How Coinbase will survive

“we plan for all market scenarios, and now we are starting to put some of those plans into practice.”

The Crypto market is in free fall, and Coinbase is on the verge of declaring bankruptcy, potentially losing about $300 billion. Although Coinbase hasn’t started terminating staff yet, it has halted the hiring process. In the first quarter of 2021, Coinbase’s expenses are nearly double its revenue. Will Coinbase make it? These are some reasons that could work in Coinbase’s favour.

With a market capitalization of $14 billion, Coinbase could be an easy acquisition for Chase, Goldman, Microsoft, or even Elon Musk.

Coinbase might survive beyond Crypto if it expands into payments, forex, or equities. Bitcoin was merely a lure to encourage consumers to sign up for other services.

Coinbase is, as the adage goes, “too big to fail” at this point.

In the worst-case scenario, if Coinbase goes bankrupt, it will have a long-term impact on the entire Crypto/Bitcoin business.

If the price collapses by 90% or more, it can cause a micro-depression among younger people who own Crypto, similar to the dust bowl for farmers during the Great Depression.

There are two possible outcomes for the Coinbase story:

• Crypto and Coinbase fail.
• Crypto surges back up from here (as in the past). Coinbase is acquired or spun off.

Coinbase is prepared for any market scenario. Coinbase wrote in a recent blog post, “We know this is a confusing time and that market downturns can feel scary. But as we said at last week’s Town Hall, we plan for all market scenarios and are putting some of those plans into practice.”