Coinbase, the leading U.S. crypto exchange, experienced a significant growth in revenue during the first quarter of 2024, reaching a total of $1.6 billion. This marks a 72% increase compared to the previous quarter, showcasing the company’s ability to capitalize on the bullish crypto market. The net income for Coinbase also saw a substantial increase, reaching $1.18 billion or $4.40 per share. This resulted in $1 billion in adjusted EBITDA for Q1, surpassing the $977.5 million reported in 2023.
The stellar performance of Coinbase in Q1 can be attributed to various factors, including the surge in crypto asset prices and the launch of spot Bitcoin ETFs in the United States. These developments led to increased inflows into the market, benefiting Coinbase’s bottom line. Additionally, the company reported $737 million in pre-tax unrealized gains on crypto assets, further contributing to its net income.
Consumer transaction revenue for Coinbase doubled to $935.2 million, with transaction volume also increasing by 93% to $56 billion. Institutional interest grew significantly, with transactions generating revenue of $85 million, a 133% jump from the previous quarter. The Coinbase Prime trading volume surged by 105% to $256 billion, surpassing the U.S. spot market. Bitcoin played a significant role in both consumer and institutional transactions, accounting for a third of the total volume.
Coinbase’s custodial services revenue saw a notable increase of 64% to $32 million in Q1. The company’s assets under custody reached $171 billion by the end of the quarter. Base, Coinbase’s Ethereum layer 2 chain, generated $56.1 million in revenue since its launch, demonstrating robust transaction volume and developer activity. Coinbase also acquired a minority stake in Circle, the issuer of USDC stablecoin, leading to a 30% market capitalization growth. This strategic move boosted subscriptions and services revenue, including stablecoin revenue, by 15%.
Despite diversifying its revenue streams with Base and USDC, Coinbase’s remarkable performance in Q1 was largely driven by favorable market conditions. The surge in Bitcoin’s price, reaching an all-time high of $73,000, coupled with significant inflows into spot Bitcoin ETFs, propelled the company’s earnings. However, the company also faced challenges, with transaction expenses increasing by 73% to $217 million. Coinbase anticipates even higher costs in Q2 due to increased trading volume, projecting expenses as high as $890 million.
Coinbase’s Q1 2024 earnings report reflects the company’s robust financial performance and strategic initiatives in capitalizing on the booming crypto market. As the crypto industry continues to evolve, Coinbase’s ability to adapt to market dynamics and drive revenue growth will be crucial for its long-term success.