Coinbase, one of the largest crypto trading platforms in the world, announced its second-quarter results yesterday which showed a huge jump in its profits and revenue during this period when compared to last year.
The company raked in a profit of $1.6 billion in the second quarter of 2021 as compared to $32 million when compared to the same period last year. Likewise, its revenue also jumped to $2 billion when compared to $178 million last year. On the face of it, these are very good results for the company which went public only last year and it shows that crypto trading is here to stay. But this also points to volatility in the crypto market which is likely to determine the revenues and the profits that the company would be making in each quarter.
“It’s going to be bumpy,” Coinbase President and Chief Operating Officer Emilie Choi said. “And that’s actually the way that we built the business. We’re used to the volatility. We embrace the volatility.”
The first half of the year did see a lot of volatility in the crypto markets as the BTC prices made record highs and this was then followed by a big crash and all this volatility would certainly have helped to boost the revenue and the profits of the exchange and not only Coinbase, every other exchange is likely to have made the most of all the trading volume that accompanied the volatility.
The total trading volume at Coinbase grew by 38% with the institutional trading volume growing by 47% and the retail trading volume growing by 21% a typical response when because the prices were dropping for much of this period. At such times, the institutions continue to try and accumulate and the retailers try and bail out of it as much as they can.
The company’s outlook for the next quarter is that it expects lower revenue and lower growth in the quarter. It didn’t give any specific reasons for the same but it would be because it expects the prices to remain stable during this period which means that the interest for trading from the users is likely to be low. It is also likely to face some strong competition from other exchanges in the US like FTX and others.