Will Coinbase Last (from an oncoming intern)?

First of all I'd advise categorizing any company you've never worked for as your "dream company". Kinda the whole "never meet your heroes" thing. Idealism and "mission" has a a tendency to be crushed under the realities of corporate life and doing what it takes to make money, no matter how well a company is run (and Coinbase is a toss-up in that department).

Aside from that I haven't looked at the company financials or anything, but I'd be surprised if they died in 6 months, they had plenty of runway last I heard. I also don't see how being an intern there would be a black mark on your resume unless you're some web3 zealot who can't stop talking about how Bitcoin is going to replace the dollar in interviews or something (granted that might be a positive trait if you're interviewing for jobs in web3 related companies). If you're there as an intern or junior employee and the company goes under, no one's going to be blaming you. I imagine you'll have plenty of job prospects and transferable skills from the experience in such a scenario.

So best case scenario it's your dream job, worst case scenario you have a well-known and (from an outsider's perspective) technically competent company on your resume as a junior employee. But given the inherent volatility in the sector it would be naive to expect stability from the position. So if you do go ahead with the internship and get hired there, I'd keep your resume up to date and entertain the occasional interview.

Here's the Coinbase shareholder letter:

https://s27.q4cdn.com/397450999/files/doc_financials/2022/q1...

If you look at page 10, for Q1 2022, retail revenue was close to $1b, while institutional revenue was only about $50m, and hasn't been really growing (declining in fact). This likely means that when the hard time comes and people don't have disposable income anymore, Coinbase will also suffer when the tides of retail investors go out.

I'm beginning see Coinbase and Robinhood in the similar category of companies in pay day loans and casinos - they might do really well as a company but a lot of it is quite unhealthy profit generation from the least informed and struggling sector of the population.

They are a public company. Go look at their financials. They almost certainly aren't going bankrupt in the next 6 months. They have 6 bill in cash, and until this past qtr were cashflow positive for a couple years.

If they do go bankrupt in the next 6 months it will be because they are doing something shady and it blows up. I don't think they are, but they are in a very shady industry so they might be.

Why is a company which is in an industry which is full of scams and bs your dream company? May as well join Philip Morris? The other consideration is long-term, because either a) crypto blows up or b) margins will erode significantly. But those are 5-10 years out.

Good question! If I knew the answer, (well if I knew it would be NO) then I could get rich by betting on it using options or something like that.

Ahh. hold on, let's use that fact:

Let's say another 50% or more reduction in share price is 'bad' for you, the options market says the chance of that happening by the end of the year (well Jan 2023) is 10% ish, if I am reading it right. So the market thinks they will likely survive for about your internship anyway.

The probability of 10% is surprisingly about the same going forward another year to Jan 2024. So I think you are OK. If someone disagrees, go make some money, the market is ready to hand you cash.

This is quite a crude way, but it puts some probabilities on it, otherwise it is just my opinion something like "yes crypto is dead they'll go bust" which is just not based on anything.

Reference: https://www.barchart.com/stocks/quotes/COIN/volatility-greek...

Where "Delta" is approximately the probability of the option being exercised.

Now if you really want to make money, bet with your friends on things that sound unlikely but are likely, based on the deltas of options.

I don't know, but my company doesn't hire people who have worked in cryptocurrency, just like we don't hire people who have worked in gambling.

The concepts are fine and everyone is a consenting adult in theory, but the reality is that those industries just hurt people and concentrate wealth among people who are willing to cause harm. We're not interested in working with people who are suckers at best and mercenaries at worst.

There is negligible transaction volume in cryptocurrencies. If no one is transacting in them, then they are a solution in search of a problem.

Why exactly is Coinbase your 'dream company'? If they are basically a brokerage that deals with a particular asset type, then what about Coinbase differentiates them from e-trade, Charles Schwab, Robinhood or any other brokerage?

Working at a brokerage was not my idea of a dream when I was looking for an internship many years ago. I'm curious to know why it's your dream.

Coinbase will still exist in the fall. It will likely be a significantly smaller company than the one you applied to, but I'm sure the engineers there will try to make you feel welcome.

Coinbase ended March with $6.3 billion in cash. The companies burn rate is $1.5b PER QUARTER.

Do your internship and get the "dream company" thing out of your system. Try to get offers from other companies. Re-evaluate when your internship is up. If they have gotten burn under control, consider accepting an offer.

Hi, I would like to comment from an investor perspective.

First of all, Coinbase was a gullible company, but nowadays you can buy and sell virtual currency on other applications.

Secondly, Coinbase does not consider interest income as a business model, and most of Coinbase's revenue comes from trading commissions. They seem to think that they can make do with only sales from transaction fees. However, I think this is a big risk.

Fidelity has applied for approval of the bitcoin ETF. If this Bitcoin ETF is approved in the near future, Coinbase's business model will be torn to shreds. Fidelity allows you to trade ETFs with "zero commission" whereas Coinbase charges a transaction fee.

In addition, the virtual currency boom will subside with the recent crash in the price of bitcoin. When that happens, sales from virtual currency trading commissions will also slow.

Therefore, Coinbase should suffer in the future, and I believe that if a bitcoin ETF is approved in the future, it will be in a very difficult situation.

I do not know if the company will go bankrupt within 6 months, but I think you should work with a full understanding of the above risks.

> Coinbase is my dream company and seeing the public perception is making me second guess it.

Many people have 'dream companies' that turn out to be 'nightmares'. Don't put all your choices in only one company. There are others that are better than Coinbase that are not in the public eye.

The problem with Coinbase is that their stock is tied and correlated to the price of Bitcoin.

> So many people keep saying they will go bankrupt in 6 months

Does that mean that they are right? I certainly don't think so.

Last year, many people said lots of funny things, like 'Do you think BTC is worth $500k? If so buy Coinbase.' [0], 'This isn't even close to what will be the all time high' [1], 'Doge to $1 by September 2021' [2] and after replying to tell everyone to wait for it to crash then you have 'What if the current bull market goes to $200k, and then the bear market retreats to $100k?' [3].

Fast forward 1 year, what do you think they will be saying now?

In fact, we will all find out why Coinbase didn't shut down in December. Coinbase isn't just an exchange.

[0] https://news.ycombinator.com/item?id=26262243

[1] https://news.ycombinator.com/item?id=25776080

[2] https://news.ycombinator.com/item?id=27206314

[3] https://news.ycombinator.com/item?id=26262266

I'm a crypto cynic, but to know Coinbase's long-term viability you'd have to tell the future about:

- Whether major governments will strangle the life out of crypto with effective regulation due to public sentiment turning against it

- Whether the volatile crypto market will reverse its current longer-term trends

- Whether crypto will become so unfashionable that the current user base stops paying companies like Coinbase (or run out of money to do so)

- How much of a squeeze the coming recession is going to put on risky companies

In other words, it's impossible to predict.

I don't think anyone can answer that for you.

My advice would be to have a diverse skill set and be ready to work on things that don't involve crypto/DeFi if that's where the market goes.

https://news.ycombinator.com/item?id=31781650

I'd be most concerned that the internship won't exist in the fall and that I'd have to scramble to find something else. :)

But if it does, I say go for it. Experience is experience and if you like the field, it'll be easy to transfer.

Get your cash this summer. Even if you take a return offer, you should quit 2-3yrs in anyways and go elsewhere. Best advice I ever got in college is that a job's lifetime is about that long. Especially starting out.

Yes but the business will pivot to focus on USDC redemption, exchange, and KYC. DEX offers better prices for exchanges/yields and non-custodial wallets are preferable.

Nothing to worry about, Coinbase will be around forever. Trust me, I worked at Lehman Brothers.

(In fact I was an intern just like you, back in 2006!)

No, it won't. I would join FTX if you want to work in crypto. If not, join apple or Microsoft. They are the only good safe play for next few years among MANGA.

I think so, people still want to gamble.

All crypto is a scam and as such, all crypto companies are a scam. Get your feet wet, learn what you can -- and get out ASAP. The numbers others tout like "Coinbase ended March with $6.3 billion in cash. The companies burn rate is $1.5b PER QUARTER." only has relevance for companies where you can trust accounting. Crypto companies have earned the exact opposite of trust. Yes, it's a public company but that means nothing, even before bitcoin public companies were caught red handed. Much, much bigger companies, even.

Do not accept stock or crypto as compensation, only cold hard cash.

Look at it this way: there's a non-zero chance that they ARE involved in something shady, as danielmarkbruce mentions. Or that they'll be unwittingly dragged into something that didn't look like a scam, but really was. Or even worse, was on the up-and-up at the start, but slowly morphed into a scam.

If that happens, you will be tainted. Probably, because it was your first job out of school, it won't be permanent. You can just tell your next employers that you were too naive to pick up on it.

The other risk is that you'll pick up a whole range of skills that are effectively worthless in the job market in a few years. Or not. I have no way of knowing.

All in all, then, I don't see why you'd want Coinbase on your resume, when you could have something that's an unequivocal plus.