Cryptocurrency exchange, Coinbase, has reported a positive impact on its revenue growth due to the recent uptick in digital asset prices. However, concerns have been raised over the company’s dependence on market trends.
Revenue Growth Beats Analyst Forecasts
According to Coinbase’s Q1 report, the company’s revenue for the quarter was $736 million, up 22% sequentially and beating analysts’ forecasts. The report also showed that the growth came mainly from trading and subscriptions and services, indicating the impact of digital asset prices on the company’s business.
MTUs Show Slight Increase
Despite a slight decrease in monthly transacting users (MTUs) year-over-year, the number of MTUs was a slight increase compared to the 2022 average of 8.3 million. This suggests that the recent uptick in digital asset prices was good for the company’s appeal to retail traders.
Also Read: Secret Meeting of Legal Titans: Will Coinbase Relist XRP Amid Ongoing SEC Battle? – Coinpedia Fintech News
Cutting Operating Expenses with Agile Teams
Coinbase CEO, Brian Armstrong, noted during an earnings call that the company took a more disorganized approach with agile teams, allowing them to cut their operating expenses by 24% quarter-over-quarter.
The CFO, Alice Hass, attributed the better-than-expected revenue from subscriptions and services to a bump in Bitcoin and Ethereum, which bolstered revenue from custody services and staking.
The company faced headwinds last year, with trading volume totaling $145 billion in the first quarter, a drop compared to $309 billion a year ago.
Confrontational Approach towards Regulation
Despite its dependence on market trends, Coinbase is adopting a confrontational approach towards regulation and launching a Bermuda-based exchange to offer financial products like perpetual futures on Bitcoin and Ethereum that are not permitted in the US.
Source: https://coinpedia.org/news/coinbase-exceeds-q1-expectations-leading-to-7-9-surge-in-share-price/