A new report out Tuesday from the technology publication Recode is forecasting explosive growth for digital currency exchange Coinbase’s revenue in 2017.
Recode estimates the popular Bitcoin platform generated more than $1 billion last year, a jump it attributes to layman interest in both Bitcoin and other cryptocurrencies that users can buy and sell through the app.
The $1 billion in 2017 is much higher than the internal goals Coinbase had reportedly set for itself this year, according to a report from Recode this summer. Sources had told Recode that Coinbase was targeting between $500 million and as much as $600 million in revenue as of September 30, but “bitcoin’s run between Thanksgiving and Christmas boosted the company’s 2017 revenue,” nearly 40 percent from the figure it projected last year.
Aside from processing Bitcoin payments, Coinbase, which was founded in 2012, also provides wallet services for holders of the digital currency.
Coinbase has been at the center of the speculative frenzy driving up the value of Bitcoin, which topped $19,500 in December. While there are many Bitcoin exchanges around the world, Coinbase has been the dominant place that ordinary Americans go to buy and sell virtual currency.
The five-year-old startup’s revenues is said to have reflected the overall cryptocurrency market, with Coinbase achieving record trading volumes, to the point where it crashed two months ago because it couldn’t handle the surge.
Coinbase has surpassed 12.0 million registered users in November 2017. The cryptocurrency exchange added an astonishing number of users last year – more than 2 million.
Facing challenges on several fronts, the US CFTC is investigating the performance of Coinbase’s institutional exchange platform GDAX over the June 21st Ethereum flash crash.
Earlier in August, the San Francisco startup secured a giant $100 million investment from several investors, giving the company a valuation of $1 billion and making it first ‘Bitcoin unicorn’.
Coinbase warned its own shareholders to not engage in those conversations in a statement this weekend.
“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. We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so,” the company said.