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Q1 beats last year in a single quarter.Are you optimistic about Coinbase, which is about to be listed?



Coinbase, the largest cryptocurrency exchange in the United States, will be listed on Nasdaq on April 14th by way of direct listing. Another milestone and a new starting point in history, on the one hand, it means that encrypted assets are integrating into the traditional capital market at an unprecedented speed; The era of "regulation". Therefore, the listing of Coinbase and subsequent changes are worthy of investors' attention. The 2021Q1 financial data was updated on Tuesday. Under the background of the cryptocurrency bull market, various data have greatly increased. 2021Q1 revenue jumped from US$190.6 million in the same period last year to approximately US$1.8 billion, and net profit increased from US$31.9 million to US$730-800 million. In 2020, Coinbase's revenue was only US$1.3 billion, and its net profit was US$300 million. In terms of trading volume, in 2020, Coinbase's encrypted asset trading volume was US$193 billion, a year-on-year increase of 142%. The transaction volume in 2021Q1 is US$335 billion. NerveNetwork has deployed 4 cross-chain bridges in Q1 of 2022: Golden Finance News, NerveNetwork, a decentralized asset cross-chain network, tweeted that 4 cross-chain bridges have been deployed in the first quarter of 2022. Currently NerveNetwork TVL has reached $35,002,737.29. [2022/3/27 14:19:51] In terms of transaction users, there were 6.1 million transaction users (MTU, Monthly Transacting Users) in 2021Q1, a year-on-year increase of 369% and a quarter-on-quarter increase of 117%. Coinbase predicts that under the most aggressive forecast, the rise in the market value of cryptocurrencies may push the MTU to 7 million. In the medium range, assuming a flat crypto market, the MTU would be 5.5 million. The most conservative forecast is 4 million. Coinbase's business type: Started from trading, it continues to expand to other businesses, and trading still accounts for more than 80% of revenue. Coinbase's products can be divided into two categories according to different types of revenue: trading service products, subscription and service products. Transaction services are divided into: 1) Payment and collection (user transfer within the platform) GameFi player social platform LAPLAP announced that new products will be launched in Q1 of 2022: On January 10th, Southeast Asia GameFi player social platform LAPLAP Thailand community held a new year in Bangkok At the reception, Zoi.Z, head of LAPLAP Asia Pacific, announced that the new product will be officially launched in Q1 of 2022. It is reported that LAPLAP has reached a strategic cooperation with OKLink, and the two parties are conducting in-depth exploration on GameFi data. GameFi player social platform Laplap is committed to leading more players to discover and pre-emptively participate in good blockchain games through Publish-to-earn (earn while distributing), fully integrate GameFi and SocialFi, and promote the construction of a more closely connected Web3 Player Ecosystem and Gaming Culture Shaping the Metaverse Era. [2022/1/10 8:39:02] 2) Investment (provide more than 45 encrypted assets and fiat currency or encrypted assets matching transactions) BTC (Bitcoin), ETH (Ethereum) and other encrypted assets in Coinbase The proportions of the overall trading volume are 41%, 15%, and 44%, respectively. 3) Consumption (In 2019, Coinbase and Visa jointly launched the debit card Coinbase Card, the underlying asset is the user's encrypted assets in Coinbase. British users can support Visa's European merchant consumption. The principle is that Coinbase sells the user's encrypted assets, and the transaction price Listed in legal currency) mining company Riot Blockchain Q1 revenue reached US$2.4 million, a year-on-year increase of 70%: On May 12th, in the latest quarterly report submitted to the US Securities and Exchange Commission (SEC), the encryption mining company Riot Blockchain disclosed its 2020 first quarter results. The report shows that as of March 31, 2020 (the first quarter), the company’s cryptocurrency mining revenue reached US$2.4 million, higher than the US$1.4 million in the first quarter of 2019, and revenue increased by 70% year-on-year. However, Riot revealed that the company has not dug up more cryptocurrencies. Its 2020 bitcoin output is 280, compared with 330 in 2019. (Cointelegraph) [2020/5/12] Subscription and service products are divided into: 1) Payment (allows developers to receive payments from mobile phone encrypted asset wallets) 2) Distribution (users can watch videos or other tasks on the Coinbase page, and get customers Encrypted asset rewards) 3) Custody (supports more than 90 encrypted assets, cold wallets) 4) Deposit currency (supports USD stable currency USDC and DAI) 5) Pledge (provides customers with the software and hardware required to operate blockchain POS nodes Environment) 6) Borrowing and lending (retail users pledge encrypted assets to obtain USD loans; provide transaction fund advance/credit services for qualified institutional users, and can repay after transaction.) In Q1 2020, bitcoin computing power fluctuated significantly Old mines Machines are being phased out: TokenInsight recently released the Crypto Mining Report for the First Quarter of 2020. The report highlights fluctuations in Bitcoin hashrate and the phasing out of older ASIC miners. However, market fluctuations have a greater impact on Chinese miners - in March this year, Antminer S9 once reached the shut down currency price. The report said that in the first few months of 2020, BTC’s hashrate was “extremely volatile” — fluctuating from 70 EH/s to 100 EH/s. The profit margins of older ASIC mining rigs are being "cracked by newer generations," the report said. The report found that the profitability of Bitmain's Antminer S9 was about 35% in the first few months of 2020, before falling into negative territory during the crypto market crash in March this year. However, the report noted that the profitability of the S9 rebounded to around 20% in April. (Cointelegraph) [2020/5/3] 7) Empowerment (data analysis, cross-chain services) Coinbase's operating income structure is relatively stable, 81-92% of revenue from 2019Q1~2020Q4 comes from trading business, 2~7% comes from Subscription and service fees, 4~15% come from other businesses. Among them, the scale of trading business income is positively correlated with Bitcoin and encrypted asset prices. In addition, the gross profit margin of the trading business is rising steadily, and will be above 85% in 2020. News | Sino-Singapore Holdings: The decline in Q1 revenue is mainly due to the decrease in blockchain services and traditional loan income: According to Zhitong Financial News, Sino-Singapore Holdings (08207.HK) announced its first-quarter results, as of March 31, 2019 3 During the first month, the group's overall revenue during the period was 528 million yuan, a year-on-year decrease of 12.6%, and the net loss attributable to shareholders was 172 million yuan. The decline in Group revenue in the first quarter was mainly due to the decrease in blockchain services and traditional loan revenue. Affected by the cryptocurrency market over the past year, the Group has been adjusting the blockchain sector business, continuously reducing and closing cryptocurrency mining-related businesses, and stopping hardware investment, and shifting its focus to the development of software and application development. [2019/5/7] In addition to the two major businesses, Coinbase's direct investment is also very important: Coinbase has participated in DeFi ecological projects including Compound and other DeFi ecological projects through the investment department Coinbase Ventures. As of December 31, 2020, the company has invested more than 100 cryptoasset projects. Challenges facing Coinbase 1) Competitive pressure from CEX rivals CEX refers to a centralized exchange (Centralized Exchange), users need to host assets (such as funds, securities, commodities) in the centralized institution of the exchange system, which is centrally provided by CEX Deal making and services. Binance, Huobi, Kraken, etc., these CEXs are not all fully compliant (such as licenses in the United States), they have a large number of encrypted asset derivative services, and the compliance threshold is lower for users. More options. 2) Dimensionality reduction from DEX strikes DEX, that is, a decentralized exchange. DEX gives users the most direct feeling of absolute control over assets (no need to transfer to a third party, but to ensure security under the control of smart contract agreements) , Pratt & Whitney (handling fees are rewarded to liquidity providers), and considering the decentralized nature of the blockchain, since it is not restricted by compliance, the community and users can set up liquidity asset pools according to market demand, providing a variety of trading pair. In the past two years, under the leadership of DEX, the DeFi ecosystem has impacted the traditional financial model at an unprecedented speed. The competition from DeFi and DEX is completely different. In the world of encrypted assets, the natural attractiveness and strong innovation ability of decentralized products and community owners can be described as a dimensionality reduction blow to CEX. The most typical representative of DEX is Uniswap, a community project with minimalist code, which has grown into a giant rivaling CEX in less than two years. According to various statistics, Uniswap has entered the top 5 in the ranking of encrypted asset exchanges The Uniswap transaction volume in 2020 is 58 billion U.S. dollars, a 150-fold increase from 2019's 390 million U.S. dollars. Significance of Coinbase’s listing: a milestone in the encryption world and a booster for industry compliance They are all manifestations of integration, and the encrypted asset market is gradually conquering traditional financial capital. In the future, we will see more encrypted assets (including derivatives) enter the traditional financial market and reach the public. 2) The listing of Coinbase has a certain role in promoting the change of regulatory rules. Taking the United States as an example, the SEC, CFTC, Congress, and state governments all have dedicated teams to conduct regulatory research on encrypted assets, showing a positive attitude towards embracing them. There will be faster iterations in the future regulatory framework, asset custody, and accounting and auditing. 3) Encrypted assets will enter the era of "compliance". According to statistics, as of February 20, 2021, 40 companies around the world, including overseas mining stocks and Tesla, have owned more than 1.31 million bitcoins through mining or direct purchases, more than bitcoins. 6% of the total 21 million, worth more than 73 billion US dollars. The launch of Bitcoin futures on CME (Chicago Mercantile Exchange) in 2018 and the launch of Bitcoin EFT on the Toronto Stock Exchange in February 2021 are proof of the gradual compliance of the encrypted asset industry, and the listing of Coinbase is another best in this trend. footnotes. Valuation: Refer to the market value of peer platform coins, and at the same time give Coinbase a certain premium in terms of compliance, brand effect, and investment layout. The exchange issued platform coins based on Ethereum and the self-developed blockchain main network. These platform coins are still traded on encrypted asset exchanges, and their market value has certain reference value. On this basis, Guosheng believes that Coinbase should be given a certain premium in terms of compliance, brand effect and investment layout.


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