Coinbase co-founder and CEO Brian Armstrong speaks at TechCrunch Disrupt SF 2018.
Steve Jennings | Getty Images for TechCrunch
In preparation for its debut on the Nasdaq next week, cryptocurrency exchange Coinbase said on Tuesday that first-quarter revenue is about nine times higher than last year, driven by a historic rise in the price of bitcoin.
Revenue for the period rose from $ 190.6 million in the same quarter a year earlier to about $ 1.8 billion, Coinbase said in a press release, adding that the results are preliminary and unaudited. Net income grew from $ 31.9 million a year ago to between $ 730 million and $ 800 million. Coinbase said it has 56 million verified users.
The company will host a webcast starting at 4:30 p.m. Eastern Time to discuss its financial results.
Coinbase is poised to become the latest technology company to hit the market with tremendous valuation, benefiting from continued growth in the industry despite wider economic troubles caused by the coronavirus pandemic. Private market trading has been estimated by the company at $ 68 billion, a number that rises to about $ 100 billion when a fully diluted share is taken into account.
In the past seven months, software vendor Snowflake, food delivery app DoorDash, room sharing site Airbnb, and gaming platform Roblox have all gone public. Their market capitalization is currently between $ 40 billion and $ 113 billion.
Coinbase is unique in that the increase in value reflects the trajectory of the best cryptocurrencies. Bitcoin is up about 700% in the last year, while ethereum is up more than 1,100%.
Bitcoin and ethereum in the past year
CNBC
Coinbase said last week that the SEC has approved the immediate listing, scheduled for April 14. The company has said it plans to register nearly 115 million shares of Class A common stock, which will be traded under the ticker symbol COIN. In a direct listing, the issuing company refrains from selling new shares and instead allows existing stakeholders to sell their shares to new investors.
While Coinbase today relies heavily on attracting users who store and trade the two major cryptocurrencies, the company is betting on the development of a larger ecosystem of crypto-related assets in the coming years.
“We expect meaningful growth in 2021, driven by transaction and custody proceeds, given the increased institutional interest in the crypto asset class,” the company said in the press release.
In the first quarter, Coinbase said it had 6.1 million monthly transaction users (MTUs). As it looks for the full year, three possible scenarios are outlined that will determine revenue as so much of its business is derived from those transactions.
Rising market values could result in MTUs of 7 million, Coinbase’s most aggressive estimate. In the mid-range, assuming a flat crypto market, MTUs would land at 5.5 million. And the most conservative forecast, if prices fall, is 4 million MTUs.
– CNBC’s MacKenzie Sigalos contributed to this report.
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