[HN Gopher] Coinbase Burn Rate 1.5 Bil? Will This Company Last?
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Coinbase Burn Rate 1.5 Bil? Will This Company Last?
Curious, as I'm worried honestly as a prospective employee, will
the company even last? I wonder if Brian will reply to this cause
I'm curious to see what the burn rate is now with the layoffs and
rescinds of offers, and how the company is planning to live through
a 2-3 year maybe more recession + crypto winter.
Author : Hchanni
Score : 29 points
Date : 2022-06-17 17:41 UTC (5 hours ago)
| Komodai wrote:
| Maybe if they replace the execs, or specifically Brian :)
| swatcoder wrote:
| They're obligated to announce a strategy or attitude that sounds
| reassuring, but you can bet that most of the execs, board, and
| investors are _at least_ as worried as you are.
|
| Nobody honest leverages as much they have without believing the
| diaster scenarios are either a long shot or are far out. You
| don't win over today-money with presentations like "well, we'll
| probably hit a -80% crypto winter next year but can weather our
| way through 5 flat years if you give us oodles of capital now"
| Hchanni wrote:
| Yeah honestly, I feel like it has been handled the best with
| the public perception, and the way the twitter fiasco has been
| handled. However, I really feel the CPO (Chief Product Officer)
| really needs to get through some more concrete expectations and
| roadmaps. With the amount he's being paid his general
| perception around the company doesn't seem to be too hot.
| g42gregory wrote:
| I sincerely hope that Coinbase will survive and thrive through
| the difficult times in the next several years. They made trading
| cryptocurrencies easy and accessible to people, which is a
| fantastic service. However, if you are a customer, I would highly
| recommend that you used Coinbase for intended purpose only: as a
| (pretty good) Crypto Exchange. Do not keep your crypto holdings
| there. Your crypto is not protected if something, anything,
| happens to it. Including bankruptcy. It's not a custodial
| service. I would not keep the USD there either. I would just go
| in, do the crypto buy/sell and get out.
| str3wer wrote:
| this without considering they're actively trying to kill the
| anonymity of crypto by funding chainanalysis and other shit
| like that
| aaaaaaaaata wrote:
| But where are you recommending people custody their crypto,
| then?
|
| And the backups?
| ezekg wrote:
| Worth mentioning: you don't own the coin unless you store the
| private key yourself.
| StanislavPetrov wrote:
| On your own hardware, in your own safe.
| sschueller wrote:
| How? How can you loose money offering a trading platform where
| you charge fees unless people stop trading? Is the email/phone
| support required so costly that they need to hire all these
| people?
|
| To me it seems they took in more and more money from investors
| who want to make a quick buck seeing this company's profits
| double every year. At some point you have to ask yourself if you
| are growing recklessly und unsustainably.
| cyanydeez wrote:
| It's turtles all the way down
| paulcole wrote:
| > I wonder if Brian will reply to this
|
| He's too busy dunking on his employees on Twitter
| drexlspivey wrote:
| Afaik they remained breakeven/profitable during the last crypto
| winter following the 2017 bubble with BTC in the 3k-5k range, I
| don't see why they can't do the same now
| Hchanni wrote:
| They seem like in a "growth phase" and they went from like 1400
| employees in 2021 to around 6k up until start of layoffs, and
| the amount of users + amount of transactions has dipped.
| Hchanni wrote:
| I thought I'd add, I'm personally really into Crypto and want to
| see Coinbase last, and so this worries me a bit lol
| wollsmoth wrote:
| Where did you hear 1.5B?
|
| They lost .5B last quarter I think. Not sure if that's going up
| or down since they're shedding costs. I have no idea if retail
| trading is up or down this quarter but it sounds like their NFT
| marketplace isn't going great?
|
| Idk man. I would come up with some serious questions to ask them
| before signing on.
| Hchanni wrote:
| Yeah I actually read their shareholders letter, it seems that
| their Net loss is ~400mil. Which to be fair doesn't seem to be
| alarming since they were still in their hyper growth phase in
| Q1. I'd assume their revenue will go down from 1bil to like
| 650mil at the worst, and their general costs will probably go
| down too, to around 1bil maybe a bit less too but who knows.
| wollsmoth wrote:
| That seems reasonable. It's alarming to me that they seem to
| have hit a wall. What were the conditions that facilitated
| their hyper growth phase? Is the introduction of numerous,
| highly advertised competitors the difference? Are we moving
| to a place where people are trading less and holding more?
|
| I'd love to know more about their game plan.
| vosper wrote:
| > What were the conditions that facilitated their hyper
| growth phase?
|
| A huge wave of crypto hype and a worldwide asset price
| bubble (including their stock price as well as crypto
| currencies) fueled by central-bank money printing during
| Covid.
|
| > Are we moving to a place where people are trading less
| and holding more?
|
| Well, just trading less, as the crypto collapse is going to
| burn (has already burned) so many people that it will take
| some time before the next round of hype and FOMO builds, so
| that a new set of bag holders can be found.
| wollsmoth wrote:
| Yeah that's what I was pointing to.. But who knows if it
| will recover and how well. Ripple seems to have some good
| uses with speeding up money transfers but I wouldn't be
| shocked if crypto doesn't end up amounting to much in
| terms of practical applications.
| joezydeco wrote:
| Gotta crawl before you ball!
| SpikeDad wrote:
| I'm done worrying. I withdrew everything and closed my account.
| Crypto is a fools errand.
| Zetaphor wrote:
| I take it this is your first market cycle?
| quartesixte wrote:
| Crypto has the delightful additional risk of access that
| other securities don't really have.
|
| If you don't offload to a private wallet and Coinbase goes
| completely defunct, there is no protection. Coinbase's
| continued existence (and thus, your coins) and the market
| cycle of cryptocurrencies are mutually exclusive events.
| ishjoh wrote:
| I agree with your broad point.
|
| Crypto really is just speed running early banking and
| financial systems.
|
| Many bank runs would destroy banks and depositors were left
| with nothing. Eventually the FDIC was created to make sure
| people wouldn't lose everything and to prevent additional
| bank runs.
|
| What's also interesting to think about is if we will ever
| see a coin halt transactions to prevent price changes. BTC
| is unlikely to face this since it's based on proof of work,
| but maybe a proof of stake protocol might have something
| like this happen, or a coin that has a small number of
| miners.
|
| Maybe it would be similar to the few times NYSE has halted
| trading: https://www.thestreet.com/markets/history-of-
| notable-market-...
| randomopining wrote:
| Like you sold everything for USD or withdrew to cold storage?
| achow wrote:
| Bill Gates has a very different view:
|
| Not a 'Fools Errand' but a 'Greater Fool Theory'
|
| https://www.wsj.com/articles/bill-gates-says-cryptocurrencie...
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