In brief

  • Coinbase posted record quarterly profit and revenue numbers.
  • In a sign it is diversifying its business, it announced $100 million in non-transaction revenue.
  • Ethereum surpassed Bitcoin in trading volume for the first time.

Coinbase announced second quarter earnings on Tuesday, posting a profit of slightly over $1.6 billion, which is nearly double what it posted in the first quarter. The company also announced revenue of $2.03 billion, which exceed analyst predictions of $1.88 billion.

The company also reported a spike in user activity, noting that retail "Monthly Transacting Users (MTUs) grew to 8.8 million, up 44% from Q1 2021," and that its total base of verified users had climbed to 68 million.

And in a sign Coinbase may finally be finding a way to diversify its revenue streams, the company reported bringing in over $100 million in subscription and services—that figure, however, is still dwarfed by the $1.9 billion in revenue from transaction fees, which remains the company's bread and butter.

In another notable milestone, trading volume in Ethereum outstripped Bitcoin for the first time on the platform, with Ethereum accounting for 26% of volume versus 24% for Bitcoin:


In its Q2 letter to shareholders, Coinbase also touted the growing variety of participants in the crypto market. The company noted it now has over 9,000 institutional customers and pointed out that Sotheby's auction house had settled its first transaction in crypto during the last quarter.

Coinbase's share price has rallied in recent weeks, brushing $280 on Tuesday morning. This is a marked improvement for the stock, which had traded as low as $220 in June, but is still a far cry from the $342 all-time-time it reached shortly after the company went public in May. After hours on Tuesday, the stock, which trades under the ticker symbol COIN, was up around 2%.

While Coinbase's earnings far exceeded expectations for the quarter, much of this was due to the unprecedented volatility of the crypto markets this spring—a period when Bitcoin hit an all-time high of above $60,000 but then briefly fell to half of that. Since Coinbase makes the vast amount of its money from trading fees, the company profited from both the bull market run-up and the subsequent crash—something that is unlikely to occur again in the third quarter, which has been marked by decreased volatility.


Coinbase acknowledged that volatility had powered its Q2 earnings and cautioned that it will be unlikely to replicate that performance. "As a result, we believe retail MTUs and total Trading Volume will be lower in Q3 as compared to Q2," said the company.

Other notable aspects from the shareholder letter is that Coinbase "added more assets for trading than we added in all of 2020," and now supports 83 assets for trading and 142 for custody, and that custodial revenues 35% from the first quarter to a total of $35 million. The latter figure is notable as revenue from custody—storing digital assets on behalf of large customers—is not subject to volatility, and has been a key strategic goal from the company for several years.

Coinbase CEO Brian Armstrong will be hosting an earnings call at 5:30pm ET today on which he is expected to answers questions about NFTs, the blockchain Solana and other queries.

Editor's note: This story was updated after publication to provide additional details.

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