00:00It's been a rough start to this year for this company, but I have to imagine when you parse
00:04through some of the fourth quarter numbers when it comes to transactions and revenue that given
00:09the slump that we've seen across crypto, maybe this wasn't too surprising. Well, it shouldn't
00:15have been surprising. I mean, there's quite a bit of transparency with regard to spot trading
00:20volumes in particular and across its whole platform. So, you know, we had anticipated that
00:27the fourth quarter numbers would be soft. But if you take a closer look, there are actually some
00:33silver linings within Coinbase's numbers. In particular, if you look at the institutional
00:39platform during the quarter, you know, you saw an increase of 37 percent quarter over quarter
00:46in terms of revenues. The main driver of that was crypto derivatives reflecting the first full
00:54quarter in which the company's acquisition of Deribit was in its numbers. That bodes very well
01:00for the institutional part of the platform going forward. We also saw on the stablecoin front
01:06that the company's revenues generated from stablecoins and it is beneficiary of a portion of the earnings
01:17on the float underlying the UDSDC stablecoin. That was up three percent sequentially. So not all bad news.
01:26Well, I'm curious, you know, what does diversification look like for a business such as Coinbase? Because
01:31we got Robinhood earnings a little bit earlier this week. And as you might expect, I mean, when it comes
01:36to their crypto business, revenues were a little bit disappointing. But Robinhood isn't just crypto.
01:42Of course, they have equity trading and they've also been pivoting into prediction markets as well.
01:47But when it comes to Coinbase, how can they diversify to the same extent? And do you think
01:52that they need to? Well, I definitely think that they need to because an over-dependence on retail
01:58trading is not a future that you want to have, especially if the fees associated with trading
02:05begin to go in the direction of traditional brokerages, which is to say move towards zero over
02:12time. You know, I think there's an understanding that that's the case. That's why we've seen
02:16diversification. In fact, Coinbase has some overlap with Robinhood on a couple of those fronts.
02:22It is moving into the traditional equity space. It's moving into the prediction market space.
02:28But it even goes beyond that. I think it's important to note that as much as Coinbase's stock price
02:35is highly correlated with the prices of crypto, its business or the underlying value of its business
02:43really is not. And, you know, we believe that over time, especially with the company's base layer
02:49to blockchain, the earnings that it could theoretically get off of that once it's moves to monetization,
02:56you know, that in and of itself, we believe, is a very meaningful potential driver of growth going forward.
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