- Amidst aggressive U.S. regulations, Coinbase’s business is reportedly booming.
- Bitwise executive claims that Coinbase benefits from hostile U.S. crypto regulation.
- The executive projects that crypto startups will fall off the wayside.
As U.S. regulations tighten, Coinbase thrives, creating an artificial “moat” for its business, according to Bitwise’s CIO Matt Hougan.
How Coinbase Benefits from U.S. Crypto Regulation
According to Bitwise’s CIO Matt Hougan, Coinbase is the key beneficiary amidst aggressive U.S. enforcement actions in the crypto space. Recently, firms like Robinhood Crypto, MetaMask, and Uniswap received Wells notices from the U.S. SEC (Securities and Exchange Commission), signaling the SEC’s intention to take enforcement action against them. The CFTC (Commodity Futures Trading Commission) Chair has warned that this trend will intensify in the “next 6–24 months.”
Coinbase’s Playbook in the U.S. Regulatory Heat
Despite the regulatory heat, Coinbase has successfully diversified its ventures, including the Ethereum [ETH] layer 2 — Base. The company has used this opportunity to raise cash (now $7.1 billion) and massively diversify their business. The high regulatory costs in the U.S. could stifle competition and deter new entrants in the space. This further consolidates Coinbase’s market share as the primary place for buying or selling digital assets and tokens in the U.S. As of Q4 2023, Coinbase commanded over 75% of the US market share.
Future Outlook
However, firms like Uniswap [UNI], MetaMask, and even Robinhood Crypto are ready to fight back at SEC. Robinhood CEO Vlad Tenev has vowed to contest this matter in the courts if necessary. It remains to be seen how Coinbase market share will be affected if these embattled crypto firms win against the SEC.
Conclusion
As U.S. crypto regulations tighten, Coinbase seems to be thriving. The company has successfully diversified its ventures and consolidated its market share. However, the future outlook remains uncertain as other firms are ready to fight back against the SEC.
