Coinbase Stock Pops On Google Deal to Accept Crypto for Cloud

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  • Google has cho­sen Coin­base to process cryp­to pay­ments for select customers
  • Both com­pa­nies are seek­ing to diver­si­fy their rev­enue streams

Coin­base stock jumped dur­ing pre-mar­ket trade on Tues­day on word that Google will enable some cus­tomers to pay for the tech giant’s cloud ser­vices with cryp­tocur­ren­cy, start­ing next year.

The deal will see Coin­base shift its data-relat­ed appli­ca­tions from its usu­al Ama­zon Web Ser­vices’ cloud to Google, CNBC report­ed.

Google will accept pay­ment for cloud ser­vices from a small group of cus­tomers across the Web3 space via a Coin­base Com­merce integration. 

Coinbase’s ecom­merce offer­ing sup­ports 10 dig­i­tal assets such as bit­coin and ether along­side sta­ble­coins USDC and teth­er, as well as meme coins doge­coin and shi­ba inu. 

As with the rest of its cus­tomers, Coin­base would take a cut of Google-relat­ed trans­ac­tions, although the amount of rev­enue it could poten­tial­ly gen­er­ate is unclear. 

Amit Zav­ery, vice pres­i­dent at Google Cloud, told CNBC it had explored deals with mul­ti­ple com­pa­nies before land­ing with Coin­base. Jim Migdal, Coin­base vice pres­i­dent of busi­ness devel­op­ment, said the two com­pa­nies had been con­vers­ing for months.

Coin­base has his­tor­i­cal­ly relied on trad­ing fees to gen­er­ate almost 90% of its rev­enue, and has been work­ing to diver­si­fy its income streams to weath­er the cycli­cal nature of the cryp­to sector. 

Google has sim­i­lar­ly pushed to expand beyond its main rev­enue source: adver­tis­ing. The Big G is now look­ing to poten­tial­ly offer dig­i­tal asset man­age­ment ser­vices via Coinbase’s cus­tody offer­ing Prime, although those plans appear pure­ly explorato­ry for now.

Coinbase stock buoyed more than Google parent 

While Google has long been recep­tive to the rise of cryp­tocur­ren­cies, the firm for­mal­ly flagged inten­tion to expand its own blockchain offer­ings by form­ing a ded­i­cat­ed unit ear­li­er this year.

Sun­dar Pichai, the CEO of par­ent com­pa­ny Alpha­bet, also said the com­pa­ny was “def­i­nite­ly look­ing at blockchain” in a Feb­ru­ary earn­ings call, par­tic­u­lar­ly in rela­tion to pow­er­ing com­put­ing and ser­vices lay­ers for YouTube and Google Maps.

Alpha­bet has also been one of the most active cor­po­rate investors in blockchain firms since as ear­ly as 2017, along­side the likes of Gold­man Sachs and SBI Holdings.

Still, this deal seems far more focused on cryp­tocur­ren­cies specif­i­cal­ly, rather than their under­ly­ing tech­nolo­gies. And so far, mar­kets seem respon­sive to how this could ben­e­fit Coin­base — more than Google.

The exchange’s stock, which is down 73% year to date, rose 5% dur­ing pre-mar­ket trad­ing on news of the deal. The tech-heavy NASDAQ 100, on the oth­er hand, shed 0.25%, along­side Alphabet.


Attend DAS:LONDON and hear how the largest Trad­Fi and cryp­to insti­tu­tions see the future of crypto’s insti­tu­tion­al adop­tion. Reg­is­ter here.


  • David Canel­lis

    Block­works

    Edi­tor

    David Canel­lis is an edi­tor and jour­nal­ist based in Ams­ter­dam who has cov­ered the cryp­to indus­try full time since 2018. He’s heav­i­ly focused on data-dri­ven report­ing to iden­ti­fy and map trends with­in the ecosys­tem, from bit­coin to DeFi, cryp­to stocks to NFTs and beyond. Con­tact David via email at [email pro­tect­ed]

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