Cryptocurrency exchange Coinbase released a Q2 report showing that its earnings were at record highs. Exchange officials confirmed that the second quarter was profitable due to the fact that the market was under the influence of a bullish trend.
If you look at the numbers in the report, it becomes clear that Q2 net revenue was $ 2 billion. This is the highest indicator in the entire history of the site. Revenues were more than 2 times higher than in the previous quarter, when net income was $ 771 million. Earnings per share were $ 3.45, which was higher than analysts’ estimates of $ 2.33.
Reasons for this rise in income
Such figures are not surprising, since 95% of the exchange’s income is generated from trading commissions, they are considered the highest on the market. The higher the cost of currencies, the higher the commission. At the beginning of the second quarter, Bitcoin was at its peak and the company received high commissions. Then the value of the main cryptocurrency plummeted by 41%, which reduced the size of Coinbase’s fees, but provoked an increase in transactions.
Transaction revenue was $ 1.9 billion, and revenue from user subscriptions and other services exceeded $ 100 million.
In addition, the report says that the number of monthly user transactions on the exchange has grown to 8.8 million. This is 44% more than in the first quarter of 2021. The number of identified clients of the platform is 68 million. There was also an increase in the number of institutional clients.
Another reason for the growth in transactions is the emergence of a large number of institutional investors: during the quarter their number grew from 8,000 to 9,000, and of the top 100 hedge funds, 10 have already become investors on Coinbase, according to the report. It also says that Tesla is a Coinbase client. When you consider that Tesla has invested $ 1.5 billion in bitcoin, it can be assumed that the company invested money through Coinbase.
As representatives of the exchange indicate, partnerships with investors are only deepening. The ecosystem itself employs 160,000 partners who use cryptocurrency tools to interact with their client base.
At the end of June, the assets of the exchange were equal to the amount of $ 180 billion. Crypto assets on the site account for 11% of the total market capitalization. It now stands at $ 1.94 trillion.
What will the third quarter be like for Coinbase?
It can be assumed that the 3rd quarter will show slightly different numbers, since the trading volume on the crypto market has decreased and the bearish trend dominated for a long time. At the same time, Coinbase is confident that 2021 will be a very successful year for the exchange. It is planned to further expand partnerships with organizations and institutional foundations.
Coinbase Exchange is a centralized cryptocurrency exchange that is registered in the United States. There are 86 cryptocurrencies and 259 trading pairs on the site. Coinbase Exchange has reported trading volume of 83,456.08 BTC in the last 24 hours. The most active trading pair on the exchange: ETH / USD.