Earnings release shows Coinbase made more in Q1 2021 than all of 2020

Crypto exchange Coinbase posted its earnings this morning and showed strong revenue numbers ahead of its April 14 public listing, documents show. The exchange is one of the biggest crypto businesses and one of the first in the US to be offered to the public.

Coinbase posts stellar figures

The release showed Coinbase made over $1.8 billion (revenue) in Q1 of 2021—an amount greater than the $1.1 billion figure for all of 2020 and nearly ten times the $190 million revenue in the first quarter of last year.

BREAKING: Coinbase just reported 56 million users, $335 billion in trading volume, and $1.8 billion in revenue for Q1.

What an absolute beast of a company.

— Pomp 🌪 (@APompliano) April 6, 2021

On the $1.8 billion figure, Coinbase estimated its net income to be in the $730 million to $800 million range and stated its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBIDTA)—a metric used to evaluate a company’s operating performance—approximately $1.1 billion. The total trading volume was $335 billion.

Other metrics showed big growth in the overall exchange business. Coinbase’s verified users have now reached a massive 56 million, with Monthly Transacting Users (MTUs)—or users who actively transact at least once a month—of 6.1 million.

The assets on the platform reached an overall valuation of $223 billion, a figure that represented 11.3% of the $2.1 trillion cryptocurrency market. This included over $122 billion worth of cryptocurrencies belonging to Institutions, the firm said.

Coinbase is now more valuable than Goldman Sachs, who called #bitcoin “not an asset class” last year.

— Documenting Bitcoin 📄 (@DocumentingBTC) April 6, 2021

Crypto cycles and how they affect

The earning aside, Coinbase noted its business was dependent on broader crypto market cycles and that four such cycles were observed since 2010 with a typical duration of 2 to 4 years.

“On average, these price cycles have increased the overall crypto market capitalization significantly from the prior cycle and attracted new users into the crypto economy,” the exchange said, adding that such cycles could be “highly volatile” and that it measured performance over price cycles ‘in lieu of quarterly results.’

Coinbase is pretty much a better company than every financial services incumbent (growth, margins, prospects, etc.)

This makes me happy

— Barry Silbert (@BarrySilbert) April 6, 2021

Meanwhile, Coinbase said a mix of MTUs, market cycles, and Trading Volume, would see their transaction revenue fluctuating in a significant manner, meaning its profitability would be impacted on a quarter-to-quarter basis.

That said, however, Coinbase said it would prioritize investment during such times as the industry still remains in its early stages. 

As for the rest of 2021, the exchange is remaining bullish: “We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class,” it said.

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