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SBF
@SBF_FTX
Replying to
@SBF_FTX
3) Yesterday I looked into Bakkt's SPAC. It did not look very good. idk maybe it'll be worth $10b soon because fuck everything.
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SBF
@SBF_FTX
1) BAKKT is about to go public. There are a number of "interesting" things in their deck. sec.gov/Archives/edgar
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SBF
@SBF_FTX
5) Well, it's hard to find a lot of them. But, roughly, it looks like they made about $1-2b of revenue last year, had moderately high expenses, and had something like ~50m customers, give or take.
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SBF
@SBF_FTX
6) The first thing that jumps out: FTX traded about 2x what Coinbase did last year. FTX did not make $1.5b of revenue. What's going on there?
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SBF
@SBF_FTX
7) Well, their fees are higher than FTX--something like 4x as high! But that still doesn't explain it.
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SBF
@SBF_FTX
9) Now, I want to tread lightly here--don't throw stones in glass houses! But I tried to buy $8 of BTC. The price I got was... $40,422. BTC is currently trading at $35,250. That's a 14.5% fee. 14.5% is a lot. (Maybe people should check out FTX!)
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SBF
@SBF_FTX
10) Well ok then. So, mostly this is the "Coinbase fee". This isn't a % fee, it's a $ fee; in this case, $0.99. On a $8 trade. So that's 12% right there. The other 2.5%? Well, that's the spread.
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SBF
@SBF_FTX
11) Ok, so now things start to line up more. If they traded $500m/day, and made $1.5b, that means that Coinbase made about 1% on their average trade. Which, presumably, is some blended rate between ~8bps on their "Coinbase Pro" trades, and 1-10% on their app trades.
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SBF
@SBF_FTX
12) A lot of people complain about Coinbase downtime, or lack of features, or ratelimits, or withdrawals. I wonder if Coinbase even cares. Its 'pro' fees can't have been more than 10-20% of its revenue, really: 8bps*$500m*365 = $150m.
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SBF
@SBF_FTX
Replying to
@SBF_FTX
14) So: a) Coinbase does, actually, make real money! This isn't Bakkt 2.0. b) ftx.com/trade/CBSE/USD might be worth a lot. Maybe it shouldn't sell itself short. twitter.com/SBF_Alameda/st But there's another interesting question here. What happens when volumes skyrocket?
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SBF
@SBF_FTX
1) IPOs, listings, and orderbooks: Why ftx.com/trade/CBSE/USD might be good for Coinbase
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SBF
@SBF_FTX
15) For FTX, the answer is pretty simple. Just go to ftx.com/FTT. Last week, FTX had its first ever $2m buy/burn. Today, we're having a $3m buy/burn. More volume has exactly the expected effect.
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SBF
@SBF_FTX
16) For Coinbase.... I'm actually pretty curious. Today, Coinbase has $5b of volume. That's a lot! It's also half of FTX.
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SBF
@SBF_FTX
17) If this kept up for a year, would Coinbase make $300m? Or $15b? *Which* volume goes up? Is it
@AWice
? Or is it his high school classmate buying their first BTC? Is it
@cmsholdings
's bots, or Dan while he's bored in a meeting? Are they paying 1-10bps or 1-10%?
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SBF
@SBF_FTX
18) I don't know! I wish I did. All I can offer is the following. Here are some graphs from FTX.
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SBF
@SBF_FTX
19) On FTX: --Volume is up about 10x from a month ago --Active userbase is up about 1.5x So if FTX is any guide, most of the volume growth is the heavy duty traders; retail growth is smaller. Which would imply that Coinbase's revenue is up more like 50% than 500%.
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SBF
@SBF_FTX
20) But maybe Coinbase isn't like FTX. Maybe Coinbase really did have 10m users load their app to buy $100 each of BTC yesterday, each paying about $3 in fees. That would be, at least from Coinbase's perspective, impressive.
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