Cryptocurrency exchange platform Coinbase is looking forward to NFTs (Non-Fungible Token) as a potential new business line. The blockchain-based token reflects unique ownership of digital or physical items. This includes anything from a piece of art to famous or important tweets or a concert ticket. Undoubtedly, non-fungible tokens are in the mainstream from the beginning of this year.
NFTs as a Potential New Business Line for Coinbase
According to the CFO of Coinbase, Alesia Haas “NFTs would be a natural fit for Coinbase’s platforms and that the tokens could provide the company with a new source of transaction fees.”
"We definitely view ourselves as the on-ramp to the #crypto economy."
— Julia Chatterley (@jchatterleyCNN) April 14, 2021
While NFTs have existed for several years (CryptoKitties, the digital kitten collectibles that got hot in 2018, were an example of NFTs). Powered by high-profile transactions, For example, a painting was auctioned for $69 million by artist Beeple.
Although it was not clarified when Coinbase might offer NFTs, or whether the company plans to build out a marketplace for original NFT artwork a la Nifty Gateway or Foundation, or instead just serve as an NFT resale forum. Nor did she declare anything for the number of fees the company might collect.
Haas VS Robinhood
From the latest, the company is earning high profits and hence will obtain an estimate of $100 million soon. In particular, the commission fee of Coinbase is over 2%.
Haas further acknowledged that “the company’s margins may come under pressure over time, but said this is not an immediate concern.”
“It’s true that over time there’s fee compression across all assets. But I don’t believe [crypto fees] are being commodified at this time,” “Coinbase will have to diversify its revenue streams; 94% of its revenue currently comes from trading commissions on BTC and other cryptocurrencies,” she added.
Haas also acknowledged that “a part of the company’s strategy will be encouraging existing users to branch out to the growing array of new products, including those related to lending and staking, part of the white-hot Decentralized Finance (DeFi) space swelling as the crypto industry matures.”