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The Coinbase smartphone app.

Tiffany Hagler-Geard/Bloomberg


Coinbase global
it is

the expansion into non-fungible tokens is underway, with an initial wave of users gaining access to an NFT marketplace on Wednesday before the service rolls out more widely in the coming weeks.

It is a significant moment because


Coinbase

(ticker: COIN) is diversifying its business beyond cryptocurrencies, a move that could see it dominate in digital asset trading more broadly.

NFTs are a type of digital asset, often a work of art, that has taken the world by storm in the past year. Some, like Bored Apes and CryptoPunks, have become something of a cultural icon and have changed hands for hundreds of thousands or even millions of dollars.

With its recognizable brand and large customer base, Coinbase poses a challenge to privately held OpenSea, the largest NFT exchange. Still, Wall Street can’t comment on Coinbase’s outlook.

The group will have to spend big to grow its business at a time when interest in digital assets is slowing, and it remains to be seen how much NFT sales can change a company’s bottom line. In response to a request from BarronsCoinbase declined to disclose financial details related to its NFT business, such as its pricing structure or the total amount of expenses it spends to grow the business.

Coinbase invited customers to join a waitlist for its NFT launch on October 12 last year. The NFTs available on Coinbase are those hosted on the Ethereum blockchain network.

For now, Coinbase plans to have no transaction fees — OpenSea, for its part, collects 2.5% of NFT sales — and said it is working with 0x, an Ethereum blockchain developer, to reduce fees required for transactions through the Ethereum network.

Coinbase stock rose 1.5% in premarket trading in the United States, but has fallen nearly 40% so far this year.

Write to Jack Denton at [email protected]