Coinbase: Crypto future appears ‘brighter than it’s ever been’

Coinbase: Crypto future appears 'brighter than it’s ever been'
8 months ago
2 mins read

Cryptocurrency exchange Coinbase has stressed that the digital currency sector has a bright future despite the near-term market uncertainty.

In a blog post published on January 28th, Coinbase reiterated that the current market correction is not near the levels of 2018’s crypto winter, maintaining there are significant fundamentals bound to continue driving growth in the sector.

According to the trading platform, the current fundamentals replicate the 2017 market rally that laid the foundation for the recent growth. 

Coinbase cited aspects such as the continued focus on Web3 alongside increasing use cases in DeFi, NFTs, DAOs, gaming, and the metaverse.

“Just as the boom of 2017 fueled investments that laid the groundwork for the applications that are thriving today. <…> The market appears uncertain in the near term, but the future appears brighter than it’s ever been,” the exchange said. 

Coinbase Ventures focus on emerging crypto products 

In line with the projected growth, the exchange investment wing, Coinbase Ventures portfolio, has diversified its inroads into various crypto products covering over 250 companies.

The venture is more concentrated in centralized finance with a share of 23%, similar to decentralized finance. Protocols and Web3 have a share of 20%.

Interestingly, the exchange is increasingly involved in the metaverse, allocating 17% of its venture portfolio to the new concept. The share is similar to non-fungible tokens (NFTs). 

Coinbase Ventures portfolio by category. Source: Coinbase

Coinbase projects that metaverse applications will likely shift from decentralized initiatives to traditional companies like Microsoft and Meta.

Furthermore, the exchange highlighted that the cryptocurrency sector’s growth is attributed to capital inflow into the space mainly driven by institutions. Across 2021, the cryptocurrency sector attracted $30 billion from venture funding, more than all previous years. 

Crypto venture funding in 2012-2021. Source: Bloomberg

On the flipside, the crypto broker acknowledged that DeFi was integral to the crypto market’s growth in 2021, but the space comes with several vulnerabilities. 

With exploits from DeFi amounting to over $10 billion losses, Coinbase stated that the focus should be on improving user protection. 

Furthermore, the exchange platform pointed out that regulations will be a dominant theme in the crypto space across 2022. 

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Justinas Baltrusaitis

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.