Coinbase reports Q1 revenue of $1.8B as Crypto Council for Innovation launches
As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
COINBASE REPORTS Q1 REVENUE: Coinbase (COIN) reported on Tuesday estimated first quarter total revenue of $1.8B and trading volume of $335B. The company also posted net income of approximately $730M-$800M and adjusted EBITDA of approximately $1.1B. Coinbase expects to report 56M verified users and 6.1M monthly transacting users for Q1 and sees $223B in assets on the platform. The company also guided towards a one-time expenses of approximately $35M in Q2 related to its direct listing as well as 2021 technology and development expenses and general and administrative expense between $1.3B-$1.6B. Following earnings, JMP Securities analyst Devin Ryan said based on the report, revenues have increased about 2,600% over the past two-year period, verified users have increased 107% in that time, assets have increased nearly 2,700%, and the firm's asset market share of the overall crypto market capitalization has roughly doubled to 11.3% since the first quarter of 2019. The analyst points to these figures as highlights of Coinbase's "substantial business momentum."
CRYPTO COUNCIL LAUNCHES: The Crypto Council for Innovation, convened by Paradigm, launched on Tuesday with member organizations including Coinbase, Fidelity Digital Assets and Square (SQ). The Council said it “launched with a mission to unlock the transformational promise of crypto. CCI is a new alliance of crypto industry leaders that will support governments and institutions worldwide by informing and encouraging responsible crypto-related public policy and will educate the public about crypto's potential to create positive change.” The alliance said it will work to find areas of alignment and drive consensus on the industry’s policy priorities as well as develop resources to enable a better understanding of crypto benefits.
RIOT TO ACQUIRE WHINSTONE: Riot Blockchain (RIOT) announced Thursday that it has signed a definitive agreement pursuant to which Riot will acquire Whinstone US for consideration of $80M cash plus a fixed 11.8M shares of Riot common stock, equal to an implied total transaction value of approximately $65M based on Riot's last closing price of $48.37. The company said, Whinstone is the owner and operator of North America's largest Bitcoin hosting facility, with 300 MW in developed capacity and an attractive long-term power purchase agreement…The acquisition of Whinstone is a transformative event for Riot and its shareholders. Riot views Whinstone as a foundational element in its strategy to become an industry-leading Bitcoin mining platform, on a global scale. Upon the closing of this acquisition, Riot is expected to be the largest publicly-traded Bitcoin mining and hosting company in North America, as measured by total developed capacity.” The transaction is expected to close in the second quarter of 2021, subject to the satisfaction or waiver of customary closing conditions, including receipt of required regulatory clearances.
MICROSTRATEGY BUYS 253 BITCOIN: In a Monday regulatory filing, the company said, "On April 5, 2021, MicroStrategy Incorporated announced that it had purchased approximately 253 bitcoins for $15M in cash, at an average price of approximately $59,339 per bitcoin, inclusive of fees and expenses. As of April 5, 2021, the Company holds approximately 91,579 bitcoins that were acquired at an aggregate purchase price of $2.226B and an average purchase price of approximately $24,311 per bitcoin, inclusive of fees and expenses."
MARATHON PRODUCES 196 BITCOIN IN Q1: Marathon Digital Holdings (MARA) published unaudited bitcoin production and miner installation updates for Q1, ended March 31, 2021, on Thursday. The company produced 196 new minted bitcoins in the quarter , increasing total bitcoin holdings to 5,134.2 with a fair market value of approximately $301.9M as of March 31, 2021. At March 31, 2021, cash on hand was approximately $212M and total liquidity, defined as cash and bitcoin holdings, was approximately $513.9M. The company also reported receipt of approximately 10,300 S-19 Pro ASIC miners from Bitmain during the first quarter of 2021. In the first quarter of 2021, Marathon's mining fleet produced 196 newly minted bitcoins. The Company's active mining fleet at the end of the first quarter of 2021 consisted of approximately 6,800 miners, generating approximately 0.71 EH/s.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), Ideanomics (IDEX), Riot Blockchain, Pareteum (TEUM) and SRAX (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin dropped roughly 1.5% this week at $58,440 in U.S. dollars, according to TradeBlock.