Coinbase Q1 Revenue Hit $1.6 Billion Amid ETF Approvals, Surging 72%

Coinbase, the largest U.S. crypto exchange, has released its Q1 2024 earnings report, posting a total revenue of $1.6 billion, a 72% increase quarter on quarter.

The performance has been driven by the rising crypto asset prices and the launch of spot Bitcoin ETFs in the U.S. which further improved inflows into the market.

Coinbase Earnings Surged in Q1

Coinbase’s net income reached $1.18 billion, $4.40 per share, translating to $1 billion in adjusted EBITDA in Q1. Comparatively, the adjusted EBITDA, which shows earnings before tax, depreciation, interest, and amortization, was $977.5 million in 2023.

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The earnings report also showed that Coinbase attributed its net income partly to $737 million in pre-tax unrealized gains on crypto assets. The firm ended the quarter with $7.1 billion in capital, including $1.1 billion in net cash raised through the sale of 2030 convertible notes.

Consumer transaction revenue doubled to $935.2 million, and volume mirrored this, growing 93% to $56 billion. Institutional interest increased as well with transactions gaining revenue of $85 million, a 133% increase quarter on quarter. Meanwhile, the Coinbase Prime trading volume grew 105% to $256 billion, surpassing the U.S. spot market. Notably, Bitcoin accounted for a third of consumer and institutional transactions.

Coinbase’s custodial services revenue jumped 64% to $32 million. The surge was driven by the launch of spot Bitcoin ETFs earlier in the year since Coinbase is the custodian of eight of the eleven newly launched products. Assets under custody hit $171 billion as the quarter came to an end.

Coinbase’s Base Revenue Soars, Expenses Surge

Since its August launch, Base, Coinbase’s Ethereum layer 2 chain, has amassed $56.1 million in revenue. It has exhibited double the transaction volume compared to Ethereum, alongside an 800% surge in developer activity.

During the quarter, Coinbase acquired a minority stake in Circle, the issuer of USDC stablecoin, whose market capitalization increased by 30%. This boosted subscriptions and services revenue by a third, including a 15% increase in stablecoin revenue.

Despite diversification with Base and USDC, the recent boom was due to favorable market conditions. Bitcoin’s price skyrocketed 57% to an all-time high of $73,000, fueled by over $50 billion entering 10 spot Bitcoin ETFs approved in January.

Meanwhile, the company’s transaction expenses increased by 73% to $217 million. Due to increased trading volume, the company expects even higher costs in Q2, as high as $890 million.