Coinbase Reports $406M Earnings For Q3 – Down 75% From Previous Quarter
Coinbase, one of the leading cryptocurrency exchanges, reported its Q3 earnings of $406 million today, down 75% from Q2.
Looking at the year-over-year number shows a 500% increase over Q3 2020 for the NASDAQ-listed crypto exchange, which seems very impressive. However it’s a sizable drop from its Q2 2021 record – its first reporting period as a publicly traded company. The previous quarter Coinbase earnings were at $1.6 billion.
Majority of financial companies with crypto products have been reporting reduced Q3 revenues compared to Q2, when markets were very active. Coinbase CFO Alesia Haas pointe out in today’s investor call: “Trading volume across the entire crypto spot market declined quarter over quarter in Q3.”
Cash App Square, which facilitate Bitcoin buying and trading announced a 23% drop in Bitcoin revenue in Q3, contributing to a slight decrease in overall profit for the firm.
Robinhood’s revenue from crypto fell 78% between Q2 and Q3. Total revenue for the stock and crypto trading app sunk from $565 million to $365 million.
Looking at year-over-year earnings paints a prettier picture. All three companies have crypto as a long-term strategy rather than a short-term fix.
Coinbase is expanding its coin listings, and Bitcoin and Ethereum no longer represent the majority of trading volume or transaction revenue. Revenue from BTC and ETH was down from 26% each of the total in Q2 to 21% and 22% in Q3, while alternative crypto assets recorded 57% of the transaction revenue, as well as 59% of trading volume.
The exchange has rapidly expanded from the core five crypto assets it was only offering recently as three years ago. The most notable addition has been Dogecoin, which brought a significant revenue to the company’s coffers when it was added at the beginning of June, and the competing meme coin Shiba Inu, that began trading on the exchange towards the end of last quarter.
Commenting on the company’s strategy on listing assets, Haas said:
“We don’t know precisely which assets customers are going to adopt, so our strategy is one that supports all legal assets.”
