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Coinbase posts huge profits, days before its public listing

U.S.-based cryptocurrency exchange Coinbase announced their 2021 first-quarter earnings yesterday, revealing a profit of $730-800 million and revenue of approximately $1.8 billion.

The results embark a staggering quarter by the firm, overshadowing their previous performance of last year’s. The results also showed that Coinbase’s active user base has increased to 6.1 million. All this is likely to boost the company’s performance on the imminent direct listing on 14th April.

The company’s superlative Q1 performance will drive out the price of Coinbase shares, which were at an average price of $343.58 in private transaction b/w January and March. Also, the firm’s gaudy earnings and returning profits set it apart from other high profile startups like Uber and DoorDash, both of which are presently stuck in losses.

All this sounds refreshing in the crypto industry, which has seen highly cyclical days having downturns turning assets upside down and trading volumes tumbling by about 80%. In its earnings announcement, the company has acknowledged the aspect of ‘volatility’ in the crypto sector and stated that the company will invest in its operations even if prices do fall.

The company stated,

“This revenue unpredictability, in turn, impacts our profitability on a quarter-to-quarter basis. In terms of expenses, we intend to prioritize investment, including in periods where we may see a decrease in Bitcoin price.”

Coinbase did not provide profit or revenue guidance for this year, but did provide predictions about the number of “Monthly Transacting Users.” citing 7 million as a “big” figure, 5.5 million as “medium” figure and 4 million as “short” figure. This can be compared with the average of 2.8 million active users in the last quarter of 2020.

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