How Crypto Exchange Coinbase Performed in Q1

Since the pandemic brought us unexpected crypto-mania, some companies have made the most of it. For example, the quarterly profit of cryptocurrency exchange Coinbase soared by more than 20 times from last year.

As the cryptocurrency trading platform capitalized on a boom in crypto prices and interest corresponding from investors in the first quarter of 2021, Coinbase shares went up around 3% on Thursday.

The company went public in a blockbuster IPO debut in April, which is one of the key reasons why many investors believe Coinbase is one of the top stocks to watch in May.

Shares of the company opened at $381 per share during the direct listing in April and was briefly valued for as much as $100 billion, a turning point event for the entire cryptocurrency industry. Excluding the after-hours move, Coinbase stock has fallen about 30.4% since going public on April 14, while the Nasdaq fell 5.3% over the same period.

How did Coinbase do in Q1?
In April, the company’s earnings were $3.05 per share, and revenue $1.80 billion, up from $585 million in the previous quarter. That makes the company’s net profit for the first four months of 2021 over $771 million, more than 24 times higher than last year’s quarter’s profit.

The company considered putting Dogecoin on the earning list since for the last six months, the Shiba Inu dog cryptocurrency that started as a joke was up as much as 26,000%. That was before Elon Musk went on hosting SNL and called Dogecoin a “hustle.”

Similar to Bitcoin, the fate of Coinbase depends on how digital assets perform. Most of the money, approximately 94%, came from transaction fees from trading. Bitcoin almost doubled its prices, while ether prices nearly tripled, the company stated.

The reason the company’s revenue made so much profit is simple. Coinbase’s fees are higher than several other rivals.

CFO Alesia Haas says, “We’re not trying to win on fees. We’re not trying to compete on fees. We’re competing on being the most trusted.”

When asked about the company’s main focus, Haas answered the company was dealing with unprecedented growth in demand, and their focus was making sure that the exchange stayed up.

It would be an understatement to say Coinbase is doing well.

With more than 56 million verified users, as well as unique price moves in the market, trading volume tripled when compared to the previous quarter. And it’s not just verified users. Users transacting monthly more than doubled, from 2.8 million to 6.1 million.

When it came to releasing the earnings guidance for either Q2 or the full year, or the detailed revenue they held back reminding us, “As we have previously discussed, it is important for investors to remember that our business is inherently unpredictable.”

Nevertheless, the company offered guidance of between 5.5 million and 9.0 million monthly transacting users for the full year, depending on crypto prices. The annual average net revenue has been around $35 to $45 for the last two years. The company is predicting that it will exceed this historic mark. And it seems like there is no reason not to trust them. Coinbase is breaking record after record.

The company has been spending heavily on marketing and development to keep ahead of its competitors.