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Coinbase earnings blow past estimates

By Kevin Donovan

21:32, 10 August 2021

Coinbase Q2 report
Coinbase Q2 report Photo: Coinbase

Coinbase Global, Inc. (Nasdaq: COIN) handily beat earnings and revenue estimates for Q2 2021, reporting $6.78 EPS on $2.33bn in revenue, on both increased users and trading volume in the cryptocurrency sector, driven primarily by asset-price volatility. This far surpassed analysts' estimates of $2.69 EPS and $1.88bn in revenue.

Coinbase shares ended Tuesday down to $269.67, from the $280.67 open, after trading as high as $281.50 early in the day.

Coinbase’s second-ever quarterly report since its April 2021 IPO was strong for the crypto trading platform, “as more and more people are using crypto,” noted CEO Brian Armstrong during the investor conference call held after market close on Tuesday. Armstrong reported Coinbase users are using crypto for things other than just trading, such as staking.

Wide digital assets

While roughly 50% of the digital assets traded on Coinbase are Bitcoin, Armstrong noted the remaining 50% consists of various other digital assets, none of which individually tops 10% of total traded volume. “We want to be the Amazon of crypto,” Armstrong said.

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CFO Alisia Hass added that the growing acceptance by hedge funds and other institutional investors over the second quarter helped fuel user growth, and that Coinbase now offers bi-lateral lending options for institutional investors, as well as the ability for retail accounts to leverage up to $100,000 of their Bitcoin holdings.

"Q2 illustrated the volatility we have anticipated in these still-early days in the cryptoeconomy," Coinbase said in its letter to investors. "As volatility and crypto asset prices are highly correlated with trading revenue, the crypto market environment heavily influenced our Q2 financial results."

And while the evolving regulatory environment “has been interesting lately,” Armstrong said the growing crypto community is becoming a powerful constituency, lobbying legislators over their concerns over decentralised digital assets.

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