In addition to deciding to cut costs, Coinbase might shift its focus to subsciption services that give 18% of the company’s revenue. Currently, the company offers Cloud services and a separate subscription product, Coinbase One.
Coinbase Global Inc (NASDAQ: COIN) CEO Brian Armstrong has recently had an interview with CNBC’s technology reporter Kate Rooney. During the interview, Armstrong has admitted that Coinbase is now facing economic challenges. Therefore, Coinbase is looking for ways to reduce its spending and cut costs. Moreover, it is considering shifting its focus.
As Brian Armstrong has said, the current downturn in the performance of Coinbase caused by crypto winter is reminiscent of what the company had to deal with in the past.
He said:
“We have this saying internally, I like to repeat a lot, which is you know, it’s never as good as it seems, it’s never as bad as it seems. I think one of the reasons Coinbase has been so successful in the last 10 years is we just we try not to get focused on short-term ups and downs.”
The first thing Coinbase is thinking about is cutting costs. The company is looking at where it can reduce spending and convert as many fixed costs into variable costs as possible. Back in June, Coinbase cut 18% of its workforce. At that time, the layoff was also contributed to the recession that resulted from crypto winter.
Shift to Focusing on Subscriptions
In addition to deciding to cut costs, Coinbase might shift its focus to subscription services. Currently, the company offers Cloud services and a separate subscription product, Coinbase One. The latter is still available in the beta version, but it provides higher-level customer support and other benefits. It offers $0 transaction fees, $1 million in account protection, and 24/7 customer support.
Armstrong said:
“I do think there’s going to be margin compression, eventually it has to happen at some point because everything that we’re building, you know, others, eventually you’re going to build it and it’ll become a little bit more commoditized. I’d like to get to a place where more than 50% of our revenue is subscription and services.”
For now, 18% of Coinbase’s revenue comes from subscription services.
Coinbase and the SEC
Lately, Coinbase has also been in trouble because of SEC scrutiny. Earlier, we reported that the regulatory agency started investigating Coinbase to determine if the exchange facilitated trading for assets that should be securities. Furthermore, the regulatory agency charged an ex-Coinbase product manager with fraud on that basis.
Recently, another complaint has been filed against the exchange. According to the complaint filed in the US District Court for the Northern District of Georgia, Coinbase is also accused of causing financial harm to its customers by locking them out of their accounts permanently or for an extended period of time, as well as breaking federal law by listing securities on its trading platform.
Darya is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding the ways blockchain can change different industries and bring our life to a different level.
Ecosystem
Research
News Network
About