Crypto exchange Coinbase released its Q1 2021 figures last week, earning the company many plaudits. The key headline was its $1.8bn revenue for the quarter. But the figures also revealed an uptick in both retail and institutional growth.
Coinbase Goes Mainstream
Given the exchange’s market share, particularly in the U.S., crypto advocates hold expectations that this event will trigger massive bullish sentiment across the entire industry. Going mainstream was always seen as taking the fight to the legacy system, and now, it finally looks as though it’s becoming a reality.
Speaking with Laura Shin, Cermak said he was shocked and impressed that a single company custodied 10% of the entire crypto market cap’s assets.
“Another crazy one is the amount of money they actually custody on Coinbase. I think it’s like $230bn. And if you look at the total market cap of everything in crypto, it’s about $2tr right now. So you have like 10% of all of the assets custodied by one company.”
What’s more, Cermak points out that comparisons with the previous quarter show surging growth in a relatively short time. This is especially apparent in the upswing in monthly transacting users, which doubled from the last quarter.
“I just think like a really really solid growth, really great results. EBITDA was really healthy as well. One last thing I’ll add is that they also grew the number of users significantly. So it was 6.1mn monthly transacting users. So users that ended up making a transaction that month. And that’s up, I think around 3mn the previous quarter.”
— Laura Shin (@laurashin) April 11, 2021
“the company has little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high expected valuation of $100 billion.”
The firm explained that cryptocurrency is still a nascent industry and one that’s highly competitive. They predict a fall in Coinbase’s transaction margins in the future, placing its revenue under pressure.