coinbasethe largest US-based cryptocurrency exchange, is all about crypto after all. As with all cryptocurrency stories, there are drawbacks as well. — and the Wild up.
Coinbase on Thursday (May 2) reported earnings per share of $4.40, compared to Wall Street's expectations of $1.28, representing a 244.83% increase.
Cryptocurrency platform beats Wall Street revenue forecasts In the same way, It was a relatively modest 19.74%.
“The performance of our platform in the first quarter clearly demonstrates the growing trust and interest in digital assets,” said Coinbase Co-Founder and CEO. brian armstrong About the company's first quarter of 2024 financial statement.
“We are proud to have over 12% of the crypto market capitalization securely stored on our platform.” I got it. Coinbase Chief Financial Officer Alecia Haas On the phone.
The company's adjusted EBITDA in its most recent quarter was $1 billion, more than Coinbase generated in 2018. all 2023.
However, like many crypto articles, the exchange's quarterly results were very strong. There was financial engineering What's going on behind the huge reported revenue growth. As Coinbase executives pointed out to investors, the returns boosted With a one-time profit of $737 on paper, The result was new accounting rules from Financial Accounting Standards Board (FASB) allows crypto companies to record increases in crypto prices on their balance sheets.
Driving focus on payment innovation in cryptocurrencies
According to Armstrong shareholder lettercoinbase focusing Drive revenue in three ways: Through core and simple transaction improvements. experience; growth of stablecoin. Winning in the derivatives space both in the U.S. and the U.S. abroad; Drive international growth by investing in key markets.
On the stablecoin side, Coinbase's USDC market capitalization has increased over 30% since the beginning of the year, growing faster than its major competitors.
“We are seeing increased engagement from customers who hold USDC balances on our platform,” Armstrong said on the conference call.
“[The bitcoin] “ETF has unlocked the flywheel of customer engagement across our Coinbase Prime product suite, and we were thrilled to see 40% of our institutional customers engage with three or more products in the first quarter.” added. Emily ChoiPresident and Chief Operating Officer of Coinbase.
Although the first quarter of 2024 set a high bar for the company, Coinbase executives emphasized their excitement for the quarter. Introduction of new products and service, Aimed to improve and expand user experience Platform reach.
Payments, in particular, has emerged as a key opportunity area.
Also read: What CFOs need to know about expanding the use of stablecoins
“[We’re] We are promoting the utility of cryptocurrencies,” Armstrong said on a conference call. “We're doing this base, our low-cost Layer 2 solution, and build a better payments experience on crypto rails. ”
“Base will help us dramatically reduce transaction fees and confirmation times, moving us closer to our goal of the average crypto transaction taking less than 1 second and costing less than $0.01 anywhere in the world. ” he added.
Armstrong emphasized that payment fees, whether in cryptocurrencies or not, are a “shocking burden” on the United States. lots of consumers and businesses.
“It still boggles my mind to think that merchants lose 2% every time you swipe a credit card,” he said during the call. “This is actually just moving a piece of data, it's like sending a free his WhatsApp message, etc. … Why is there still a 2% tax on all products? transactions in the economy? ”
“I think we've seen with other technologies that when you reduce friction, you get more and more activity,” Armstrong added on the conference call. “So I think just lowering the rates that people pay could lead to economic growth and all sorts of things.” paying”
Still, he said while Coinbase was working on its implementation, wise Although it plans to develop a wallet for cryptocurrencies this summer, the company has no plans to build anything in the banking or insurance space.
“We are also integrating USDC on Base across Coinbase products to enable near-free global instant settlement of USD-denominated assets,” he said on the conference call. “This is a really, really big deal because we have the immediate prospect of updating the global financial system by reducing the billions of dollars in payment fees that consumers and businesses pay each year.”
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