Financial Associated Press| Blockchain Daily (Hangzhou, reporter Xu Cihao) news, Beijing time on February 25, Coinbase announced the fourth quarter and annual financial report of 2021. Coinbase's fourth-quarter revenue was $2.49 billion, double from $1.235 billion in the third quarter and a record high, with a net profit of $840 million, double the previous quarter.
But Coinbase expects financial performance to decline in the first quarter of 2022 as the crypto market as it enters a period of weakness overall.
The Blockchain Daily reporter noted that Coinbase founder Brian Armstrong cashed out $1.5 billion, and co-founder Frederick Ehrsam cashed out $500 million. In addition, ARK Fund and JP Morgan also reduced their holdings, and Hillhouse Capital basically liquidated them.
The number of verified users has reached 89 million
Coinbase's earnings report shows that of the total revenue of $2.49 billion in the fourth quarter of 2021, transaction revenue reached $2.277 billion, accounting for 91.45%, and subscriptions and other services contributed $213 million in revenue.
Among them, the transaction revenue from ordinary (retail) users was $2.186 billion, and the revenue from institutional transactions was $91 million, both driven by a significant increase in transaction volume. In the fourth quarter, retail user trading volume increased by 90% sequentially, and institutional trading volume increased by 59% sequentially. Retail trading volume accounted for 32%, up from 28% in the third quarter, and total transaction volume totaled $547 billion.
In terms of trading token categories, users' preference for crypto assets other than Bitcoin and Ethereum is increasing.
According to the financial report, the trading volume from Bitcoin, Ethereum and other crypto assets accounted for 16%, 16% and 68% in the fourth quarter of 2021, respectively, of which the trading volume of "other" token assets continued to climb throughout 2021, from 40% in the first quarter to 68%.
"Throughout 2021, we see a higher percentage of institutional users adopting other crypto assets." Coinbase said in its earnings report.
As of the end of the fourth quarter, Coinbase held approximately $7.1 billion in cash and cash equivalents, including gains of $3.4 billion related to the company's long-term debt issuance in 2021.
Meanwhile, Coinbase had 11.4 million monthly trading users in the fourth quarter, compared to 7.4 million in the third quarter, an increase of 54%. The number of authenticated users increased to 89 million.
Three major strategies
According to Coinbase's annual financial report, the exchange's net revenue for the full year 2021 was $7,354.8 million, compared to $1,141.2 million in fiscal 2020. Total transactional revenue was $6,837.3 million, compared to $1,096.2 million in fiscal year 2020 and total subscription and services revenue was $517.5 million, compared to $45 million in fiscal year 2020.
Coinbase's full-year net income was $3.624 billion, compared to $322 million in fiscal year 2020, diluted net income attributable to common shareholders was $3.190 billion, compared to $127 million in fiscal year 2020, and diluted earnings per share attributable to common shareholders were $14.50, compared to $1.40 in fiscal year 2020.
In 2021, the average user generated about $64 in transaction revenue for Coinbase, up 42% from 2020.
In the earnings report, Coinbase also disclosed the next three major strategies.
"The first pillar of our strategy is crypto as an investment." Coinbase said in its earnings report that it will continue to expand international investment in the future, widely launching basic Web3 products around the world, especially wallets.
In addition, Coinbase also said in the earnings report that it is building tools to expand support for the Layer 2 network and provide crypto derivatives trading.
Currently, Coinbase discloses a fair value of its crypto investments totaling $696 million.
Its second strategic pillar is "crypto in the financial system." Coinbase said in its earnings report that it plans to expand coinbase debit products to all U.S. users, allow users to spend, and earn a 4% crypto reward. In June 2021, Coinbase announced the launch of the USDC crypto lending savings product, which was suspended by the US SEC for a threat to sue.
Coinbase's third strategy is to become a crypto application platform. Coinbase said in its earnings report, "We believe Coinbase is in a good position to act as a portal for Web3 applications. ”
In addition, Coinbase is also building other decentralized applications, such as the NFT market "Coinbase NFT" and so on. It is understood that the number of registered users on Coinbase NFT's queue list has exceeded 3.7 million.
Hillhouse Capital significantly reduced its holdings
In its earnings report, Coinbase expects its financial performance to decline in the first quarter of 2022 as the crypto market as a whole enters a period of weakness.
After the release of the financial report on February 24, US time, Coinbase's stock price rose by 3.95%, and it closed at $179.56 as of the close. Compared with the opening price of $381 on the first day of listing last year, it has been cut.
Notably, Coinbase founder Brian Armstrong reduced his holdings by 5.1569 million shares in the fourth quarter, and co-founder Frederick Ehrsam reduced his holdings by 1.76 million shares. According to coinbase's average price of $300 in the fourth quarter, blockchain daily reporters estimated that Brian Armstrong cashed out more than $1.5 billion and Frederick Ehrsam cashed out more than $500 million.
In addition, in the fourth quarter, the ARK Fund also reduced its holdings by 1.5397 million shares, and JP Morgan also reduced its holdings by 1.2197 million shares.
The "Blockchain Daily" reporter noted that Hillhouse Capital increased its holdings of 70,000 shares of coinbase in the third quarter of 2021, and also reduced its holdings of 60,000 shares in the fourth quarter, and currently only holds 10,000 shares.
On February 23, JPMorgan Chase analyst Kenneth Worthington released a research report, lowering coinbase target price from $447 to $345, maintaining an "overweight" rating.
Before Coinbase's earnings report, the analyst made adjustments to its model, and the adjusted cryptocurrency price and trading volume were higher than the previous model. Since the decline in cryptocurrencies so far in 2022 has been greater than predicted, he has also adjusted his forecast for 2022.
However, after today's (25th) earnings report, JPMorgan Chase lowered Coinbase, and the target price was lowered from $345 to $296.