Coinbase, one of the largest platforms for buying and selling cryptocurrencies, has made US$1 billion in revenue last year, technology news website Recode reports, citing industry sources.
The San Francisco-based virtual currency broker was only expected to do about US$600 million in yearly revenue as of September 30, the report said.
Its remarkable performance could attract further investment in the company, and its valuation is likely to have doubled from US$1.6 billion as of August, Recode said.
The company’s revenue surge was most noticeable during the period from Thanksgiving to Christmas as investors rushed to buy bitcoin and other cryptocurrencies, the report said.
Coinbase added about 100,000 accounts around Thanksgiving holiday, CNBC earlier reported, citing an analysis by Alistair Milne, co-founder of Altana Digital Currency Fund.
Bitcoin now has a market cap of about US$182 billion, according to Coinmarketcap.com. Its price dipped below US$10,000 last week, and is now trading at US$10,823.
Serving as both an exchange and a broker of deals, Coinbase earns its revenue by charging both the buyer and seller a fee equivalent to between 0.25 percent and 1 percent of the total transaction size, Recode said.
The company has attracted great interest from outside investors. Several shareholders have received inquiries from venture capitalists and private brokers about buying shares in the company.
However, Coinbase urged its shareholders not to sell shares, the company told Recode in a statement.
“As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market,” it said. “We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so.”
Recode, citing company insiders, said Coinbase also plans to stop fundraising activities. Its Series D funding round in August, which raised US$100 million, could be the company’s last before an initial public offering.
Founded in 2012, Coinbase saw its business boom as it gained tremendous popularity, with its brokerage accounts surging to over 13 million.
Backed by high-profile Silicon Valley investors including Andreessen Horowitz and Union Square Ventures, Coinbase has so far raised over US$225 million, according to Crunchbase.
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