Coinbase Co-Founder and CEO Brian Armstrong speaking at TechCrunch Disrupt SF 2018.
Steve Jennings | Getty Images for TechCrunch
In preparation for its Nasdaq debut next week, cryptocurrency exchange Coinbase said on Tuesday that first-quarter revenue was nine-fold from last year, fueled by a historic rally in the price of bitcoin.
Revenue in the period increased to around $ 1.8 billion from $ 190.6 million in the same quarter a year earlier, Coinbase said in a press release, adding that the results are preliminary and unaudited. Net income grew to between $ 730 million and $ 800 million from $ 31.9 million a year ago. Coinbase said it has 56 million verified users.
The company is hosting a webcast to discuss its financial results beginning at 4:30 pm ET.
Coinbase is poised to become the latest tech company to hit the market with massive valuation, capitalizing on continued growth in the sector despite the broader economic struggles caused by the coronavirus pandemic. Trading in the private market has valued the company at $ 68 billion, a figure that rises to about $ 100 billion when a fully diluted share count is taken into account.
In the past seven months, software provider Snowflake, food delivery app DoorDash, room-sharing site Airbnb, and gaming platform Roblox have all gone public. Its market caps are currently between $ 40 billion and $ 113 billion.
Coinbase is unique in that its valuation increase reflects the trajectory of major cryptocurrencies. Bitcoin is up roughly 700% last year, while ethereum has soared more than 1,100%.
Bitcoin and ethereum in the last year
Coinbase said last week that the SEC approved direct listing, which is scheduled for April 14. The company has said it plans to register nearly 115 million Class A common shares, which will trade under the ticker symbol COIN. In a direct listing, the issuing company forgoes selling new shares and instead allows existing stakeholders to sell their shares to new investors.
While Coinbase relies heavily today on attracting users who store and trade the two major cryptocurrencies, the company is betting on developing a larger ecosystem of crypto-related assets in the coming years.
“We expect significant growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class,” the company said in the statement.
In the first quarter, Coinbase said it had 6.1 million monthly transaction users (MTU). Looking at the full year, it presents three possible scenarios that will determine revenue, since much of your 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 prediction, should prices drop, is 4 million MTUs.
– CNBC’s MacKenzie Sigalos contributed to this report.
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