Coinbase, one the largest platforms for cryptocurrency trading, crossed $1 billion in revenue last year, Recode reports, quoting informed sources.
The San Francisco-based company was only expected to do about $600 million in yearly revenue as of September 30, but Bitcoin’s (TIKER: BTC.EXANTE) run between Thanksgiving and Christmas boosted the company’s 2017 revenue to over $1 billion,
According to the report, Coinbase makes money not on Bitcoin’s price but on the volume of trades — charging both the buyer and seller usually a fee between 0.25 percent and 1 percent of the total transaction size through the site.
Its success has attracted overwhelming interest from venture capitalists and private brokers in acquiring some of the company. However, Coinbase has warned its own shareholders to not engage in those conversations.
“As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market,” the company said.
“We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so.”
The company, founded in 2012 by Brian Armstrong and Fred Ehrsam, allows both consumers and merchants to buy and sell not just Bitcoin but also competing digital currencies such as Litecoin (TIKER: LTC/USD.BITFINEX) and Ethereum (TIKER: ETH/USD.BITFINEX). The portal is attractive to venture capitalists, because it allows them to place a bet on the broader cryptocurrency market as opposed to an investment in a specific blockchain-enabled technology or a specific currency.