Coinbase Q1 Revenue Hit $1.6 Billion Amid ETF Approvals, Surging 72%

Coinbase, the largest cryptocurrency exchange in the United States, released its earnings report for the first quarter of 2024, reporting total revenue of $1.6 billion, an increase of 72% quarter-over-quarter.

The performance was driven by rising crypto asset prices and the launch of spot bitcoin ETFs in the US which led to improved inflows into the market.

Coinbase's profits rose in the first quarter

Coinbase's net income came in at $1.18 billion, or $4.40 per share, which translates to $1 billion in adjusted EBITDA in the first quarter. By comparison, adjusted EBITDA, which shows earnings before taxes, depreciation, interest and amortization, was $977.5 million in 2023.

Our Q1 2024 on-chain earnings report was just released.

Newer mint $ coin NFT Earnings.
→ https://t.co/QhsV4V8Tyi

Then head to Coinbaseshop․com to get a 20% discount sitewide. pic.twitter.com/ngwChcmtJs

— Coinbase 🛡️ (@coinbase) May 2, 2024

The earnings report also showed that Coinbase attributed its net income in part to $737 million in unrealized pre-tax gains on cryptocurrency assets. The company ended the quarter with $7.1 billion in capital, including $1.1 billion of net cash raised through the sale of 2030 convertible notes.

Consumer transaction revenue more than doubled to $935.2 million, and volume reflected that, increasing 93% to $56 billion. Institutional interest also increased as transactions generated $85 million in revenue, an increase of 133% quarter-on-quarter. Meanwhile, Coinbase Prime trading volume rose 105% to $256 billion, outpacing the US spot market. It is worth noting that Bitcoin represents a third of consumer and institutional transactions.

Coinbase's custodial services revenue jumped 64% to $32 million. The rally was driven by the launch of Bitcoin ETFs earlier this year, with Coinbase being the custodian of eight of the eleven newly launched products. Assets under custody reached $171 billion as the quarter ended.

Coinbase's core revenues are up, and expenses are up

Since its launch in August, Base, Coinbase's Ethereum layer 2 chain, has generated $56.1 million in revenue. It has shown twice the transaction volume compared to Ethereum, along with an 800% increase in developer activity.

During the quarter, Coinbase acquired a minority stake in Circle, the issuer of the USDC stablecoin, which increased its market capitalization by 30%. This resulted in subscription and services revenue increasing by a third, including a 15% increase in stablecoin revenue.

Despite diversification with Base and USDC, the recent boom has been due to favorable market conditions. Bitcoin's price rose 57% to an all-time high of $73,000, fueled by more than $50 billion in entry into 10 bitcoin ETFs approved in January.

Meanwhile, the company's transaction expenses rose 73% to $217 million. Due to increased trading volume, the company expects costs to rise in the second quarter, up to $890 million.