© Reuters Coinbase Reports Record Second Quarter Profit of $1.6 Billion; Ethereum trade surpasses Bitcoin
Coinbase (NASDAQ:) announced these on Tuesday (10), posting a profit of just over $1.6 billion, nearly double that recorded in the first quarter.
The company also reported revenue of $2.03 billion, beating analysts’ forecasts of $1.88 billion.
The company also reported an increase in user activity, noting that “Users with Monthly Transactions (MTUs) grew to 8.8 million, 44% above Q1 2021” and that its total verified user base rose to 68 million.
And as a sign that Coinbase may finally be finding a way to diversify its revenue streams, the company reported having brought in more than $100 million in subscriptions and services – that number, however, is still overshadowed by the $1.9 billion in transaction fee revenue.
Overrun trading volume at Coinbase
And in another notable milestone, trading volume surpassed for the first time on the platform, with trading accounting for 26% of volume against 24% of :
In its second-quarter letter to shareholders, Coinbase also praised the growing variety of players in the cryptocurrency market.
The company noted that it now has more than 9,000 institutional customers and noted that auction house Sotheby’s has settled its first transaction in encryption during the last quarter.
Coinbase’s share price has risen in recent weeks, reaching $280 on Tuesday morning. This is a marked improvement for the stock, which traded at $220 in June.
But it’s still a long way off from the all-time record $342, achieved shortly after the company went public in May. After Tuesday hours, shares traded under the symbol COIN were up about 2%.
Why so much profit?
While Coinbase’s earnings beat expectations for the quarter, much of this is due to unprecedented volatility in the cryptocurrency markets.
As Coinbase gets much of its money from trading fees, the company profited from both the market rally and the subsequent crash – something that is unlikely to happen again in the third quarter, which was marked by diminished volatility.
Coinbase acknowledged that volatility boosted its second-quarter earnings and warned it is unlikely to replicate that performance.
“As a result, we believe retail MTUs and Total Commercial Volume will be lower in Q3 compared to Q2,” the company said.
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