Coinbase, the largest U.S. cryptocurrency exchange by trading volume, today reported a third-quarter profit of $406 million, or more than $351 million.
Increase compared to Q3 2020
The amount represents an increase of 500% from the third quarter of 2020. Nevertheless, it is a significant decrease from the record period of April to June, the first reporting period as a publicly traded company. Net income at the time reached $1.6 billion.
Financial companies with crypto products have mostly reported lower Q3 revenues compared to Q2. The markets were seeping through then. This was something Coinbase CFO Alesia Haas alluded to in today’s investor call. She said trading volume across the crypto spot market fell in the third quarter.
Square, which allows buying and trading Bitcoin through its Cash App, announced a 23% drop in Bitcoin revenue in Q3. This contributed to a slight decline in the company’s overall profit. Robinhood’s decline was steeper, with crypto earnings falling 78%. The total revenue of the stock and crypto trading app dropped from $565 million to $365 million.
However, if we zoom out to year-over-year revenues, the picture is brighter. All three companies see crypto as a long-term strategy rather than a short-term solution.
Expansion of assets
Coinbase is rapidly expanding its listings. Unlike previous quarters, Bitcoin and Ethereum no longer controlled the majority of trading volume or transaction revenue. Bitcoin and Ethereum revenues fell from 26% each of the total in Q2 to 21% and 22% in Q3. Other crypto assets accounted for 57% of transaction revenue as well as 59% of trading volume.
The crypto exchange has been working on adding new assets. It quickly expanded from the core five that kept it on tap just three years ago. The most notable addition was Dogecoin, which jacked up the company’s coffers when it was added in early June, and Shiba Inu, the DOGE customer that began trading at the end of the previous quarter. hare said:
“We don’t know exactly which assets customers will adopt, so our strategy is one that supports all legal assets.”