Analysts Sound Alarm on Coinbase Future Profitability
In the run-up to last week’s IPO, Coinbase released its Q1 2021 figures, revealing an impressive set of numbers. Highlights include $1.8bn revenue and the doubling of its monthly active user base to 6mn.
Its biggest money-spinner is trading fees, which came in at $1.1bn and accounted for 86% of its total revenue last year. This equates to 0.57% of every transaction.
“In 2020, Coinbase collected about 0.57% of every transaction in fees, which totaled $1.1 billion in trading revenue on $193 billion in trading volume. These trading fees made up 86% of revenue in 2020.”
But competition from the likes of Kraken, Gemini, Bitstamp, and Binance, will see trading fees fall away in a race to the bottom. Some analysts have pointed out, based on Q1 2021’s figures, this is already in motion.
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