In a preliminary disclosure of Q1 results, Coinbase Global Inc. – one of the largest crypto exchanges in the world – announced that its first-quarter profits are expected to be more than double what they were for the whole of 2020. The press release shows that Coinbase’s Q1 net profit should be between $730 and $800 million.
Coinbase generated $1.8 billion in revenue during the first three months of 2021 – half a billion more than its total 2020 revenue. The crypto exchange had 56 million verified users in Q1, out of which 6 million were monthly active users. Trading volume also nearly doubled – $335 billion compared to $193.1 billion at the end of 2020. Besides serving as an exchange, Coinbase also provides cryptocurrency custody services.
This disclosure comes a week before Coinbase’s direct listing as the first crypto exchange on Nasdaq. Coinbase will forego a traditional IPO, as the company is already well-known and extremely profitable.
Coinbase cautioned that these results are preliminary and unaudited. The massive surge in cryptocurrency value, namely Bitcoin and Etherum, drove the exchange’s growth. Bitcoin’s value has doubled since the beginning of 2021, while Etherum saw a 180% rise. Coinbase itself warns that crypto prices are highly volatile, which is why the company measures performance over monthly cycles, not on a quarterly basis.
According to some analysts, Coinbase could have earned $2 billion in total just by buying Bitcoin in 2013 with seed money and holding it.
The company has not made any predictions about Q2, but it expects ‘meaningful growth’ in 2021, illustrated through three possible scenarios for the number of monthly transacting users in 2021. The most pessimistic puts the number at 4 million, while the optimistic expectation is 7 million.
Strengthened by these impressive numbers, Coinbase’s private market valuation reached $100 billion.
