Coinbase Revenue Hits $1.8 Billion With The Help of Major User Increase

Thursday 08 April 2021, 9:00 AM AEST - 1 week ago

Cryptocurrency exchange Coinbase reveals it has reached $1.8 billion in total revenue as well as a massive 117% increase in monthly trading users in just one quarter.

A recent report by Coinbase, shows their first quarter estimated results, before next weeks Nasdaq listing. The increase in users was one of the factors propelling the approximate net income of $730 million to $800million.

Numbers Are Looking Good for Coinbase

  • 56 million verified users
  • Active users on Coinbase jumped from 2.8 million in the fourth quarter of 2020 to 6.1 million in the first quarter of 2021.
  • Assets on Platform of $223 billion, representing 11.3% crypto asset market share (includes $122 billion institutional assets)
  • Trading volumes topped $335 billion in Q1. For all of 2020, trading volume was $193 billion.

The report also gave an outlook for their monthly transacting users based on three different performance scenarios:

  • In the “high” scenario, Coinbase would average 7 million Monthly Transacting Users (MTUs) if there is an increase in crypto market capitalization, and with moderate to high crypto price volatility, MTUs would continue to grow for the remainder of 2021.
  • The “mid” scenario, Coinbase would average 5.5 million MTUs if the crypto market is flat, with a modest decline in MTUs from Q1 2021.
  • The “low” scenario, Coinbase would average 4 million MTUs if market capitalisation decreases to that of the 2018 bear market, and “MTUs will decrease in a corresponding manner and end 2021 at similar levels to Q4 2020.”

Making Preparations for Retailers And Institutions

Coinbase’s technology and development expenses and general and administrative expenses are going to be between $1.3 billion to $1.6 billion, excluding stock-based compensation, in 2021 – showing lots of investment into the platform.

On the retail side, the company will be adding more assets and giving people more access to decentralized finance (DeFi) applications, Coinbase CEO Brian Armstrong said during Tuesday’s earnings call. Haas said she expects the average net revenue per user to reach new records in 2021.

For the last two years we’ve seen average net revenue per MTU [monthly transacting user] range between $34 and $45 per month.

Alesia Haas, CFO of Coinbase

On the institutional side, the company will continue to build out its prime brokerage offering and use its Bison Trails acquisition to create what Armstrong called the “Amazon Web Services for crypto.”

How do you have users doubling and growth three times that? It happens because volume per user also increased. That’s the increase in the price of bitcoin.

James Friedman, senior fintech research analyst at Susquehanna International Group

Sales and marketing are also planned to get between 12% and 15% increase. The numbers in this report seem to attest to a company that is thriving in the emerging crypto economy.

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