Coinbase Saw $1.6 Billion in Profit in Q2 2021

Key highlights:

  • Coinbase generated $2.2 billion in net revenue and $1.6 billion in profits in Q2
  • Ethereum accounted for a bigger share of Coinbase’s total volume than Bitcoin
  • The lion’s share of Coinbase’s revenue came from transaction fees paid by retail traders

Coinbase generated $2.2 billion in net revenue and $1.6 billion in net profit in Q2 2021

United States-based cryptocurrency exchange Coinbase generated a total of $2 billion in net revenue in Q2, according to the company’s latest shareholder letter. The $2.2 billion in net revenue translated to a quarterly profit of $1.6 billion. 

The lion’s share of Coinbase’s Q2 revenue ($1.93 billion) came from transaction fees, with $1.82 billion coming from retail traders. Coinbase generated 26% more revenue from transaction fees than it did in Q1. 

Other sources of revenue included cryptocurrency custody fees, the exchange’s Earn campaign, interest income, “blockchain revenue” and “other subscription and services revenue”. These sources of revenue combined for $102.6 million. 

Coinbase handled $462 billion worth of trading volume during Q2, representing 38% growth compared to Q1. Notably, Ethereum had a greater share of Coinbase’s Q2 volume than Bitcoin (26% for ETH vs. 24% for BTC). Coinbase noted that ETH2 staking, as well as growth in the DeFi and NFT sectors, were some of the reasons for why Bitcoin’s share of the total trading volume declined. 

Retail traders accounted for 31% of the total trading volume, while 69% of the volume came from institutions. Coinbase noted that it saw a rapid increase in institutional onboarding in Q2, and also observed higher capital allocations from this type of client. 

Coinbase concluded its shareholder letter by sharing an optimistic outlook for the adoption of cryptocurrency and blockchain technology among both mainstream customers and institutional players:

“We believe the products that the most crypto-forward people are using today such as DeFi will be used by mainstream customers soon, and by institutions soon after that. Coinbase has our eye on the future and is investing to ensure we are bringing the next generation of products to all so we can increase economic freedom in the world.”

Coinbase stock is up 6.6% today, reflecting the fact that the company’s Q2 earnings surpassed estimates. 

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