Cryptocurrency exchange Coinbase has released unaudited financial results for the first quarter of 2021 along with its outlook for this year in readiness for its direct listing on NASDAQ, which is expected to occur after a week on April 14.
With cryptocurrency prices on the rise, Coinbasecryptocurrency exchange experienced its best quarter ever. With the price of Bitcoin up nearly 700% in the past twelve months and Ethereum up over 1,100%, Coinbase’s direct listing has accumulated a lot of investor interest. Coinbase initial public offering is expected to arrive at a market valuation of $ 121.7 billion.
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Direct listings don’t result in new issuance of Coinbase shares but instead allow existing shareholders to sell their shares to investors. The COIN Stock intends to register approximately 115 million Class A common shares that will trade under the ticker COIN.
Highlights of financial results for the first quarter of 2021
Revenue rose to $ 1.8 billion in the first quarter, an almost ninefold increase from the $191 million raised in the same period in 2020. Coinbase’s profits soared from 32 million dollars a year ago to $730 million in the first quarter of 2021. Compared to a loss of approximately $ 30 million in 2019, Coinbase made a profit of $ 322.3 million in 2020.
Since Coinbase earns revenue from transaction fees from buying and selling cryptocurrencies based on the value of cryptocurrencies, the growth in income and profits has been correlated with a jump cryptocurrency prices. Coinbase does not charge fees for storing cryptocurrencies.
More than 56 million users registered with the Coinbase crypto exchange.
More than 6.1 million monthly transaction users were active at the end of the first quarter, increasing from 2.8 million at the end of 2020. There was 223 billion dollars worth of assets on the Coinbase platform, including 122 billion dollars belonging to organizations, up from $90.3 billion last year. This is 11.3% of the crypto-asset market share, according to Coinbase. Coinbase’s trading volume rose to $ 335 billion from $ 193.1 billion at the end of 2020.
CoinbaseOutlook Plans for 2021
Coinbase provided three possible scenarios for how the number of MTU monthly users will grow by the entire year of 2021, even though future earnings are the subject of uncertainty. The most optimistic estimate points to growth exceeding 7 million. Assuming the cryptocurrency market remains unchanged, MTUs will fall to 5.5 million, and the most conservative forecast is 4 million MTU.
The COIN Stock said it expects a non-recurring one-time listing fee associated with a direct listing to cost Coinbase between $ 35 million and $ 1.6 billion in general and administrative costs for the entire year of 2021. Regardless, Coinbase plans to have sales & marketing make up between 12% and 15% of net revenues by 2021.
Brian Armstrong, the CEO of Coinbase, said that more assets would appear on the Coinbase exchange, and a wide range of applications of decentralized finance (deFi) will be accessible through the Coinbase platform. The firm will also build out its services to institutional investors, such as brokers and portfolio managers. Besides, by acquiring Bison Trails, the COIN Stock is creating what Armstrong referred to as “Amazon’s web services for cryptography.”
On Tuesday, Coinbase announced it had joined a Washington, D.C.-based lobbying organization focusing on cryptocurrencies and digital assets, including Square and Fidelity.