What happened
Shares of cryptocurrency exchange Coinbase Global (COIN 2.66%) were up on Wednesday, thanks to renewed hopes that speculative investments like cryptocurrency could see improved returns in the coming year. And it's also thanks to a glimpse into Coinbase's potential growth outside of its core business operations. As of 2:45 p.m. ET today, Coinbase stock was up 5%.
So what
The Federal Reserve raised interest rates 0.75% today, giving investors greater hope that the committee is getting inflation under control. The market believes this is good for speculative investments like cryptocurrency, and it seems like Coinbase investors are slightly more optimistic today than yesterday because of this.
NASDAQ: COIN
Key Data Points
Perhaps the bigger thing today for Coinbase was its blog post regarding Coinbase Cloud. Cloud computing allows businesses to tap incredible hardware and software without building out their own infrastructure. And this is what Coinbase is offering in the cryptocurrency space.
One of Coinbase's cloud products is called Node, and it's been available to Web3 businesses for a while now. However, it's now offering a version of Node to developers for free. This allows more people to adopt Coinbase Cloud. And if these developers are successful and need a little more power, they can upgrade to an enterprise account.
Now what
Coinbase Cloud is a priority for Coinbase because it can diversify its revenue away from cryptocurrency transaction fees. Revenue for this segment of the business is recorded in Coinbase's Other Subscription and Services Revenue segment. In the second quarter of 2022, this segment generated revenue of $21.8 million, up 66% year over year and a clear testament to its progress. However, it also accounted for less than 3% of total revenue, showing that Coinbase still has a long way to go.
