Coinbase had 56 million verified users in the first quarter of 2021 — and generated total revenues of $1.8 billion, newly released figures show.
Ahead of its long-awaited stock market debut, the exchange has offered an insight into the current state of its finances. It’s evident that the bull run has given the company’s coffers a substantial boost to say the least.
Net income in the three months ending March 31 has been projected at between $730 million and $800 million — extremely healthy figures for a company about to go public.
But Coinbase did make an exceedingly candid admission in its statement, saying:
“Monthly transacting users, trading volume, and therefore transaction revenue currently fluctuate, potentially materially, with Bitcoin price and crypto asset volatility. This revenue unpredictability, in turn, impacts our profitability on a quarter-to-quarter basis.”
The Outlook for 2021
According to the exchange, it current boasts 6.1 million transacting users and has $223 billion in assets through its platform — representing 11.3% of the total market cap.
Coinbase says that it intends to measure its performance over price cycles instead of on a quarterly basis — presumably to account for the fact that a bear market could deliver some rather nasty results on a three-month timeframe. The company explained:
“Crypto markets have observed four major price cycles since 2010 which have typically had durations ranging from two to four years. On average, these price cycles have increased the overall crypto market capitalization significantly from the prior cycle and attracted new users into the cryptoeconomy.”
Executives went on to set out three scenarios that could emerge across 2021 as a whole, and said revenues are heavily linked to its number of monthly transacting users (MTUs.)
In a best-case scenario, Coinbase believes it would enjoy average MTUs of seven million across the whole year — and this would likely be linked to “an increase in crypto market capitalization and moderate-to-high crypto asset price volatility.”
Assuming that the total market cap remains flat, with Bitcoin and other cryptocurrencies showing little or moderate volatility, a mid-range target of 5.5 million MTUs is set, which would be a “modest decline” from the first quarter.
And finally, the worst-case scenario predicts an average of four million MTUs if Bitcoin and other cryptocurrencies suffer a “significant decrease” like they did in 2018. According to Coinbase, this would result in monthly users across 2021 remaining at similar levels to the fourth quarter of 2020.