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Home / Business / Coinbase report estimates first-quarter revenue of $1.8 billion, a nine-fold increase

Coinbase report estimates first-quarter revenue of $1.8 billion, a nine-fold increase



Coinbase co-founder and CEO Brian Armstrong gave a speech at TechCrunch Disrupt SF 2018.

Steve Jennings | Getty Images for TechCrunch

In preparation for its debut on Nasdaq next week, cryptocurrency exchange Coinbase said on Tuesday that, driven by the historical increase in the price of Bitcoin, revenue in the first quarter increased by about 9 times compared with last year.

Coinbase said in a press release that revenue during the period jumped from $1

90.6 million in the same period last year to approximately $1.8 billion, adding that the results are preliminary and unaudited. Net income increased from US$31.9 million a year ago to between US$730 million and US$800 million. Coinbase says it has 56 million verified users.

The company is hosting a webcast to discuss financial results starting at 4:30 pm Eastern Time.

Although the coronavirus pandemic has caused widespread economic difficulties, with Coinbase’s continued growth, Coinbase is expected to become the latest technology company to enter the market with a huge valuation. Trading on the private market valued the company at US$68 billion. If you consider the number of fully diluted shares, this figure will increase to about US$100 billion.

In the past seven months, software provider Snowflake, food delivery app DoorDash, room-sharing website Airbnb and gaming platform Roblox have all gone public. Their market value is currently between US$40 billion and US$113 billion.

Coinbase is unique in that its valuation growth reflects the development trajectory of top cryptocurrencies. Bitcoin has risen by about 700% in the past year, while Ethereum has soared by more than 1100%.

Bitcoin and Ethereum in the past year

CNBC

Coinbase said last week that the US Securities and Exchange Commission approved a direct listing scheduled for April 14. The company said it plans to register nearly 115 million Class A common stocks with the stock code COIN. In a direct listing, the issuing company gives up selling new shares and instead allows existing stakeholders to sell their shares to new investors.

Although Coinbase today relies heavily on attracting users who store and trade the two major cryptocurrencies, the company is betting that it will develop a larger ecosystem of crypto-related assets in the next few years.

The company stated in a press release: “Given the increased interest of institutions in the crypto asset class, we expect trading and custody revenue to drive meaningful growth in 2021.

In the first quarter, Coinbase stated that it had 6.1 million monthly trading users (MTU). For the whole year, since most of its business comes from these transactions, it has identified three possible options for determining revenue.

The rising market value may result in an MTU of 7 million, which is Coinbase’s most aggressive estimate. In the medium range, assuming the encryption market is flat, the MTU will reach 5.5 million. If the price drops, the most conservative forecast is 4 million MTU.

— CNBC’s MacKenzie Sigalos contributed to this report.

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