In preparation for its debut on Nasdaq next week, the cryptocurrency exchange Coinbase announced on Tuesday that sales in the first quarter had increased nine-fold over the previous year, due to a historic price increase for Bitcoin.
Revenue in the reporting period rose from $ 190.6 million in the year-ago quarter to around $ 1.8 billion, Coinbase said in a press release. The results are preliminary and unchecked. Net income increased from $ 31.9 million a year ago to $ 730 million to $ 800 million. Coinbase has 56 million verified users.
Coinbase is poised to become the latest tech company to hit the market with a massive valuation, capitalizing on the continued growth of the sector despite general economic troubles due to the coronavirus pandemic. Trading in the private market valued the company at $ 68 billion, a number that climbs to about $ 100 billion considering a fully diluted stock count.
In the past seven months, the software provider Snowflake, the food delivery app DoorDash, the room sharing website Airbnb and the games platform Roblox went public. Their market capitalization is currently between $ 40 billion and $ 113 billion.
Coinbase is unique in that its rating upgrade reflects the trajectory of the top cryptocurrencies. Bitcoin is up about 700% over the past year, while Ethereum is up more than 1,100%.
Bitcoin and Ethereum last year
Coinbase announced last week that the SEC approved the direct listing, which is scheduled for April 14th. The company has announced that it will register nearly 115 million Class A common shares trading under the ticker symbol COIN. In the case of direct listing, the issuing company waives the sale of new shares and instead allows existing stakeholders to sell their shares to new investors.
While Coinbase today relies heavily on attracting users who store and trade the two major cryptocurrencies, the company is betting on developing a larger ecosystem of crypto-related assets in the years to come.
“We expect significant growth in 2021, driven by transaction and custody revenues, as institutional interest in the crypto asset class has increased,” the company said in the press release.
In the first quarter, Coinbase said it had 6.1 million monthly transaction users (MTUs). Looking at the year as a whole, three possible scenarios for revenue are identified, as much of the business comes from these transactions.
Rising market values could result in MTUs of 7 million, Coinbase’s most aggressive estimate. In the middle range, MTUs would land at 5.5 million in a flat crypto market. And the most conservative forecast in the event of a price drop is 4 million MTUs.
– MacKenzie Sigalos from CNBC contributed to this report.
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