Coinbase is flying despite regulatory attacks

Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets

In Coinbase’s latest advertisement, President Abraham Lincoln is depicted on a United States Cent asking to be ‘taken off this piece of scrap metal’ and to be made digital. Coinbase’s ads becoming snazzier coincides with the company beating market expectations and posting strong 2023 earnings. Its $3.1 billion revenue for the year came despite 45% cost cuts. The company’s 4th Quarter revenue of $954 million was over $100 million above analyst predictions. Its stock price grew over 190% over the past year. In good crypto fashion, the earnings can be minted as an NFT.

Coinbase is doing well across different arenas. In court, it has been running rings across the U.S. Securities and Exchange Commission to force the agency to explain how it decides which cryptocurrencies are securities. On the institutional side, Coinbase holds custody over 8 out of 11 of the approved Bitcoin ETFs. It also just launched its international Derivatives Exchange that is not available to US customers and competes with providers like Binance.

Impressively, Coinbase has not forgotten its roots. Its Layer 2 Blockchain on top of Ethereum, called Base, is anything but a ‘Corporate Chain.’ Projects and NFTs on Base have significantly contributed to the recent boom of Farcaster, a Decentralised Social project that has started to take off. The language, innovation and culture developing on Base, and fostered by Coinbase team members, make it clear that the company remains crypto-native at its heart.

But new challenges loom. Balancing continuing institutional adoption with Crypto innovation, in the middle of a US regulatory attack, is no easy feat. A looming push by politicians to censor or ban crypto self-custody poses further legal threats.

Coinbase has played a major role in political crypto advocacy by driving efforts to educate legislators. The company takes the legal fight back to bad-faith regulators like the SEC under its current chair Gary Gensler. Yet, in times so polarised that Abraham Lincoln would feel right at home, Coinbase’s biggest hurdles still lie ahead. Analysts might have underestimated it, but one projection is easy to make. Coinbase will have many more battles to fight until the penny goes fully digital.