Coinbase Offers Another Way to Ride the Bitcoin Roller Coaster

Coinbase Offers Another Way to Ride the Bitcoin Roller Coaster

Coinbase Global is going public just as enthusiasm for the digital currencies it trades is exploding. Investors should brace for a wild ride.

Coinbase, which revealed its financials last week ahead of an anticipated direct listing, said it handled nearly $200 billion worth of trading in digital assets like bitcoin and ether last year, and stored or held in custody about 11% of the total market capitalization of crypto assets at the end of last year. Trading volume surged in the fourth quarter, nearly doubling from the third quarter. Coinbase earned $322 million in net income in 2020, versus a loss of $30 million in 2019.

A lot of what Coinbase does today will be familiar to many financial investors: It is an exchange, a custodian, a retail brokerage, a prime brokerage, a digital wallet and more—but for crypto.

For now, activity is predominantly monetized via individual customers who buy, sell and hold crypto via Coinbase. Of its more than 43 million retail users at the end