Analyzing FTX’s 2021 growth in a Coinbase context –


During the weekend, CNBC reported: a series of revenue and earnings figures from FTX, a global cryptocurrency exchange that raised a mountain of capital over the past year and is currently expanding its product portfolio. Its founder, Sam Bankman-Fried, has been a major player in the crypto market in recent months and has been involved in several deals as the decentralized economy weathers a slowdown amid a barrage of bad news.

The data CNBC uncovered paints a picture of strong growth, but limited one — it didn’t get Q2 numbers. The information, FTX’s lagging market cap, and recent data on Coinbase’s financial performance led to an interesting question: is Coinbase cheap or is FTX overvalued?

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Since we are dealing with one private company and one public concern, we will of course have to deal with information asymmetry. Coinbase is public, meaning we basically have all of its data, making the US company an important barometer in our ability to understand the economics of crypto trading..