3 ms·

how at risk is coinbase?

bsamuels 4y ago
afaik coinbase is just an exchange, so hopefully they didn't speculate on crypto derivatives with 0 risk management like 3AC did
- FabHK 4y ago
  Sure, but if there's no more "number goes up", and people stop trading crypto, then Coinbase's revenue vanishes.
  - cbm-vic-20 4y ago
    They get a cut in both directions.
    - mertd 4y ago
      That's why the parent emphasized "trading stops", as in there is no trading in any direction.
    - dwater 4y ago
      Both directions meaning buying and selling, not active market and dead market like the parent comment is talking about. What's their cut of trades on Terra today?
    - dpbriggs 4y ago
      Their revenue is proportional to volume. Which we can expect to eventually plummet as people are skittish to enter and happy to exit.
      - ineedasername 4y ago
        And their revenue is dollar denominated. Even if the volume of coins traded remained the same, if the dollar-denominated value of those coins drop then so does revenue.
- adrr 4y ago
  I heard exchanges hold a bunch of the stable coins in lieu of holding actual real currency. Not sure if the statement is true or not.
- no_butterscotch 4y ago
  Coinbase has Coinbase Ventures, for which they invest in many crypto projects.
boc 4y ago
If the price spirals from multiple whales getting liquidated/margin-called (3AC included), the whole crypto project dies and Coinbase sees their volume drop 100X. The issue is that with past Crypto runs, not everyone knew about BTC/ETH/ETC. This time around, literally the entire world has heard about crypto and has been pitched to buy, up to having Matt Damon calling you a coward for not buying during the Superbowl. So when the price of BTC finally stops at somewhere like $800 a coin, people aren't going to be buying anymore. There's no magic left in the system. The whole "it runs on vibes" thing is the only true statement that backs the price of BTC given that it's a negative-sum game. When the vibes run out the miners leave the hotels fold the bars close and the whole circus leaves town. Coinbase will be a ghost town in a few years.

afaik coinbase is just an exchange, so hopefully they didn't speculate on crypto derivatives with 0 risk management like 3AC did

FabHK 4y ago
Sure, but if there's no more "number goes up", and people stop trading crypto, then Coinbase's revenue vanishes.
- cbm-vic-20 4y ago
  They get a cut in both directions.
  - mertd 4y ago
    That's why the parent emphasized "trading stops", as in there is no trading in any direction.
  - dwater 4y ago
    Both directions meaning buying and selling, not active market and dead market like the parent comment is talking about. What's their cut of trades on Terra today?
  - dpbriggs 4y ago
    Their revenue is proportional to volume. Which we can expect to eventually plummet as people are skittish to enter and happy to exit.
    - ineedasername 4y ago
      And their revenue is dollar denominated. Even if the volume of coins traded remained the same, if the dollar-denominated value of those coins drop then so does revenue.
adrr 4y ago
I heard exchanges hold a bunch of the stable coins in lieu of holding actual real currency. Not sure if the statement is true or not.
no_butterscotch 4y ago
Coinbase has Coinbase Ventures, for which they invest in many crypto projects.

boc 4y ago

If the price spirals from multiple whales getting liquidated/margin-called (3AC included), the whole crypto project dies and Coinbase sees their volume drop 100X. The issue is that with past Crypto runs, not everyone knew about BTC/ETH/ETC. This time around, literally the entire world has heard about crypto and has been pitched to buy, up to having Matt Damon calling you a coward for not buying during the Superbowl. So when the price of BTC finally stops at somewhere like $800 a coin, people aren't going to be buying anymore. There's no magic left in the system. The whole "it runs on vibes" thing is the only true statement that backs the price of BTC given that it's a negative-sum game. When the vibes run out the miners leave the hotels fold the bars close and the whole circus leaves town. Coinbase will be a ghost town in a few years.