Within a week of going public, the Bitcoin and crypto exchange Coinbase caused a lot of hype. The earnings report for the first quarter of 2021 could have an impact on the entire crypto market.
Coinbase will go public on April 14th after some controversy. The exchange’s estimated valuation is $ 100 billion and will resell up to 114 million Class A common shares under the ticker COIN.
According to their report, the exchange had sales of $ 1.8 billion in the first quarter of 2021. In addition, it has net income of $ 730 million to $ 800 million, up 312%, and trading volume of $ 335 billion, up 272%. and $ 223 billion in fortune on the platform.
One key piece of data is the number of active users, which has increased by over 10 million compared to 2020 (56 million). This is bigger than Venmo, Cash App, eToro, and Robinhood, according to equity analyst John Street Capital.
In contrast, PayPal has around 360 million active users after over 15 years of operation. The analyst believes that COIN could generate even more sales than some of the most renowned institutional trading platforms such as the Chicago Mercantile Exchange, Nasdaq and others. He added:
Incumbent operators can no longer ignore this. The BoDs of $ SCHW $ IBKR $ MS (as a result of the $ ETFC acquisition) and Fidelity (although private) need to add crypto trading at this point. This is almost a breach of their duty of loyalty not to do so.
Coinbase Q1 earnings effect on Bitcoin
Investment banker Ellie Frost has explained how the impact of the report may have been “underestimated”. Frost believes the exchange will “crush” expectations once the brokers hit Coinbase profits.
This will be another reason why institutions cannot continue to ignore the crypto market, as John Capital also claimed. It could also be an instrument that benefits the whole market in order to break down “prejudices” against the industry. Frost said:
Traditional financings can no longer stick their fingers in their ears screaming “Bitcoin is not real” when a public company has approximately $ 2 billion in quarterly sales.
Forecasting a sustained surge in Coinbase in the next quarter, Frost predicts that institutions will rush to get involved in Coinbase and the crypto market. As a result, fresh capital will determine the price of BTC. Frost added:
Then they will do the same thing again in Q2, Q3, and Q4. Even if you’re not a fan of Coinbase, the quarterly earnings will reverse the mindset of traditional financial institutions and investors, and Bitcoin will make big waves.
The report has received praise from many in the crypto market. Sam Bankman-Fried, CEO of FTX Exchange, claimed the financial stamen was “impressive” and called it a “big leap for the industry”. He added:
(…) Kudos to Coinbase for waiting for the IPO until they were consistently profitable and at least somewhat projectable. That’s better than a lot of entries. And it’s a great precedent for crypto.
BTC is trading at $ 58,245 with small losses on the 24-hour chart. On the weekly chart, BTC still shows some gains with a positive 1.1%.
BTC shows losses on the 24-hour chart. Source: BTCUSD Tradingview
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