Coinbase Global continued to ride a volatile cryptocurrency market in its second quarter, where prices (depending on where and when you looked) ebbed and flowed, but trading was frenzied.
In terms of headline numbers released Tuesday (Aug. 10), revenues, which surged to $2.2 billion from $186 million a year ago, were better than the $1.9 billion expected. Trading volumes were $462 billion, surging from the $335 billion seen in the fiscal first quarter. Net income came in at $1.6 billion, up from $32 million a year ago.
In a sign of the wider embrace the company is getting for its trading platform, the company said that its monthly transacting users (MTUs) were up by 44 percent, as compared to the first quarter, to a recent 8.8 million, and well above the 1.5 million seen a year ago. Total verified users grew to 68 million in the most recent quarter, up from 56 million in the previous quarter.
In its earnings materials, the company noted that “we are seeing a growing number of customers leveraging our infrastructure as they create their own crypto offerings.” Those creators include traditional banks, asset managers and FinTechs.
The bulk of the $1.9 billion in transaction revenues came from retail, which accounted for $1.8 billion of that tally. Assets on the platform came in at $180 billion, 47 percent of that was held in bitcoin and 24 percent in Ethereum. Coinbase said in its filings that assets on its platform represented 11.2 percent of the total market cap of the crypto market itself. And drilling down into the trading volumes, roughly a quarter came from bitcoin.
But it’s important to note, too, that in the company’s results, management pointed to the fact that there may be volatility ahead, and some key metrics are trending downward. As Coinbase noted, in July, retail MTUs and total Trading Volume were 6.3 million and $57 billion, respectively, “as crypto asset prices and crypto asset volatility declined significantly relative to Q2 levels.” Headed into August month-to-date, retail MTUs and trading volumes, the company said, “slightly improved compared to July levels but remain lower than earlier in the year. As a result, we believe retail MTUs and total trading volume will be lower in Q3 as compared to Q2.”
On the earnings call, Chief Financial Officer Alesia Haas said that “the metric that we really focus on is what percent of our retail MTUs are now using multiple products on Coinbase, and in Q2, was for 27 percent up from 25 percent in the first quarter.” With a nod to the Coinbase Card and Coinbase Borrow, CEO Brian Armstrong stated that those offerings are evidence of the “expanding crypto economy.” The latter product, he explained, allows people to borrow using bitcoin as collateral; the card allows users to spend on their cards wherever Visa is accepted.
“So, one of our goals long terms is how do we get more and more commerce transactions for goods and services in the everyday economy is happening with crypto. And there are a few things that need to get in place for that to happen. One is that you need to get the blockchain to be more scalable, and so there’s some work we’re doing on that. The other is that we need to get both a set of merchants and a set of consumers who both want to spend crypto.”
Recent PYMNTS/BitPay research shows that 18 percent of consumers in the U.S. remain likely to use crypto to make purchases.
See Also: BitPay Study: How Consumers Want To Use Crypto To Shop And Pay in 2021 And After
