Market Recovery Drives Strong Performance: Coinbase’s Q1 Exceeds Expectations
In addition to cryptocurrency prices, the operational status of exchanges serves as a true “barometer” of the crypto industry. Coinbase, the leading US cryptocurrency exchange, has released its Q1 2024 financial report. The overall market rally, coupled with the launch of a Bitcoin spot ETF, has brought significant growth to Coinbase, with both revenue and profit surpassing expectations and delivering impressive results.
Coinbase is the first publicly listed cryptocurrency company in the US and also the largest cryptocurrency exchange in terms of trading volume. According to the company’s report, Coinbase’s total revenue for Q1 was approximately $1.6 billion, surpassing analysts’ expectations of $1.3 billion. Net income stood at $1.2 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $1 billion, showing growth compared to the same period last year, which was $977.5 million.
However, due to the rapid increase in cryptocurrency trading volume, consumer trading volume skyrocketed by 93% compared to the previous quarter, forcing Coinbase to increase its expenses to maintain its trading infrastructure.
Interestingly, Coinbase has uploaded the earnings results of this quarter onto the blockchain, allowing anyone to view Coinbase’s latest financial performance by minting these NFTs.
Further reading:
【Infographic】Is it Springtime for Cryptocurrencies? Coinbase Reports its First Profitable Quarter with a 45% Increase in Q4 Net Income
Highlights of Q1: Significant Growth in Institutional and Consumer Trading Revenue
Coinbase’s revenue and profit primarily come from “transaction fee revenue,” which includes transaction fees from both retail investors and institutional investors. Other revenue sources include “subscription and service revenue” from blockchain mining and custodial service fees. Therefore, market interest will greatly affect the company’s profitability.
Starting earlier this year, the US approved the issuance of a Bitcoin spot ETF, followed by a surge in the Bitcoin and cryptocurrency market. Overall trading volume increased significantly compared to the same period last year, leading to a surge in Coinbase’s transaction fee revenue.
In Q1, Coinbase indeed saw growth in both types of “trading revenue” and achieved good results.
Revenue from retail investors, which is Coinbase’s main source of income, exceeded $935 million, showing a growth of 99% compared to the previous quarter.
Institutional trading revenue also grew by 113% compared to the previous quarter, reaching $85 million. Additionally, the trading volume and active customer count on Coinbase Prime, the main broker solution for institutional investors, grew by 105% to reach $256 billion, setting a new record.
Coinbase stated that the Bitcoin ETF and the strong market conditions in Q1 attracted more investors, with nearly 40% of institutional clients using at least three of Coinbase’s platform products in the first quarter.
Furthermore, “subscription and service revenue” reached $510 million, a 41% increase compared to the same period last year, indicating that Coinbase continues to expand its revenue sources beyond transaction fees.
Coinbase’s Q1 performance is impressive, and the company also reported generating over $300 million in trading revenue in April, with estimated subscription and service revenue for Q2 ranging from $525 million to $600 million.
References:
Cointelegraph, Bloomberg, The Block