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- Coinbase became the first big US cryptocurrency exchange to go public in April
- Revenue surged by more than 1000 percent in the second quarter of 2021
- The exchange has lowered expectations for the year ahead.
Coinbase revenue surged by more than 1000 percent in the second quarter of 2021. It was a period when cryptocurrency experienced some of the wildest swings.
However, the exchange has cautioned about declining volatility as it has lowered expectations for the year ahead.
Coinbase became the first major cryptocurrency exchange to go public and publish its second-quarter results in April. Coinbase had posted a net profit of $2.03bn, up 27 percent from the previous quarter and 1,042 percent year on year. In addition, net income rose to $1.6bn from $32m in the same period last year.
The profits exceeded the biggest, most reputable exchange operators, including CME Group of Chicago, which reported $510m in net income on $1.2bn in revenue in its second quarter, and Intercontinental Exchange, which earned $1.3bn and also included a gain from divesting its stake in Coinbase.
The record-breaking Coinbase results were beyond the wildest analyst expectations. As a result, speculators are betting furiously on volatile crypto assets. The prices of major crypto coins like Bitcoin and Ethereum are surging to new heights earlier in the quarter before declining and then surging again.
MTUs or the retail traders who trade at least once a month have dominated in the three months to the end of June. Coinbase released the data and said that MTU topped 8.8m, up 44 percent from the first quarter.
MTUs and trading volume had already dropped, warns Coinbase
However, Coinbase has cautioned and said that MTUs and trading volume had already dropped in July as volatility declined significantly relative to Q2 levels. August levels also remained lower than earlier in the year.
Coinbase exchange has lowered annual user figure forecast
Due to the unpredictable nature of the market, Coinbase exchange has lowered the top end of its estimates for the average annual user figures from 9m MTUs to 8m.
Coinbase chief executive Brian Armstrong said that the exchange plans to include more digital assets in the coming days.
Earlier Coinbase was hesitant as compared to its offshore compatriots to do so because of regulatory concerns. However, Brian Armstrong said on Tuesday that Coinbase wants to become a leader in assets in a call with investors. He revealed that the company had listed 22 new digital currencies in the second quarter, more than during the entirety of 2020.
The company also wants to enter into decentralized finance or DeFi. It is a nascent but fast-growing market for financial products denominated in cryptocurrencies that cut out traditional intermediaries.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
