Coinbase's CEO Brian Armstrong revealed the company may soon lay significant emphasis on Coinbase subscriptions.
The current NFT-crypto market crash has sparked questions related to whether crypto will ever recover alongside raising questions like when is the next crypto bull run?
Amid the prolonged crypto winter, Coinbase has suffered the most in terms of revenue while battling bankruptcy rumours and lawsuits. Coinbase's trading fee structure is about to get a big overhaul as its CEO is in process of shifting its focus to a subscription-based model to derive more revenue.
Coinbase CEO wants to shift to a subscription model over transaction fees
Coinbase is trying all things possible to navigate the current crypto winter, which according to him may extend until 2024. In an interview with CNBC, he said:
We all hope it’ll be, you know, 12 to 18 months and a nice recovery, but you have to plan for it being longer than that. And so that’s how we think about it. And we don’t try to get too cute about predicting the future.
However, one key revelation the Coinbase CEO made during his interview was to share his opinion on the subscription-based model. He said Coinbase may soon shift his focus onto revenue from subscriptions and services rather than trading fee revenue.
Armstrong added that the trading fee of the exchange may eventually "erode," like the stock exchange industry. He said Coinbase may need to shift focus to a sturdier model of revenue is necessary to prosper in the long run.
"I'd like to get to a place where more than 50% of our revenue is subscription and services," he said.
According to Coinbase's Q2 Earnings report, Coinbase's subscription-based revenue has grown exponentially up to 18% this year.
The subscription-based portfolio spans diverse offerings, including Coinbase interest income, the firm's premium membership option, blockchain rewards, and fees for storing crypto on the platform on behalf of the users.
Armstrong further hinted that he may soon offer new subscription-based services which according to him are currently under work.
Coinbase's decision to switch its dependency to a subscription-based model might have stemmed from the fact that the exchange is now actively trying to bolster its revenue processes, after reporting net losses worth 70% in its latest Q2 earnings report.
For more articles like this, take a look at our Planet Crypto page.