One week before its initial public offering, Coinbase said the current Bitcoin rally has helped its revenue rocket by 847% during the first quarter.
Coinbase said Tuesday it expects first-quarter revenue of about $1.8 billion, up from $190.6 million for the same period in 2020. Its first-quarter net income jumped between $730 million to $800 million, from about $32 million last year. Assets on the Coinbase platform rose to $223 billion during the first three months of the year, versus $90 billion at the end of 2020.
Coinbase, the largest U.S. cryptocurrency exchange, is scheduled to make its public equity-markets debut on April 14 as a direct listing. The San Francisco-based company could be valued at more than $100 billion.
Coinbase Chief Financial Officer Alesia Haas said during a call announcing first-quarter results Tuesday that the crypto markets have observed four major price cycles since 2010. “We believe we entered the fourth price cycle in late 2020. We do not know where we are, though, in the current price cycle, but we can already see that we expect to reach a peak materially higher than the last all-time high,” she said, according to a transcript of the call.
Bitcoin in March hit an all-time high of more than $60,000, outperforming other asset classes.
Brian Armstrong, Coinbase’s CEO, said the total market capitalization of crypto is now nearly $2 trillion, of which Bitcoin has a 55% share. “But crypto is bigger than just Bitcoin—and Coinbase will ultimately strive to support every legitimate cryptocurrency in the market,” he said.
The surge in crypto helped Coinbase turn in a huge quarter. Trading volume was $335 billion, while verified users were 56 million, up from 43 million at the end of 2020. Monthly transacting users—those retail users who transact in one or more products on the Coinbase platform at least once during a rolling 28-day period—stood at 6.1 million in Q1, more than double the 2.8 million MTUs at the end of 2020.
Institutional interest in crypto has grown. About 55%, or $122 billion, of Coinbase’s $223 billion in assets came from institutions.
Crypto price cycles can last two to four years and can be highly volatile, the company said. The exchange said it measures its performance through these price cycles and not quarterly results. As such, Coinbase didn’t provide any revenue or profit guidance for the rest of 2021. The company expects to rack up about $35 million in one-time expenses in the second quarter due to its IPO. It anticipates expenses between $1.3 billion to $1.6 billion for full year 2021, the statement said.
Write to Luisa Beltran at [email protected]