

Re: Coinbase from YC to DPO

#582

Post by smabie » Wed, Apr 14, 2021, 10:04 PM UTC

Animats wrote: post #577

Remember how cryptocurrencies were supposed to eliminate the need for intermediaries who added cost to transactions?

I mean, you can swap without a centralized exchange. In fact, for my PA account I would never use a CEX to swap coins.

Re: Coinbase from YC to DPO

#583

Post by FabHK » Wed, Apr 14, 2021, 10:04 PM UTC

throwaway4good wrote: post #368

aqme28 wrote: post #354

Earlier quoted context omitted.

It's not even nearly the biggest exchange! Binance trades 10x the volume, so if Coinbase is worth 1/10 of the crypto market, is Binance worth 1x the crypto market?

Yep. It seems crazy - if you take all the stock market brokers and exchanges and compare it to the full stock market, their value is only a tiny part. However for crypto exchanges ... well ... what is going on here?

One reason certainly is that Coinbase charges very high fees, namely around 0.6% of the traded amount. The other reason is that crypto is traded a lot. If 1/6 of the entire crypto market cap trades on Coinbase every quarter (and that seems to be the case), then Coinbase has earnings of 0.1% of the entire crypto market cap every quarter, or 0.4% per annum. Apply a 25 P/E ratio, and you get a value for Coinbase of 10% of the crypto market cap.

Re: Coinbase from YC to DPO

#584

Post by skybrian » Wed, Apr 14, 2021, 10:06 PM UTC

thebean11 wrote: post #559

llamataboot wrote: post #515

Compare Coinbase to say a major exchange like the NYSE. Realize that crypto is a space that could be damaged by gov intervention at any time. Realize that there is very little lock in effect on these markets, and fees are becoming less and less over time. How does Coinbase ever manage to justify a valuation this high? 100B.... Ping me when the stock price is under $100.

Coinbase does things that have no NYSE parallel, for example running a centralized ETH staking service (they keep 50% of the profits, which are 5+% of staked ETH so it's very high margin). Of course anybody can run a service like that, but Coinbase has the brand name and a leg up on compliance/legal so they'll get to charge a big premium on this stuff.

The ETH staking seems to be "coming soon?"

Re: Coinbase from YC to DPO

#585

Post by briefcomment » Wed, Apr 14, 2021, 10:06 PM UTC

rgifford wrote: post #385

The NYSEs parent company Intercontinental Exchange Inc (ICE) is worth 66.40B. Today's IPO puts Coinbase at 100B+. The NYSE has been in operation since 1817. Coinbase has been in operation since 2012. The value of all crypto is Trading fees in the crypto-world are getting more competitive as more established players support crypto. I don't see a defensible market position here, let alone established track record or st…

The value of all crypto is over 2T now

Re: Coinbase from YC to DPO

#586

Post by smabie » Wed, Apr 14, 2021, 10:06 PM UTC

paulpauper wrote: post #364

And down bitcoin goes. $3k off the highs. If given a choice between 1 million to invest in in a large cap growth stock portfolio vs. Bitcoin, I would choose the stock portfolio every time. Crypto too volatile relative to upside. Airbnb and other big tech growth stocks have much smoother returns which can be magnified with some leverage strategies.

BTC has a pretty amazing Sharpe ratio. If you want smooth returns, then reduce your allocation?

Re: Coinbase from YC to DPO

#587

Post by rednerrus » Wed, Apr 14, 2021, 10:07 PM UTC

josu wrote: post #569

llamataboot wrote: post #515

Compare Coinbase to say a major exchange like the NYSE. Realize that crypto is a space that could be damaged by gov intervention at any time. Realize that there is very little lock in effect on these markets, and fees are becoming less and less over time. How does Coinbase ever manage to justify a valuation this high? 100B.... Ping me when the stock price is under $100.

A few arguments to justify the valuation: - Government intervention tends to benefit incumbents. - Coinbase employs a lot of lawyers [1]. - Coinbase invests a lot in lobbying [2]. - While fees are lowering for international exchanges, those who serve US customers are still able to get away with very high fees. - People are less sensitive to fees when the assets they are buying are very volatile. - NYSE serves brokers…

Aren't very high fees antithetical to crypto, also centralization?

Re: Coinbase from YC to DPO

#588

Post by smabie » Wed, Apr 14, 2021, 10:08 PM UTC

throwawaybbqed wrote: post #51

I was an early user of coinbase. I only bought a fraction of a coin because of Paul Graham and YC's reputation. Well .. I was wrong. I was not an active trader. It seems they have closed by account and liquidated the btc within (if there were actually btc in my name). I am deeply disappointed that they don't have a telephone number I can call to help figure out the situation. Pretty disappointed.

I highly doubt this is true.

Re: Coinbase from YC to DPO

#589

Post by kirbypineapple » Wed, Apr 14, 2021, 10:08 PM UTC

rgifford wrote: post #385

The NYSEs parent company Intercontinental Exchange Inc (ICE) is worth 66.40B. Today's IPO puts Coinbase at 100B+. The NYSE has been in operation since 1817. Coinbase has been in operation since 2012. The value of all crypto is Trading fees in the crypto-world are getting more competitive as more established players support crypto. I don't see a defensible market position here, let alone established track record or st…

Bitcoin alone is worth over 1T, so your statement that all of crypto is worth less than 1T is a bit silly. The goal posts keep moving for crypto...next year it'll be that crypto is worth less than 5T, etc.

I looked at the NYSE daily volumes...unless I'm reading them wrong, they did $800m USD worth of trades today. Coinbase did $5b USD worth of trades today. So if you compare a company that's almost 200 years olds volume against a 9 year old company, and find that the startup is doing more than 5 times the volume of the incumbent (with zero lock in, since clients are free to trade cryptos on any exchange), then I'd say your comparison is actually a ringing endorsement for Coinbase.

Re: Coinbase from YC to DPO

#590

Post by tootie » Wed, Apr 14, 2021, 10:09 PM UTC

dogman144 wrote: post #532

tootie wrote: post #320

Earlier quoted context omitted.

It still makes no sense to me. It makes sense in the sense that if people believe in it it becomes real. But I don't get why people believe in it. And frankly I'm still pretty skeptical that it's being floated by more than money laundering.

From something I wrote above, this was my ah-ha moment: Not all cryptos are like this, but for bitcoin and other ones that have the incentives right: bitcoin's massive breakthrough is a protocol that can send verifiably discrete entities across a network, without a central party needing to verify the discrete-ness. This is a huge breakthrough in a lot of ways, but basically consider if you network could send payments…

The only distinction between crypto and just HTTPS is the distributed concept. Something that I don't really think is valuable and neither do most consumers. Crypto exchanges get robbed more often than banks. The notion of investing in "http" is akin to investing in "blockchain" which isn't a thing. Anyone who saw the value of the internet would have been buying Apple, Google and Amazon because they were providing goods and services. Not tokens. I'm heavily invested in reddit karma, but it's still not fungible.