Coinbase made $771 million in profit in the first quarter, benefiting from cryptocurrency mania.
Cryptocurrency exchange Coinbase announced Thursday that its quarterly earnings were up more than 20x year-over-year as revenues skyrocketed, a sign of how craze for digital currencies has become mainstream in the pandemic .
Coinbase announced it had sales of $ 1.8 billion for the first three months of the year, up from $ 191 million for the same period last year. Income rose from $ 32 million to $ 771 million. It was the company’s first earnings report since going public last month.
However, Coinbase also warned that rivals are flooding the market and increasing competition. The company has invested heavily in marketing and development to stay one step ahead of its competitors.
“The rapid expansion of the crypto-economy also poses challenges for Coinbase,” said a letter to the shareholders. “We must continue to act quickly to address them, and that inspires us to act and grow.”
Coinbase, one of the world’s largest cryptocurrency companies, was valued at $ 85 billion when it went public last month. The listing marked a major milestone in an industry that had long been derided as too risky or unsafe for mainstream investors. Coinbase makes it easier for customers to buy and sell digital currencies like Bitcoin and reduces every transaction.
Bitcoin and other digital currencies have appreciated in value in recent months as buyers found new uses for the assets and a wave of market madness gripped the financial world during the pandemic. That surge has also fueled Coinbase’s growth and profits. On Thursday, 56 million people were verified on its platform, up from 34 million the previous year.
However, Coinbase’s share price has fallen as cryptocurrencies have fallen from their highs and market cap is now at $ 53 billion. On Wednesday, Elon Musk, CEO of Tesla and a supporter of the cryptocurrency, tweeted that Tesla would no longer accept Bitcoin as a means of payment for cars for environmental reasons, and Bitcoin’s value fell. A bitcoin was worth less than $ 50,000 on Thursday, compared to more than $ 63,000 in mid-April.
Coinbase was also criticized as it grew. Customers said the company ignored their requests for help when their digital assets were stolen or blocked from their accounts. Current and former employees have also said that Coinbase treated black and female employees unfairly.
This week, Coinbase announced it was increasing its employees’ compensation to stay competitive and reduce uncertainty. At the beginning of the company, employees will no longer negotiate salaries, which “can leave women and underrepresented minorities disproportionately behind,” according to a blog post.