A leading cryptocurrency exchange platform announced plans to enter the red hot NFT market Tuesday.
What Happened: The non-fungible token space could get a huge player with the entrant of Coinbase Global Inc COIN.
Coinbase said it plans to launch an NFT platform called Coinbase NFT that will allow its users to mint, collect and trade NFTs. A waitlist is currently available for early access to the platform.
“Just as Coinbase helped millions of people access Bitcoin for the first time in an easy and trusted way – we want to do the same for NFTs,” the company said.
The Coinbase NFT platform will support Ethereum ETH/USD based ERC-721 and ERC-1155 standards at launch with plans to add additional NFTs later.
Coinbase ended the second quarter with 68 million verified users, 8.8 million monthly transacting users and over 9,000 institutional customers. Coinbase supports 83 crypto assets for trading.
The emergence of other crypto assets into NFTs and Coinbase's support of them could lead to the platform being more user friendly for buying and selling NFTs with different cryptocurrencies including Ethereum and Solana SOL/USD.
The company sees the expansion as an extension of its brand and a way to tap into the “creator economy.”
Why It’s Important: The NFT market hit $10 billion in sales volume in the third quarter, according to DappRadar.
The current leader in the NFT marketplace space is OpenSea with competition from Rarible, Super Rare and others. OpenSea faced troubles earlier this year with insider trading allegations and has seen criticism for its customer support and small employee team needing to expand.
Coinbase relies heavily on exchange fees from the buying and selling of cryptocurrencies. The NFT platform could create a new revenue stream and help the company diversify its financials.
Given its large user base, Coinbase could be able to capture meaningful market share relatively quickly and look to partner with top projects and artists on exclusive NFTs.
Coinbase is also expanding its Coinbase Card through a partnership with Visa Inc V that could bring additional customers to its platform.
COIN Price Action: Coinbase shares are down 3% to $248.62 on Tuesday.
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