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The market for non-fungible tokens (NFTs) could eclipse that for cryptocurrencies, Brian Armstrong, co-founder of crypto exchange Coinbase Global, said in a conference call last week.
A non-fungible token is a unique collectible traded and stored on the web, the digital equivalent of a painting, celebrity’s autograph, or baseball card.
Coinbase will launch its own NFT marketplace by next summer, Armstrong said.
“This is going to be a very large area for crypto in the future, and it already is today,” Armstrong said. “It could be as big or bigger” than Coinbase’s cryptocurrency business, he added.
The new platform will include an Instagram-like social medium where traders and collectors can show their wares and follow profiles.
Coinbase makes its money by charging fees to traders. Fees for using the new NFT platform probably will be about 2.5 percent, akin to the fees of other NFT hubs, Bloomberg said.
Coinbase is seeking to diversify and expand its customer base to buoy revenues when crypto trading is quiet.
“This product suite could materially add to [Coinbase’s] revenues and would be a great diversification add,” Needham & Co. analyst John Todaro said to Bloomberg.
After announcing plans for its NFT platform last month, Coinbase received more than 2.5 million requests to sign up, it reported.
OpenSea, now the largest NFT trading hub, had about 236,000 unique user addresses active on it during the 30 days ending 10 November, according to data service DappRadar, a period in which the platform hosted $2 billion in transactions.
Coinbase is an investor in OpenSea.
NFTs are trending in the online universe.
Twitter has recently said it will allow users to authenticate NFT art in their profiles and has hired noted crypto engineer Tess Rinearson to lead a group focused on blockchain technologies.
Meta Platforms Inc., formerly called Facebook, is testing a new crypto wallet for international money transfers, which could also be used to store NFTs.
Coinbase’s planned new NFT hub “helped to ease concern” that the company’s $1.3 billion in third-quarter revenues fell below expectations, Bloomberg said.