Coinbase co-founder and CEO Brian Armstrong speaks at TechCrunch Disrupt SF 2018.
Steve Jennings | Getty Images for TechCrunch
In preparation for its debut on the Nasdaq next week, cryptocurrency exchange Coinbase said on Tuesday that revenue in the first quarter increased about nine times from last year, driven by a historic rally in the price of bitcoin.
Revenue from this period rose to about $ 1.8 billion from $ 190.6 million in the same quarter a year earlier, Coinbase said in a press release, adding that the results are preliminary and unaudited. Net income rose between $ 730 million and $ 800 million from $ 31.9 million a year ago. Coinbase said it has 56 million verified users.
The company is hosting a webcast to discuss its financial results starting at 4:30 p.m., Eastern Time.
Coinbase is poised to become the latest technology company to hit the market with a massive rating, capitalizing on the sector’s continued growth, despite the wider economic struggles caused by the coronavirus pandemic. Private market trading valued the company at $ 68 billion, a number that rises to about $ 100 billion when a total number of diluted shares are taken into account.
In the last seven months, software provider Snowflake, the food delivery app DoorDash, the Airbnb sharing site and the Roblox gaming platform have gone public. Their market limits are currently between $ 40 billion and $ 113 billion.
Coinbase is unique because the increase in its valuation reflects the trajectory of the top cryptocurrencies. Bitcoin has grown by about 700% in the last year, while ether has grown by over 1,100%.
Bitcoin and ethereum in the last year
CNBC
Coinbase said last week that the SEC approved the direct listing, which is set for April 14. The company said it intends to register nearly 115 million shares of the ordinary Class A shares, which will be traded under the COIN symbol. In a direct listing, the issuing company waives the sale of new shares and, in return, 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 coming years.
“We expect significant growth in 2021, driven by transaction and custody revenues, given the increased institutional interest in the cryptocurrency class,” the company said in a statement.
In the first quarter, Coinbase said it has 6.1 million monthly transaction users (MTUs). Given the whole year, it sets out three possible scenarios, which will determine revenue, as much of its business is derived from these transactions.
The increase in market values could result in MTUs of 7 million, Coinbase’s most aggressive estimate. In the medium term, assuming a flat cryptocurrency market, MTUs would land at 5.5 million. And the most conservative prediction, if prices fall, is 4 million MTU.
– MacKenzie Sigalos of CNBC contributed to this report.
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