Coinbase, the cryptocurrency exchange, said on Tuesday that its quarterly revenue soared by more than 1,000 percent and profits skyrocketed nearly 4,900 percent from a year earlier, in its second earnings report as a publicly traded company.
Revenue totaled $2.2 billion in the three months ending in June, up from $186 million a year ago. Profit was $1.6 billion, compared with $32 million a year earlier.
Coinbase went public in April, around the time the price of a single Bitcoin topped a record $60,000. The digital currency has since slumped and now hovers at around $45,337. In its earnings report, Coinbase warned of volatility and said it expected trades, its main source of revenue, to fall in the coming months.
Coinbase’s listing served as a validating moment for cryptocurrencies, which have often been dismissed as a tool for criminals and speculators. But the company, which trades on the Nasdaq stock exchange and is valued at $70 billion, has shown that a large, profitable and legal business can be built to service the growing groups of people who want to use the digital currencies.
Alongside Coinbase’s public listing, the run-up in the price of Bitcoin and other cryptocurrencies sparked a wave of mainstream interest in the digital assets. Tesla and Square have bought a stockpile of the tokens. Wall Street banks have expanded their crypto offerings. El Salvador has even said it will accept Bitcoin as legal tender.
That also has prompted more regulatory scrutiny. China has cracked down on cryptocurrency mining operations. U.S. regulators are investigating ways to tax and control the assets. This week, the Senate approved an infrastructure spending bill that included new taxes for digital assets, which industry leaders opposed for being too vague and broad.
In a letter to shareholders, Coinbase cited data that said 13 percent of Americans have traded cryptocurrencies in the last year, compared with 24 percent who have traded stocks. “These adoption trends paired with recent government attention on crypto as a revenue source suggests we have reached an inflection point,” the company said. “Crypto has arrived.”