Coinbase CEO Brian Armstrong said the New Market for NFTs could be Bigger than his Cryptocurrency Business

Coinbase's CEO made a bold statement in a conference call on Tuesday after the nation's largest  digital asset exchange generated nearly $1.3 billion in third-quarter revenue. The announcement helped quell fears that earnings were below expectations, despite revenues more than five times higher than last year. Coinbase plans to open its own NFT marketplace where people can trade digital art and other items in the next or second quarter.

The company wants to provide users with an integrated experience to buy and store assets on platforms that can interact with social media  like Instagram rather than traditional marketplaces like EBay Inc.

Since Coinbase first announced in October, it has received more than 2.5 million emails requesting subscriptions to its exchange. According to data tracking system DappRadar, OpenSea, the largest NFT market in existence, has distributed around 236,000 unique user addresses  in the last 30 days. Coinbase is an investor in OpenSea.

Users can showcase their NFTs on the Coinbase site and ask others to subscribe to their profile and receive updates. These capabilities can be key to spreading awareness and engaging users at a time when many social media platforms are entering the NFT market. Twitter Inc. We recently announced that users will be able to see NFT art in their profile.

The social site hired Tess Rinearson, who previously led software development for projects like Cosmos, to lead a group specializing in cryptography and related technologies. Meanwhile, Meta Platforms Inc., formerly known as Facebook, is trying out a new international cryptocurrency remittance  wallet that can also be used to store NFTs.

“We are very excited about NFTs,” Armstrong said on Tuesday. This is going to be a very large area for crypto in the future and it is already happening today.” It could be “greater or bigger” than the company’s cryptocurrency business. Owen Lau,  analyst at Oppenheimer & Co, said, “When the NFT Marketplace feature launches this year, it is 2023 It can play a significant role in increasing COIN revenue in the next year.” In general, the NFT market has grown rapidly over the past year.

According to DappRadar, OpenSea alone has traded nearly $2 billion in  volume in the last 30 days. Coinbase derives most of its revenue from transaction fees from retail users. This means that during periods of high volatility and falling prices, if small traders are left unattended, Coinbase's profits may decrease. To increase predictability, Coinbase is working to diversify its revenue by attracting institutional traders and offering and providing other services such as NFT trading. Coinbase hasn't disclosed the fees for the NFT feature, but according to Needham & Co analyst John Todaro, it's likely to match the fees charged by OpenSea, or about 2.5% of the value of the transaction.