Major U.S.-based cryptocurrency exchange Coinbase reported $1.8 billion in revenue and an estimated $800 million in net income for the first quarter of 2021.
What Happened: The company released its Q1 financial results a week ahead of its scheduled direct listing on the Nasdaq, which is a much-anticipated event in the crypto space.
The exchange’s impressive financial results represented a nine-fold increase from the same period last year, where revenue stood at $190.6 million, and net income was a mere $31.9 million.
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
Why It Matters: This significant jump in price can be attributed to the crypto exchange’s 56 million verified users that contributed to $335 billion in trading volume.
Ultimately, the rapid growth in Coinbase’s users comes down to the massive boom that has seen crypto markets rise to a market capitalization of close to $2 trillion.
“We have seen all-time high crypto prices drive elevated levels of user activity and trading volume on our platform,” said Coinbase’s chief financial officer Alesia Haas.
While Coinbase didn’t break down the sources of its total reported revenue, Sam Bankman-Fried, CEO of crypto exchange FTX, estimated that unless the average trading fees are 53 bps, “a significant chunk” of that revenue is not coming from trading fees.
The FTX CEO also went on to state, “This is an impressive financial statement, and a huge step for the industry…. And kudos to Coinbase for waiting to go public until they were consistently profitable and at least somewhat projectable. That’s better than many listings. And it’s a great precedent for crypto.”
Coinbase will be listed on the Nasdaq via a direct listing on April 14 under the ticker symbol “COIN.” The company was valued at $68 billion in a pre-market auction, which Nasdaq will likely use as a reference price when listing its shares.
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