Crypto exchange Coinbase posted $1.9 billion in transaction revenue in Q2, in its second-ever earnings report as a public company.
Coinbase announced Q2 earnings on 10 August, posting a slightly over $1.6 billion profit, which is nearly doubled then Q1. Coinbase $2.03 billion of revenue for Q2 of 2021, which exceeds prediction of analysts-$1.88 billion.
User Growth
The company also reported a spike in user activity, noting that retail “Monthly Transacting Users (MTUs) grew to 8.8 million, up 44% from Q1 2021”. Coinbase warned that MTUs and trading volume would be lower in Q3 compared to Q2. The total base of verified users also rose to 68 million. The exchange’s take rate – or retail trading revenue dividend by retail trading volume was 1.24%, up from 1.21% last quarter. Adjusted EBITDA of $1.12 billion, down slightly from last quarter’s $1.15 billion.
Coinbase reported that more than 9,000 financial institutions are now utilizing exchange to generate their own crypto products. In recent months the company has formed partnerships with industry leaders, including PNC Bank, Tesla, Third Point LLC, and WisdomTree Investments.
For the first time in Coinbase, ETH flipped BTC in trading volume, with assets representing 26% and 24% of total volume. The firm attributed the rise in ETH trading volume to the growth in decentralized finance and non-fungible token ecosystems. The demand of Ethereum also increased due to Ethereum 2.0 staking.
Key Metrics
Trading volume in Q2 was $462 billion, an increase of 38% compared to Q1. Total retail Trading Volume was $145 million, an increase of 21% compared to Q1.
Total revenue for Q2 was $2.2 billion. Net revenue was $2 billion, of which $1.9 billion was transaction revenue and $100 million was subscription and service revenue, 82% up from Q1.
Retail transaction revenue is $1.8 billion, 26% up from Q1. Institutional transaction revenue was $102.4 million, up 20% compared to Q1. Custodial fee revenue rose to $31.7 million, 35% up from Q1.
Total operating expenses were $1.4 billion, led by $335 million in transaction expenses, $292 million in technology and development expenses and $248 million in general and administrative expenses. That compared to total operating expenses in Q1 of $813 million.
Also Read: Coinbase Will Now Allow Its Users To Buy Crypto Using GPAY and APPLE PAY
Coinbase shares are up about 7% from their reference price of $250, but down around 30% from their opening trading price of $381. Coinbase “added more assets for trading than we added in all of 2020”. It now supports 83 assets for trading and 142 for custody.
We continued to massively grow our team in Q2. It includes adding 450 net new employees and ending the quarter with 2176 full-time employees.
