Bitcoin Rally Sees Coinbase Rake in $1.8bn Revenue in Q1 as Active Users Hit 6.1 million
Popular crypto exchange, Coinbase generated an estimated revenue of $1.8 billion in the first quarter of 2021. The firm revealed this in its estimated financial results for the three months ending March 31, 2021.
The data publication comes days before Coinbase’s expected direct listing on Nasdaq on April 14.
The huge revenue drove the exchange’s net income of approximately $730 million to $800 million. The incredible growth was fueled by the Bitcoin rally that saw the Price of Bitcoin rise above $50,000.
Coinbase added 13 million new users in 3 months
The boom translated to more active users as the unicorn reported a whopping 117% quarter-on-quarter increase in active monthly transacting users.
Active users on Coinbase jumped from 2.8 million in the fourth quarter of 2020 to 6.1 million in the first quarter of 2021. While the total number of people with Coinbase accounts rose from 43 million in 2020 to 56 million in Q1 2021.
The huge influx in users pushed the exchange’s trading volumes to about $335 billion for the quarter. This a significant increase from the $89 billion in volume posted for Q4 2020.
Over $223 billion in assets
Similarly, Coinsbase total assets rose from $90 billion to $223 billion. This represents about 150% increase quarter-over-quarter.
The asset rise which was led by institutions that capitalized on the Bitcoin rally added about $122 billion of Coinbase assets.
Coinbase beastly numbers in Q1 reflects the rising interest in cryptocurrency as the price of bitcoin (BTC, -0.53%), ether (ETH, -1.05%) and other leading assets tick upwards.
According to Coinbase CEO Brian Armstrong, the company will be adding more assets and giving people more access to decentralized finance (DeFi) applications.
2021 outlook – 7 million MAUs, over $ 1 billion in expense
Looking to the remainder of 2021, Coinbase has estimated that it may spend over $1 billion during the year.
“Looking to full-year 2021, in order to scale our operations and to continue to drive product innovation, we expect our technology and development expenses and our general and administrative expenses to be between $1.3 billion to $1.6 billion, excluding stock-based compensation, in 2021.”
Coinbase
The company has also indicated that it will boost its historically strong organic growth with customer acquisition and engagement by increasing investment in sales and marketing this year.
“We plan for sales and marketing to be between 12% and 15% of net revenue in 2021. Lastly, we anticipate transaction expenses will be in the low-to-mid teens as a per cent of net revenue in 2021,” the company said.
The forecast shows that Coinbase is looking at an average of 7 million monthly users if the crypto market capitalization grows throughout the rest of the year.
Similarly, Coinbase CFO Alesia Haas expects its annual average revenue per user (ARPU) to rise toward new records in 2021.
“Our average annual revenue per user (ARPU) ranges from $34 – $44 per month. The low end of that range occurred in 2018, and the high end of the range appeared in 2021. Our annual average revenue per user will likely exceed this range in 2021,”
Alesia Haas, Coinbase CFO
In summary
Coinbases numbers in Q1 were remarkable and shows just how much the company has grown. The firm’s profits rose from the $30 million loss in 2019 to the $322.3 million profits in 2020. Now it is attracting $800 million in just the first quarter of 2021.
The financial results represent the last major step before its expected direct listing on April 14. And based on price data from crypto exchange FTX for its pre-IPO contract, Coinbase’s current implied valuation is $121.7 billion.
This poises the Crypto exchange unicorn for a landmark IPO later this month.
