[walexander]

Not sure what the operating costs look like for Coinbase, but here's some napkin math based on just the Coinbase Pro exchange .

They get roughly $200 per bitcoin trade. That's on both sides, so $400 per bitcoin transaction. Today was a slightly higher volume day but they did $1.6B in BTC-USD, so around ~30k bitcoin changed hands.

30k * 400 = $12Million

Bitcoin is 1/3 of their volume (they have a lot of other crypto currency pairs), so let's take 3x of that = $36 Million in trading fees today.

Bitcoin is a 24/7 market, so 365 days = $13.14 Billion per year.

This does not even count what used to be (still is?) their main business of just buying and holding bitcoin for people through DCA buys or on their app. They also are starting to have a bunch of other revenue streams through loans, debit cards, etc and invest in a number of early crypto projects.

I'm not sure what the multiple is going to be like since I don't know their expenses, but since most tech companies are valued from revenue and future growth expectations anyway, who knows.

[pushrax]

"Coinbase generated $141 million of net income on $691 million in revenue for the first nine months of 2020, according to documents shared with investors."

Though 2021 will be higher, will it be 20x higher?

[walexander]

The first nine months bitcoin was at a $10k and below level. They are making considerably more money since the boom took off after that.

I don't know if it will be 20x higher either. Just saying, this makes more sense than say, Zoom, which trades at $120B mcap.

I dont think the volumes will last, but if you look at volumes today and extrapolate further growth, then sure $100B makes sense.