What is the outlook for Coinbase in the third quarter when the stock price is back to the starting point?
Editor’s note: Coinbase believes that operating data in the third quarter will be lower than in the second quarter.
On August 10, Eastern Time, Coinbase, the largest crypto trading platform in the United States, released its 2021 second quarter financial report. The financial report shows that in the second quarter, revenue was US$2.227 billion, compared with US$1.86 billion in the same period last year, an increase of 19.7% year-on-year, far higher than market expectations of US$1.78 billion.
Coinbase’s trading business performance in the second quarter remained outstanding. According to the report, Coinbase’s total transaction volume in the second quarter was US$462 billion, an increase of 38% from the previous quarter. In the second quarter, the platform’s monthly active trading users reached 8.8 million, an increase of 44% from the previous quarter, far higher than the market’s expected 6.7 million.
However, it is worth noting that Bitcoin, as the cryptocurrency with the largest transaction volume, has begun to shake its leading position. Coinbase’s Ethereum transactions accounted for the first time that Bitcoin surpassed Bitcoin. Coinbase’s second quarter financial report showed that Bitcoin accounted for approximately 24% of total quarterly transactions, down from 39% in the first quarter, Ethereum accounted for 26% of total transactions, up from 21% in the first quarter, and other crypto assets accounted for 50% of the total transaction volume, higher than 40% in the first quarter.
In addition, before the release of the financial report, Coinbase has recovered its issue price of $250. Back to the beginning of Coinbase, what will happen in the next three quarters?
The transaction volume of institutional users has increased significantly, and the transaction volume of Ethereum exceeds that of Bitcoin
(The total amount of cryptocurrency transactions in the second quarter of coinbase, source: sec)
In terms of transaction volume, Coinbase’s total transaction volume in the second quarter was US$462 billion. Among them, the retail user transaction volume this quarter was US$145 billion, an increase of 20.8% from the previous quarter’s US$120 billion. Institutional user transactions accounted for a larger portion, reaching 317 billion US dollars, an increase of 47% from the previous quarter’s 215 billion US dollars.
It is worth mentioning that many companies that are among the top Bitcoin holdings have large changes in their holdings between the first quarter and the second quarter.
According to the statistics of the portal bitcointreasuries.org, as of the end of July, MicroStrategy was still the number one firm bullish. Compared with the first quarter and April, MicroStrategy increased its holdings of Bitcoin by more than 10,000, and the total holdings reached 100,000. Above, but due to the sharp drop in the price of Bitcoin, the value of its holdings fell from US$5.3 billion to US$4.1 billion. Tesla’s bitcoin holdings ranked second, with holdings reduced by about 5,000 compared to the previous quarter, and the value of holdings also shrank significantly, from 2.5 billion US dollars to 1.6 billion US dollars. Square’s Bitcoin holdings fell from third to fifth, and there was no change in holdings. The value of the holdings fell from US$470 million to US$310 million.
From the perspective of the types of virtual currencies, Ethereum accounts for 26% and Bitcoin accounts for 24%. This is the first time that the transaction volume of Ethereum surpassed Bitcoin on Coinbase’s trading platform.
Coinbase stated in the report that the decline in bitcoin trading volume may be due to the decline in total bitcoin trading volume “as a percentage of global exchange spot trading volume” and the increase in many new assets that have increased people’s interest and speculation. Coinbase attributed the increase in ETH transaction volume to the growth of the DeFi and NFT ecosystems, as well as the increased demand brought about by ETH 2.0 staking.
Although the proportion of Bitcoin transaction volume has declined, it is still the main force of Coinbase’s asset reserves. According to the data, as of June 30, the total assets on the platform were 180 billion U.S. dollars, and the encrypted assets on the platform accounted for 11.2% of the total market value of encrypted assets-of which BTC accounted for 47%, ETH accounted for 24%, and other cryptocurrencies Assets account for 25%.
The issuance price of US$250 was recovered in the second quarter, but the expectations for the third quarter are not optimistic
Although Coinbase’s performance in the second quarter was better than market expectations, Coinbase’s performance in the capital market in the second quarter was average. Since May, Coinbase’s stock price has been below the issue price of $250, with a historical low of $208. However, before the release of the second quarter earnings report, Coinbase has recovered the issue price. As of August 13, Coinbase’s share price was quoted at $256.50.
How does Coinbase predict its performance in the third quarter?
Regarding the third quarter performance guidance, Coinbase said that in July this year, monthly active trading users fell to 6.3 million, and the transaction volume fell back to 57 billion US dollars. Although the data has rebounded slightly since August, it is still weaker than the beginning of the year. Therefore, the company believes that the operating data in the third quarter will be lower than in the second quarter.
In addition, regulatory risks are still the biggest worry for crypto asset platforms such as Coinbase.
In his speech at the event, SEC Chairman Gary Gensler compared the cryptocurrency trading environment to the “Wild West”, implying that many trading platforms are offering illegal securities products that are not registered with the SEC and accept its supervision.
Coinbase has also stated in a document submitted to the SEC that if the regulator concludes that its platform is used to trade unregistered policies, the company may face penalties.
Wedbush Securities analyst Moshe Katri released a research report, reiterating Coinbase’s “Buy” rating and raising the target price from US$275 to US$300.
Katri said that Coinbase performed well in the second quarter. Its revenue, adjusted EBITDA and EBITDA margin have all exceeded Wall Street’s consensus expectations. However, as cryptocurrencies fell sharply at the end of the second quarter, Coinbase’s platform trading volume also declined.
The analyst expects that from the third quarter, Coinbase’s total trading volume will decline. This is understandable, because the company’s transaction volume in the same period last year increased by 1550% year-on-year, and transaction revenue increased by 1023% year-on-year. However, Katri added: “The decline in the value of crypto assets on the platform appears to be the result of quarterly declines in cryptocurrency prices, not a decline in usage.” The company still has multiple monetizable opportunities and is expected to continue to enhance long-term profitability. ability.
Based on the recovery of the issue price of Coinbase and the recent recovery of the prices of cryptocurrencies such as Bitcoin and Ethereum, the share prices of the currency market and related industries are showing signs of recovery, including the top currency holding companies such as microstrategy and Tesla. The market also performed well. It can be seen that the currency market has a strong correlation with the stock prices of related industries. For this reason, whether Coinbase can stabilize the issue price in the future will largely depend on the performance of the entire cryptocurrency market in the third quarter.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-is-the-outlook-for-coinbase-in-the-third-quarter-when-the-stock-price-is-back-to-the-starting-point/
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