While bitcoin remains volatile, dragging the prices of other cryptocurrencies, the American exchange platform has benefited from the endorsement of private companies and the notoriety they bring to these digital assets. As a result, its net profit soared to $771 million from $177 million in the previous quarter.
Cryptocurrency exchange Coinbase, boosted by the frenzy around these blockchain-developed currencies like bitcoin, saw its revenue more than triple in the first quarter compared to the previous quarter.
The group, which claimed 56 million users at the end of March, generated $1.8 billion in revenue between January and March, up from $585 million in the fourth quarter of 2020 and $191 million in the first quarter of 2020, a statement Thursday detailed. Coinbase’s net income, which went public on Wall Street in April, also soared to $771 million from $177 million in the previous quarter and $32 million in Q1 2020.
These results reflect the record highs that many cryptocurrencies climbed to during the quarter, the high volatility in the asset class and “increased interest” in virtual currencies in general, the group notes. Bitcoin, for example, went from around $30,000 at the beginning of the year to more than $60,000 in March.
The endorsement of speculative activity
This is manifested by many financial players who see an opportunity to attract a clientele ready to take a potentially lucrative risk. This is the case of the investment bank Goldman Sachs, which will offer brokerage on these assets, or the Swiss UBS.
As we said Bitcoin, for example, has risen from about $30,000 at the beginning of the year to over $60,000 in March. However, it remains subject to the positions of the market’s “whales” (those who can influence the price through their assets), like Tesla, which announced last month that it was backing off on selling its cars in bitcoin, causing the price to fall.
The entire cryptocurrency market was worth almost $2 trillion at the end of March, up from $782 billion at the end of December, notes Coinbase. The valuation of bitcoin, meanwhile, exceeds $1 trillion. The platform handled $335 billion worth of cryptocurrency trading during the period, up from $89 billion in the previous quarter. Bitcoin accounted for 39% of these exchanges and ethereum for 21%.
The stock, which had lost 6.5% in trading, was gaining 2.2% in electronic trading following the close of the New York Stock Exchange. The group warned that it faces increasing competition, including platforms offering to exchange certain cryptocurrencies that Coinbase does not offer.