Coinbase co-founder and CEO Brian Armstrong speaks at TechCrunch Disrupt SF 2018.
Steve Jennings | Getty Images for TechCrunch
In preparation for its debut next week on the Nasdaq, Coinbase, the cryptocurrency exchange, said on Tuesday that revenue in the first quarter is about nine times higher than last year, driven by a historic rise in the price of bitcoin.
Revenue for the period rose to about $ 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 launch its financial results starting at 4:30 p.m. Eastern Time.
Coinbase plans to become the latest technology company to reach the market with a massive valuation, taking advantage of the continued growth in the sector despite broader economic struggles caused by the coronavirus pandemic. Private market trading valued the company at $ 68 billion, a number that swells to about $ 100 billion if a fully diluted stock is calculated.
In the last seven months, the software provider Snowflake, the delivery app DoorDash, the room-sharing website Airbnb and the gaming platform Roblox have all become known. Their market capitalization is currently between $ 40 and $ 113 billion.
Coinbase is unique because the valuation increase reflects the trajectory of the best cryptocurrencies. Bitcoin has risen by about 700% in the past year, while etherum has risen by more than 1100%.
Bitcoin and ethereum in recent years
CNBC
Coinbase said last week that the SEC was approving the direct listing, which is scheduled for April 14. The company said it plans to list nearly 115 million Class A ordinary shares, which will trade under the COIN symbol. In a direct listing, the issuing company forgives to sell new shares and instead allows existing stakeholders to sell their shares to new investors.
While Coinbase today is heavily dependent 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 custodial revenue, given the increased institutional interest in the crypto-asset class,” the company said in the release.
In the first quarter, Coinbase said it had 6.1 million monthly transaction users (MTUs). With a view to the full year, three possible scenarios are set out to determine the revenue, as so much of the business is derived from these transactions.
Rising market values could result in 7 million MTUs, Coinbase’s most aggressive estimate. In the middle range, if a flat crypto market is accepted, MTUs will end up at 5.5 million. And if prices fall, the most conservative forecast is 4 million MTUs.
CNBC’s MacKenzie Sigalos contributed to this report.
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