Within a week of its IPO, Bitcoin and cryptocurrency exchange Coinbase has generated quite a stir. Your earnings report for the first quarter of 2021 could have an impact that will be felt throughout the crypto market.
Coinbase will go public on April 14, after some controversy. The exchange’s estimated valuation is $ 100 billion and it will resell up to 114 million Class A common shares under the ticker symbol COIN.
According to his report, the exchange has generated $ 1.8 billion in revenue during its first quarter of 2021. In addition, it records between $ 730 and $ 800 million in net revenue (an increase of 312%), a volume traded of $ 335 billion ( an increase of 272%), and $ 223 billion in assets on the platform.
A key piece of information is its number of active users, which has increased by more than 10 million compared to the 2020 numbers, which stand at 56 million. This is bigger than Venmo, Cash App, eToro and Robinhood, as reported by equity analyst John Street Capital.
In contrast, with more than 15 years of operations, PayPal has around 360 million active users. The analyst believes that COIN could generate even more income than some of the most prestigious institutional trading platforms such as Chicago Mercantile Exchange, Nasdaq, among others. Added:
Headlines can no longer ignore this. The $ SCHW $ IBKR $ MS BoDs (as a result of the $ ETFC acquisition) and Fidelity (although private) have to add cryptocurrency trading at this point, it’s almost a violation of their fiat duty not to. .
Coinbase Q1 earnings effect on Bitcoin
Investment banker Ellie Frost has explained how the effect of the report may have been “underestimated.” Frost believes that once brokerages seize Coinbase’s earnings, the exchange will “squash” his expectations.
This will be another reason why institutions will no longer be able to ignore the cryptocurrency market, as John Capital also claimed. It could also be a tool to benefit the entire market, in order to eliminate “biases” against the industry. Frost said:
Traditional finance can no longer stick their fingers in their ears and scream that “Bitcoin is not real” when you have a public company that makes ~ $ 2 billion in revenue every quarter.
Predicting a sustained rise for Coinbase over the next quarter, Frost believes institutions will be quick to bet on Coinbase and the cryptocurrency market. As a result, fresh capital will drive the price of BTC. Frost added:
Then they will do the same again in Q2, Q3 and Q4. Even if you are not a fan of Coinbase, its quarterly earnings will be huge to change the mindset of finance and traditional investors, causing big waves for Bitcoin.
The report has received praise from many in the cryptocurrency market. FTX Exchange CEO Sam Bankman-Fried said the financial statement is “impressive” and called it a “big step for the industry.” Added:
(…) Kudos to Coinbase for waiting to go public until they were consistently profitable and at least somewhat projected. That is better than many listings. And it is a great precedent for cryptocurrencies.
BTC is trading at $ 58,845 with small losses on the 24-hour chart. On the weekly chart, BTC still has some gains with a positive 1.1%.
BTC showing losses on the 24-hour chart. Source: BTCUSD Tradingview