The big picture: American cryptocurrency exchange Coinbase has announced estimated earnings results for the first quarter ahead of its planned listing on the Nasdaq stock exchange later this month. Should the momentum around crypto hold up, the company could have a big debut.

In the three-month period ending March 31, 2021, Coinbase said it generated estimated revenue of $1.8 billion with a net income of approximately $730 million to $800 million.

Other metrics of interest include Coinbase's 56 million verified users and 6.1 million monthly transacting users (MTUs). Platform assets reached $223 billion, up from $90.3 billion at the end of 2020, and representing 11.3 percent of the total market value of all cryptocurrencies.

Coinbase said trading volume reached $335 billion, compared to $193.1 billion at the end of the previous quarter, per its S-1 filing with the SEC.

The crypto industry has been riding a monster wave since the end of 2020, and that's certainly reflected in Coinbase's impressive Q1 estimates. Still, the exchange is cognizant of industry volatility and says they "intend to prioritize investment, including in periods where we may see a decrease in Bitcoin price."

Looking ahead to the full year, Coinbase laid out three possible scenarios that annual average MTUs could take:

  • High: Average 2021 MTUs of 7.0 million. This scenario assumes an increase in crypto market capitalization and moderate-to-high crypto asset price volatility. In this scenario, we expect that MTUs continue to grow for the remainder of 2021.
  • Mid: Average 2021 MTUs of 5.5 million. This scenario assumes flat crypto market capitalization and low-to-moderate crypto asset price volatility. This scenario assumes a modest decline in MTUs from Q1 2021.
  • Low: Average 2021 MTUs of 4.0 million. This scenario assumes a significant decrease in crypto market capitalization, similar to the decrease observed in 2018, and low levels of crypto asset price volatility thereafter. In this scenario, we assume MTUs will decrease in a corresponding manner and end 2021 at similar levels to Q4 2020.

Coinbase plans to forego a traditional IPO and list its shares directly on the Nasdaq under the ticker symbol COIN on April 14.

Images courtesy Useacoin, Wit Olszewski