THE CEO’s BLOG
Coinbase is going public tomorrow. So what does that have to do with beauty products you may ask? Good question. Nothing. Not yet anyway.
In case you are not in the know about Coinbase, it is the largest “wallet” and marketplace for digital currency include Bitcoin (BTC) and Etherum (ETH). It boasts more than 25 million users and is highly profitable. Valuations are coming in at close to $100 billion and that is real U.S. dollars.
I have written about BTC and other digital currency recently but my reason for writing about Coinbase today besides it going public tomorrow, it what we can expect the future to hold about digital currency. Already many countries from Australia to China to the U.K. and even the U.S. are exploring their own digital currency. Right now if you want to transfer funds you have to use a third party like Western Union or even your bank but there are fees involved and it is a very complex process.
However digital currency is not what all the excitement is about. It is about DEFi (decentralized finance). This is where ETH comes in and most of all other Coinbase offerings. ETH is the building block for most DeFi platforms. DeFi platforms are seamless, do not involve third-party intermediaries and have grown more than 1000% in just the last year. Billions of dollars are being moved through DeFi daily and that is without most people knowing what DeFi is all about. I can guess in only a few short years more than $1 trillion will be processed.
By-products of digital currency and DEFI are numerous. Already NFT’s are the latest fad and everyone knows about someone paying $69 million for a NFT. What is a NFT? A non-fungible token. OK, so now you want to know what a non-fungible token is, right? HA! It means that the item is unique and cannot be replaced by something else. Think of a rare baseball card in which there is only one in the world. A NFT is the same thing but digital. Virtually all NFT’s are based on ETH so as NFT’s become more mainstream, so will ETH.
So with DeFi and NFT’s growing like weeds, ETH is the glue that holds everything together. And if you want to buy ETH, can you guess where you can buy it? Robinhood? No. Your bank? No. Local Kroger? No. Unless you have more than $25K to invest, the answer is Coinbase.
ETH was invented in 2014 and came out at a penny. Today the value is over $2200 and up more than 50% in one year alone. Some say the value can go to $10,000 and over. No one really knows because we are in the infancy stages of all this.
What all this reminds me of is AOL, Netscape, Atari, Intellivision and early Nintendo. Only Nintendo is still around (although Atari is alive in Paris and just introduced its own digital coin but has nothing to do with the games like PONG back in the day). Eventually Google, Microsoft and Apple took over and are the leaders today. However, what BTC and ETH have done as pioneers is so much different than what AOL and others did when they were pioneers. While there can be an infinite number of digital coins, there cannot be another BTC or even ETH unless the government gets involved and decides to get into digital currency and DeFi.
Some pundits say BTC and all this other stuff is a Ponzi scheme, a bubble and will blow up and everything will be worthless. BTC did crash in 2017. A year ago the value of BTC was only $7,000 and now just broke a record at $63,000. Big investors are involved and while there can only be 21 million BTC produced, of which 18 million have been produced, the odds seem less than in 2017 of another crash. Those that hold BTC (2.4% of the holders own more than 95% of BTC) claim it will hit $115,000 in August and march to $250,000 and higher in 2022.
For now, everything in this space is fascinating to me and will become part of our ecosystem. Coinbase is going to be one of the most exciting IPO’s ever (they are doing a direct launch) and after tomorrow, millions of people will know more about all this. Back in 1990 if you thought everyone on the planet would be walking around with a cellphone, you would have been laughed at. The same thing is going to happen with digital currency but it is not going to take 20-25 years to make happen. Let’s watch and see. And if you can, buy at least one share of COIN tomorrow for history sake.
Have a great day!
©2019 Larry Gaynor. All rights reserved.