Coinbase recently filed its widely anticipated registration statement, offering a first glance at its financials before it goes public. The largest cryptocurrency exchange in the U.S. is planning a direct listing on the Nasdaq in which it will seek to raise as much as $1 billion. Coinbase was recently valued at more than $100 billion in private market trading, meaning this could be the largest tech IPO since Facebook's in 2012.
Here are nine numbers you will want to know about Coinbase before you buy shares.
1. $322 million
This is the profit Coinbase generated in 2020, a sharp improvement from the company's $30 million loss in 2019. The big increase, of course, has to do with the surging popularity of Bitcoin (CRYPTO: BTC), whose value rose almost 500% from its depths last March to finish the year over $29,000. Most of Coinbase's revenue comes from transaction fees the company collects processing volume-based trades on its platform. Earlier this year, Bitcoin peaked over $58,000 before retreating, which likely means Coinbase is off to great start in 2021.
Image source: Coinbase registration statement.
2. $1.28 billion
This is how much total revenue Coinbase made in 2020, representing a nearly 130% increase from 2019. In addition to transaction fees, Coinbase collects revenue from subscriptions and services -- holding assets under custody, providing analytics, and more. Other revenue includes the sale of crypto assets when Coinbase is the principal in the transaction, as well as interest income earned on cash and cash equivalents.
3. $1.09 billion
This is total transaction fee revenue, which makes up 85% of total revenue and 96% of net revenue. This amount is up 137% since 2019. Transaction revenue comes from retail investors or individuals and institutional customers such as hedge funds, family offices, principal trading firms, and financial institutions on the institutional platform.
4. 43 million
This is how many verified users Coinbase could boast in 2020. The company also supports 7,000 institutions and 115,000 ecosystem partners in over 100 countries. Users spiked by more than 34% from 2019 and helped transact more than $190 billion of trading volume. The company also said it had 2.8 million monthly transacting users.
5. 11.1%
The share of the crypto market that Coinbase controls. In other words, out of the $782 billion worth of assets on the crypto market, some $90 billion worth is held on the Coinbase platform. That number is up from 8.3% in 2019.
6. 70%
The amount of assets in the form of Bitcoin on Coinbase's platform. There are obviously tons of other crypto assets now, but Bitcoin has remained the most valuable. The remaining 30% of assets on Coinbase are largely tied to Ethereum (CRYPTO: ETH), the second-biggest cryptocurrency, and other crypto assets.
7. $119 billion
This number represents the amount of institutional trading volume that took place on Coinbase in 2020, which tops the $73 billion Coinbase handled in retail trading volume. While Coinbase said trading volume is directly correlated with transaction revenue, which is influenced by both Bitcoin prices and crypto asset volatility, the company also said that retail trading is more heavily influenced by these factors. The platform experiences lower fluctuations from institutions. As institutional trading grows on Coinbase, the company expects the link among the price of Bitcoin, crypto asset volatility, and trading volume to ultimately decline.
8. $1.04 billion
This number might surprise you -- I know it surprised me -- but this is the amount of total transaction revenue that came from retail investors in 2020, meaning it makes up about 95% of all transaction revenue. This might seem counterintuitive considering I just said institutional trading volume makes up a larger share of total trading volume than retail trading volume. But Coinbase uses a tiered-pricing system on transactions. The more money someone transacts, the smaller the fees, because Coinbase values the more stable liquidity these institutions bring to the platform.
9. $868.5 million
Coinbase's total operating expenses in 2020, which includes transaction expenses, tech and development, sales and marketing, general and administrative expenses, and restructuring. Operating expenses grew close to 50% from 2019, but that's OK, considering revenue grew 130%.
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Bram Berkowitz owns shares of Bitcoin and Ethereum. The Motley Fool recommends Bitcoin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
