Coinbase’s $8 billion valuation for potential IPO under threat as trading volume slumps

Coinbase’s COO, Asiff Hirji recently spoke about how Coinbase’s trading volume has slumped as a result of the bear market and how it would affect their potential IPO on CNBC’s Fast Money.

Earlier this year, Coinbase received a funding of $300 million in an investment round which values Coinbase up to $8 billion if it ever decides to go public. Referring to the slump of Bitcoin and cryptocurrencies over the past year and the investment rounds Asiff Hirji said:

“We had a number of institutions come in and practically invest in us, we basically took money for a rainy day. None of those investors were betting on the price of Bitcoin today, tomorrow, or even a year from now… But if you have a long-term constructive view of where crypto is going, we are the best-leveraged bet on crypto you can find.”

He said that they are aiming to help advance cryptocurrency and technological adoption and that is why companies like Tiger Global led the investment rounds. Hirji even added that they were very happy with the way they did the rounds and investments that followed.

Asiff Hirji went on to say that their revenue is directly tied to their trading volumes, which were obviously very low in the current bear market. Hence, their revenue is very low, which is true with most or if not all the cryptocurrency related companies, he added.

He commented:

“We have a long way to go before the IPO, there’s so many things that we are doing as a business and we are focussed on building a great business for the ecosystem.”

Moreover, Asiff explained how Coinbase has attracted so many institutional investments by creating a pool of liquidity, a valid venue to trade on which is compliant to government regulations.

Hirji continued:

“We have the only qualified custodian solution in the space… our market data underpins many of the derivative products out there, and I think having a healthy derivative market out there is essential to the formation of a healthy crypto-market… We’ve actually had hundreds of institutions on-board on to our custodian.”

Mike McDonald commented:

“We’re the best leveraged bet on crypto that you can find”

Sounds like he’s never used Bitmex”

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