Crypto exchange Coinbase, in an investor letter late Thursday, released its first quarterly report for the year. Its shares reacted well to the news, soaring over 7% in after-hours trading gains as the exchange surpassed revenue expectations.
Coinbase revealed it made 23% quarter-to-quarter gains in a strong financial report. The exchange made $736 million in the year’s first quarter, surpassing the analyst’s $658 million expectations. The figures also beat its last quarterly update gains, clearly reflecting improved crypto market conditions.
Anil Gupta, vice president of investor relations at Coinbase, attributed the growth seen in the quarterly report to increased revenue from trading, subscriptions, and services. Although there was a drop in trading volume on a year-on-year scale, the first quarter’s monthly transaction users (MTUs) increased slightly from the previous quarter, moving from 8.3 million MTUs to 8.4 million MTUs.
The USDC Magic Continues
Coinbase revealed that interest income skyrocketed by 32%, beating analysts’ forecasts. The largest US-based crypto exchange made $240 million in interest gains against the $205 million estimated and $182 million from the previous quarter.
A majority of these interests have once again come from the exchange’s USDC holdings. Its USDC reserves outperformed other interest sources, accounting for over 80% of total earnings. USDC made Coinbase $199 million last quarter and $182 million in the previous one.
However, the continuation of the USDC magic remains in doubt as the recent depeg affected the stablecoin. The declining circulating supply of USDC could impact the revenue of Coinbase in the future; Gupta even noted that the effect might start surfacing in the second quarter report.
Coinbase Prepared for the SEC’s Regulatory Battle
Coinbase reiterated its preparedness to slug it out with the Securities and Exchange Commission in its ongoing regulatory push. The exchange briefed investors that it is yet to find a clear concern that the US regulator has against it and the crypto industry at large. However, Coinbase noted that it is ready to fight the SEC.
According to Coinbase, it would prefer that Congress step in and create clear crypto regulations in the country. The exchange then insinuated it would take drastic action against the incessant regulatory crackdown before the end of the second quarter.
