Crypto Chaos: Coinbase's $420B AUM Makes it Bigger than a Bank (But Not Too Big for Its Britches)

“Crypto Chaos: Coinbase’s $420B AUM Makes it Bigger than a Bank (But Not Too Big for Its Britches)”

Crypto Chaos: Coinbase’s $420B AUM Makes it Bigger than a Bank (But Not Too Big for Its Britches)

So, you know how people always say that cryptocurrency is the future? 🤔 Well, it looks like the future is now, folks! Coinbase, the world’s third-largest centralized cryptocurrency exchange (CEX), is holding over $420 billion worth of digital assets on behalf of its users. That’s a big deal, right? 🤑

According to Brian Armstrong, the co-founder and CEO of Coinbase, that $420 billion AUM would make Coinbase the 21st largest bank in the US. Yeah, because what could possibly go wrong with a bank that’s only 21st largest? 😂

Armstrong wrote in a Feb. 7 X post: “If you think of Coinbase like a bank, we now hold about $0.42T in assets for our customers, which would make us the 21st largest bank in the US by total assets, and growing.” Growing? That’s cute. 🌱

Oh, and if you think of Coinbase more like a brokerage, they’d be the 8th largest brokerage today by AUM. Because who needs a boring old bank when you can be a cool, edgy brokerage? 😎

Coinbase’s $420 billion AUM is over three-fold compared to the $112.9 billion worth of assets managed by the New York Community Bancorp (NYCB), which is the 21st largest bank in the US. Yeah, because NYCB is probably just jealous of Coinbase’s sweet, sweet crypto riches. 💸

The NYCB posted a $260 million quarterly loss for the fourth quarter of 2023, after purchasing the collapsed, crypto-friendly Signature Bank in 2023. Ouch, that’s gotta hurt. 🤕

Coinbase, on the other hand, posted a $273 million net profit for the same quarter, which marked the first positive income quartet since the fourth quarter of 2021. Cha-ching! 💸

Crypto Will Unite Financial Services Under a “Single Primary Financial Account” — Coinbase CEO

According to Armstrong, more advanced cryptocurrency platforms could consolidate today’s numerous financial services into a single all-in-one neobank in the future. Because who needs separate accounts for everything when you can just have one account that does it all? 🤯

“With crypto, the line between these categories is blurring,” wrote Armstrong. “In the updated financial system, you will have a single primary financial account which serves all these functions. A greater [percentage] % of global GDP will run on more efficient crypto rails over time.”

And, of course, Armstrong had to throw in some obligatory crypto-bro speak: “We’ll have sound money, lower friction transactions, and greater economic freedom for all!” 🙄

But, let’s be real, the industry still needs to remove the most pressing friction points to bolster mainstream adoption. I mean, who wants to deal with complicated seed phases and transaction fees? 🤷‍♂️

Chintan Turakhia, senior director of engineering at Coinbase, said: “If our goal is to bring in the next billion users — and let’s start with just 100 million — we have to take all those friction points out.”

Some of the most pressing friction points include setting up a wallet with a complicated seed phase, paying transaction fees, and buying blockchain-native tokens to transact on a network. Yeah, because that sounds like a real blast. 🎉

2025-02-08 16:33

Crypto Will Unite Financial Services Under a “Single Primary Financial Account” — Coinbase CEO

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