EXECUTIVE SUMMARY:

Could crypto prices free fall? Market uncertainty prompts speculators to propose a variety of different theories.

Coinbase, the internationally known San Francisco-based start-up, serves as a trading platform for Bitcoin, Etherium and other cryptocurrencies. Crypto experts with the company predict a rollercoaster market in the next eight months. A steep drop the Bitcoin price may ensue.

In 2014, Bitcoin sold for around $50.00 a piece. Across the past half year, the Bitcoin price rose from $10,600 to over $57,000 per Bitcoin. Companies from Tesla to Paypal have purchased reserves of the coin so that they can accept crypto payments. They want for customers to be able to pay for vehicles or everyday items using Bitcoin.

Coinbase earns profits through transactions on its platform; people are continually purchasing and selling cryptocurrencies. With 6.1 million users, the platform is expected to grow.

Regarding Bitcoin forecasts, “Given the inherent unpredictability of our business […] we are providing a range of possible scenarios for full-year 2021,” says a Coinbase spokesperson.

Market capitalization for crypto may increase, pushing the Coinbase user base, known as MTUs, into the 7 million range. This is the “high” growth scenario.

A more modest growth scenario “assumes flat crypto market capitalization” and “low to moderate volatility” in crypto prices. This could potentially reduce MTUs to under 6 million, Coinbase predicts.

Bitcoin’s price dropped from a high of more than $19,000 in 2018 to less than $4,000 by the close of that year. Could this worst-case scenario play out in 2021? “In this scenario, we assume MTUs will decrease in a corresponding manner and end 2021 at similar levels to Q4 2020”.

The recent upswing in crypto prices is largely due to Coinbase’s own increase in corporate and retail investor transactions. In March, Coinbase witnessed $335 billion in trading, ultimately yielding $1.8 billion in gains. These crypto prices will result in $700 million to $800 million of net income.

For more on Coinbase market cap predictions and crypto, check out this article about Bitcoin or visit ZDNet. Captial funding for Coinbase comes from prominent venture capital firms. AH Capital Management LLC, Manhattan Venture Partners, Y Combinator and Initialized Capital Management. A total of $539 million has been invested in the company to date.