Executives discuss how Coinbase will benefit from the US’s ‘hostile’ cryptocurrency regulations



  • Bitwise executives claim that Coinbase is benefiting from hostile crypto regulation in the United States.
  • The executive predicts that crypto startups will fail.

coinbase It is reportedly a major beneficiary in the United States’ aggressive enforcement actions in the cryptocurrency space.

Robinhood Crypto is the latest company to receive a wells notice from the US SEC (Securities and Exchange Commission).

MetaMask and Uniswap also recently received Wells notices indicating that the SEC intends to take enforcement action against both companies.

Chairman of the CFTC (Commodity Futures Trading Commission) warned He expects this trend to further intensify “over the next six to 24 months.”

Interestingly, according to Bitwise CIO Matt Hougan, Coinbase is growing amid US regulatory overheating.write his essay Claim An executive on X (formerly Twitter) commented as follows.

“The hostile regulatory environment has created an artificial ‘moat’ for Coinbase’s business, allowing it to maintain very high margins and exceed profits in the short term. ”

Coinbase’s strategy in the face of US regulatory overheating

Take Coinbase’s successful diversification business as an example. Ethereum [ETH] Layer 2 — Base, Bitwise executives added:

“What is impressive is that they are using this opportunity to raise cash (currently at $7.1 billion) and significantly diversify their business (see USDC, Base, International Futures Growth).”

The executive also emphasized that high regulatory costs in the U.S. could stifle competition and discourage new entry into the sector.

“Capture is almost perfect. Regulatory costs are too high for crypto-native startups to compete (think Coinbase’s legal costs), and regulatory risks are too high for traditional companies to be tempted. Too expensive (look at what’s happening with Robinhood).”

Regulatory pressure will further solidify Coinbase’s market share as the leading place to buy and sell digital assets and tokens in the United States.

As of Q4 2023, Coinbase commands over 75% of the US market share.

but, uniswap [UNI], MetaMask, and even Robinhood Crypto are ready to fight back against the SEC. In response to SEC Wells’ notice, Robinhood CEO Vlad Tenev said: swore that,

“If necessary, we intend to use our resources to litigate this matter in court, with the goal of defending our crypto business and establishing regulatory clarity in the United States for the benefit of our customers. .”

It remains to be seen how Coinbase’s market share will be affected if these beleaguered crypto companies win against the SEC.

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