In recent weeks, the cryptocurrency exchange has announced partnerships with the , , and announced its own . The company wants in on the creator economy, but it wants to profit off the same culture that it has struggled to support.
From a pure business perspective, these moves make perfect sense.
Coinbase is the de facto exchange for cryptocurrency. Since announcing the NFT marketplace, the waitlist is longer than the active users on DeepSea, the most popular NFT marketplace at the moment. It’s a smart brand extension.
Coinbase is already a step in the customer journey for NFT purchases, so this marketplaces captures more value and reduces friction for customers. Plus, both NFT marketplaces and crytocurrency exchanges charge transaction fees for its primary revenue stream, so the business models are aligned.
Plus, UnitedMasters, NBA, and WNBA all capture the rise of cryptocurrency in Black culture. UnitedMasters is especially popular with hip-hop artists (who can encourage their fans to use the platform). And both the NBA and WNBA have a majority Black players and plurality of Black fans. Coinbase will likely lean into hip-hop culture the same way Cash App did. It it wants to be the default option for the folks who say “pay me in Bitcoin.
Coinbase’s stock is approaching its IPO peaks, so the markets has responded well. But cultural partnerships like these need cultural alignment. And Coinbase’s track record has been questionable at best.
Here’s a brief timeline:
– June 2020: a group of Coinbase employees walked out after CEO Brain Armstrong did not initially make a statement in the wake of George Floyd’s murder
– September 2020: Armstrong wrote a Medium post that says that the company won’t engage in societal and political issues because it is “unrelated to our core mission, because we believe impact only comes from focus”
– October 2020: 60 employees (5%) left the company after Armstrong’s remarks.
– November 2020: New York Times reports on struggles that Black employees at Coinbase faced, including racial and discriminatory treatment.
Companies should love Black people the same way that they love Black culture. Coinbase is not alone here, but it’s another example of the disconnect. Just because Nas and Snoop Dogg cashed out on its IPO doesn’t make it better for the actual employees.
The good thing is that Coinbase’s partners likely want the same. UnitedMaster, NBA, or WNBA wouldn’t have partnered with them otherwise. It could be a great opportunity to have both internal and external culture aligned.
These challenges may seem less relatively impactful for its NFT launch, but Coinbase could soon become the destination for hip-hop or basketball stars selling NFTs. The more aligned its culture is, the easier that transition will be.
Read more about Coinbase’s plans in The Verge