TL;DR
-
In the first quarter of 2021, they brought in a stunning result $1.5 billiononly from transaction costs (86% of the total revenue of $1.8 billion).
-
But as the crypto winter hit, the number of transactions going through the platform dropped and they moved to other products such as subscriptions and staking, and a rev-share agreement with Circle where they paid interest.
-
It’s great to see their continued innovation and their ability to maintain that ‘startup mindset’ even as a publicly traded company.
Full story
This isn’t an ad for Coinbase (but hey, if anyone out there has connections, we’d love to work with them), it’s a quick look at how quickly they’ve adapted since going public.
Coinbase listed on the Nasdaq in April 2021 (i.e. ‘The Good Times’).
In the first quarter of 2021, they brought in a stunning result $1.5 billiononly from transaction costs (86% of the total revenue of $1.8 billion).
But as the crypto winter hit, the number of transactions going through the platform plummeted and they desperately needed additional ways to make up for that lost revenue.
Since then, they’ve made two particularly clever moves:
Un: Add products such as subscriptions and staking.
Deux: A revenue-sharing agreement with Circle, in exchange for providing “reserves” for the world’s second-largest stablecoin, USDC.
To explain that further, the company behind it (Circle) should have a tons of money in reserves so that they do not detach from the dollar in the case of a bank run.
Coinbase seemed to see that interest rates were rising and raised their hands to support Circle in exchange for interest.
Their quarterly figures appear Today, but income from transaction costs reduced to 46% in the first quarter of this year, and that percentage is expected to fall further in today’s report.
(That’s great news! Diversified income streams are much better than all eggs in one basket)
There is no doubt that Coinbase has greatly advanced the crypto industry.
It’s great to see their continued innovation and their ability to maintain that ‘startup mindset’ even as a publicly traded company.
I look forward to the final numbers in the quarterly report later today.