January 18, 2022

Coinbase does $2B per quarter! 🤯

In Today’s Email:

  • Coinbase Makes $2B per quarter!

  • Walmart Enters the Metaverse 🤷

  • Scott Galloway on Web3

Coinbase Makes $2B per quarter, with 50% Profits

When companies are public, they have to disclose a bunch of data.

That becomes business porn for people like us. We get to peek under the covers and see what’s there.

Here’s some juicy bits from their Q2 2021 earnings report:

  • Coinbase made $2B in revenue for the quarter

  • 95% of that comes from trading fees (the little 1.5% fee they charge you when you buy bitcoin)

  • 90% of their trading comes from retail investors (average joes, not institutions)

  • They had ~$1B of expenses for the quarter. That is evenly broken into 4 categories:

    • $250M for employees

    • $250M for transaction expenses

    • $250M for tech

    • $250M for marketing

  • They plan to invest $500M into crypto (to hold it on their balance sheet), 10% of quarterly earnings at a time

  • 50% of user transactions are on non-bitcoin & non-ethereum assets

Walmart enters the metaverse…and IDC

Walmart is getting some headlines because they submitted 7 trademarks for the metaverse, including:

  • To sell virtual goods, including electronics, home decorations, toys, sporting goods and personal care products

  • Walmart Virtual currency

  • Walmart NFTs

I have nothing to say. This story is stupid. Does anyone care what Walmart is doing in the metaverse? Who is forcing me to type about Walmart’s NFT patent?!! Nobody cares!!

Large corporations don’t build the future. History teaches us that it’s not large corporations that build the future. It’s hairy dudes, fueled by ramen and red bull in some dorm room that are building the thing that will change a billion peoples lives.

Scott Galloway on Web3

Scott Galloway is an NYU professor who has built a course empire + become infamous for how bad he’s been at picking winning stocks.

Just look at how you would’ve performed, if you would’ve picked the opposite side of him:

source: the anti-galloway index

Well, professor big brains wrote a long piece about Web3 with a few key criticisms:

  • It’s an insiders game – The top 9% of accounts hold 80% of the $41B market value of NFTs on the Ethereum blockchain

  • Everything is actually dependent on the same middlemen as Web2 – just look at Opensea and Coinbase

  • DAO’s can’t work – there’s a reason entities of any size, from school districts to shoe companies, adopt a representative model instead of attempting pure democracy. Leadership, expertise, and accountability improve outcomes

Based on Prof G’s track record, this is possibly the best thing that can happen to Web3. He’s like the madden curse, but for good luck.

In general – a word of advice.

It’s OK to be skeptical, and to call out when something is broken.

But to just bet against entire technologies is a losers game. You might be right about 95% of the projects, but you’ll miss the 5% that change the world. (like during the dotcom boom, you’d look smart when most projects failed..but you missed out on Amazon, PayPal & eBay)

– Mr. Seed Phrase