Coinbase, an American cryptocurrency exchange, aims to increase subscription revenue in the long-term to counter potential profit margin compression.
In a lengthy interview with CNBC’s Crypto World, Brian Armstrong , the founder of the firm and its CEO, discussed the long-term prospects for the American cryptocurrency exchange. One of the key points was the possibility of lower fees in the future, and how the company plans on avoiding this.
Armstrong stated that he believes profit margin compression will occur as more competitors and exchanges launch similar products and services to compete for market share.
“This is why our company invests in subscription and service revenue today and we are realizing that trading fees will still play a significant part of our business in 10 to 20 years.” But I would like to see more than half of our revenue come from subscriptions and other services.
Armstrong stated that subscriptions and services account for 18% of the company’s revenue stream. Armstrong explained that the company has been focusing on this shift for three years. Armstrong stated that this was an increase from the 4% contribution in 2020.
Coinbase CEO stated that USDC custody services and its staking offerings were the main drivers of subscription revenue. The development of Coinbase Cloud, and other projects in the pipeline will further increase these revenue streams.
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As Armstrong explained, the growth of Coinbase’s staking product depends on the scalability and security of the underlying blockchains that power it. This is due to Ethereum’s forthcoming transition to a proof of stake consensus algorithm.
Coinbase’s NFT marketplace and the burgeoning NFT space were also topics of discussion. has launched a beta version of its NFT Marketplace in April 2022. The CEO stated that the company remains committed to NFTs, and believes it will become a major business.
It’s still very early in the NFT space. Last year saw a huge uptake in the NFT space with traders trading Bored Apes, and other things that gained traction. However, I believe that this is only the beginning of a long journey of NFTs becoming more.
Armstrong emphasized his belief in NFTs and the potential for a revolution in how people use social networks, how music is made, and how creative talent interacts to audiences. Armstrong also explored the possibility of natively integrating Coinbase NFTs in various platforms that people use every day.
“We are currently aggregating all of the places where people can bid on NFTs in one location. There is no reason to use it there if we can combine that.
The exchange is currently testing a beta version of its Coinbase One subscription service. This product gives members access to no-fee trading and $1 million account security. It also offers automated tax services. Monthly subscriptions cost $29.99.
