Telling your potential investors that your cryptocurrency exchange grossed $ 1,8 billion during the first three months of the year is definitely a good way to advertise your company within days of its Nasdaq listing (NASDAQ shares).
Coinbase released its first quarter results on Tuesday, noting that it had reaped huge profits in the first quarter of 2021. The gains are largely due to the hyperbolic rise of the crypto industry.
Coinbase posted record profits and revenues in the first quarter prior to its IPO
To say that Coinbase performed stellar in the first quarter would be an understatement. According to the report released by the company on Tuesday, Coinbase's user base increased by 117%, from 2,8 million in the fourth quarter of 2020 to 6,1 million in the first quarter of 2021. exchanges increased by $ 1,8 billion in the three-month period ended March 31, bringing profit from approximately $ 740 million to $ 800 million.
Additionally, Coinbase's total assets increased from $ 90 billion to $ 223 billion during a single quarter; $ 122 billion of these assets came from institutional investors.
The announced first quarter results come within days of Coinbase's public listing, which will take place on Wednesday, April 14. After a promising quarter, the share price of the exchange could easily rise from the estimated $ 343,58 for the period between January and March.
What to expect for the rest of 2021
Currently, Coinbase admits that high volatility remains the Achilles heel of the cryptocurrency market, but the company plans to do its best even when prices drop.
“This unpredictable revenue, in turn, affects our profitability on a quarterly basis. In terms of expenses, we intend to prioritize investments, even in periods when we could see a decrease in the price of Bitcoin ”.
Estimates for users active each month on the exchange, for the rest of the year, are provided in the same report. Although the exchange is not talking about revenue or profits. 7 million users transacting is a "high" figure in a scenario where the valuation of the aggregate crypto market increases during 2021. The company cites 5,5 million users as an "average" figure if capitalization of market remains unchanged and 4 million as a "low" figure in a bear market of 2018.
Overall, Coinbase's upcoming public listing will mark a turning point in the evolution of cryptocurrencies as a mature and reputable industry.
At the time of writing this article, BTC is still struggling to break through the resistance level and reach $ 60 again. Certainly, when Coinbase becomes a public company, the price of the digital currency could also be affected. On the positive side, of course.