Coinbase, a major U.S. crypto exchange and provider of crypto wallets, announced on 30 October that it had successfully secured an additional round of funding, totalling $300 million. The transaction will bring the post-money valuation of the exchange to $8 billion. Tiger Global Management, an investment firm founded in 2001 and known for its participation in both private and public markets around the world, led the Series E financing round. Tiger also arranged backing form other crypto supporters, such as Y Combinator Continuity, Wellington Management, Andreessen Horowitz, and Polychain, among others. Rumors of this deal had surfaced earlier in October.
The transaction is one more indication that the cryptocurrency revolution definitely has legs and is here to stay. According to a statement from Coinbase: “The funds will be used to “accelerate” the adoption of cryptocurrencies, with plans to build infrastructure to support regulated fiat-crypto trading globally, and to lay the foundations for the support of “thousands” of new cryptos in future.” The firm also noted that a portion of the funds will be used to enhance its existing wallet product and “to create new “utility applications,” such as the platform’s recent move to launch a stablecoin, dubbed USDCoin (USDC), together with blockchain tech firm Circle.”
The announcement appeared in a company blog and also reiterated the Coinbase proposition that the institutional market is the future of the industry and that it intends to ease this segment into the cryptocurrency space. It recently opened its “custodial solution” for business in July and will soon be adding new features to this service. Back in May, it had claimed that, if only the industry could improve its infrastructure and diversified offerings, then it could possibly “unlock $10 billion of institutional investor money sitting on the sideline.”
What does this type of transaction mean for the crypto industry? Industry insiders see this specific funding round as just one more validation of the success of cryptocurrencies after years of criticism and constant attacks from government officials, bankers, and the investment community at large. When asked what he thought of the potential $8 billion valuation of Coinbase, Mike Novogratz, CEO of crypto merchant bank Galaxy Digital, remarked that, “Here’s the poster child of the crypto space worth $8 billion — that’s a real company, and Tiger’s not a flake of an investor. These are smart, savvy guys.”