801–810 of 883 posts
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Obviously both of those possibilities are priced in. Investors aren't stupid, Gamestop notwithstanding.
> Investors aren't stupid I think it's pretty clear by now that they are. We just hope that the stupidity on the buy and sell sides more or less balances out, and what's left to determine the price is people with some real insight.
This is pretty amazing. Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10 It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.
Airbnb market cap is at 105 billion and Coinbase is currently at 86. Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.
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Compare it to Visa. $475B market cap. I mean it’s not really like any of these things, the comparisons are totally arbitrary.
Comps are a fundamental part of establishing fair valuation. Comparing Coinbase to the NYSE doesn't seem arbitrary to me. How likely do you think it is Coinbase becomes a household name like Visa, really? How many retailers process payments per day with Coinbase? How long did it take Visa to build its network? How consistent is Coinbase usership? I don't see Coinbase having a future in payment processing. Not unless…
Fun trivia: Brian Armstrong was looking for a co-founder on HN back in 2012: https://news.ycombinator.com/item?id=3754664
I wonder if he's kicking himself now for not taking the job.
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.
Fun trivia: Brian Armstrong was looking for a co-founder on HN back in 2012: https://news.ycombinator.com/item?id=3754664
Ah the good old days, when people talked about Bitcoin solving too high credit card fees. It’s now $15+ per transaction in fees but it’s now a store of value so it doesn’t matter!
I would argue though that the magic of Crypto isn't buying coffees. After Silkroad we have seen very little interest in using Crypto as money, and even with "high" fees, alternatives have not become desirable for their ability to transact cheaply. I would also point out that even the likes of Coinbase have a 0.5% fee before spreads. Using crypto over cash or card (at least in Europe) isn't a cheaper of faster process end to end.
IMHO Bitcoin IS an offshore account, and the ability to move wealth anywhere in the world, without a middle man, entirely permission-less and trust-less for even at $15 is a massive achievement. Don't get me wrong, it can be cheaper, but what Bitcoin can do, and how individuals from retail investors to publicly listed companies are holding Bitcoin its a massive signal in terms of whats actually desired.
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I spoke to him on the phone within a few hours of that post, as I had already prototyped an app to do what was described. I didn't launch mine, nor participate in his (obviously). I suggested that a business in that space, if successful, would result in a similar outcome as happened to other founders of international money transmission systems that weren't under direct government control: i.e. swatting. He was not di…
If the last few decades tell us anything, it’s once you’re large and have a lot employees, you’re above any regulation that would put you out of business. Slaps on the wrist are the worst you can expect.
There's a lot of hidden soft power in the USA amongst the ultra-wealthy, I've come to learn.
(Note that this is not a criticism specifically against Coinbase, per se; more an indictment of the lack of equal protection under the law in the USA in general. All animals are equal, but some animals are more equal than others.)
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If compromising the permissionlessness of Bitcoin is the only way for Bitcoin to come to a certain market, then perhaps it would be better for companies like Coinbase not to exist, and people who want to use Bitcoin should have to take the steps involved in self-custody. To me, it's a shame to see. Now that Gmail and Coinbase have captured so much of their markets, they (or anyone who can coerce them) are now free to…
The coins stored on Coinbase (and other crypto exchanges for that matter) are at all time lows, people are self-custodying their coins and using them on decentralized protocols where they don't have to trust centralized 3rd parties. Coinbase is just one player in the whole space.
I fear that neither is true.
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Scott Sumner has an interesting argument that it's not a bubble. Similar for the so called 'tech bubble' around the start of the millennium: if you bought all the tech stocks back then and held them until today, you would have made an OK return. (Of course, many companies have gone out of business, but there were a few outsized winners to make up for it. Any individual tech stock was extremely risky, but the overall…
Except 75% or so of this bubble is mined in China and more American firms keep buying into it... This story doesn’t likely have a happy ending.
And that's exactly what you would expect when extrapolating from the economic argument above!
To come back to the analogy with dot-com companies:
In a field where a winners might give you outsized 100x returns, you expect perhaps 99 out of 100 companies to be total garbage losers that go bust. So that the average return from investing in all companies in that field is something normal.
Otherwise, rational investors will keep pumping money into that field and funding more and more companies until that's true.
Same here: even if you believe that in 20 years cryptocurrencies will dominate the world economies (just like 20 years after the dot-com boom and bust, internet companies like Amazon and Google dominate economies), still most almost all cryptocurrencies will fail.
The political risks, that you are alluding to, fit this argument just like any other risk would.
Thanks to eg bitcoin futures, it's not relatively easy to go shortsell (something like) bitcoins, so I expect the market price to be roughly in line with the best forecasts possible.
(Only 'roughly', because the market for bitcoin is still pretty tiny, and not very developed, compared to eg US inflation forecasting markets like https://fred.stlouisfed.org/series/T5YIE )
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>> but in terms of his vision of the world more united where it is easier to send and receive money without paying outrages fees, he definitely failed on that promise. It was Bitcoin that failed to deliver that promise, not him.
Or both. Bitcoin and Coinbase each have outrageous fees.