messari

Over the last three quarters, my Coinbase revenue estimates have handily beaten consensus analyst estimates.

I'm about to make it four.

🧵

1/

I estimate Coinbase will generate a whopping $1.5 billion in net revenue for Q1 2024 growing by 65% for the quarter. My estimate is much higher than consensus estimate of $1.2 billion for gross revenue.

2/

For this quarter, I analyzed ticker volume data to estimate the retail split of trading volume. This is a key metric because retail pays 50-100x more fee margin than institutional users. I expect retail to contribute 19% volume, slightly less than half of the volume contributed by assets other BTC, ETH, and USDT.

3/

Base sequencer revenue 5xed compared to last quarter as @farcaster, onchain summer, and EIP-4844 drove greater adoption. However, I expect Coinbase not to internalize this revenue. I expect it may hold this revenue in an onchain entity to be used only to fund future growth on Base.

4/

A sufficiently decentralized social network. farcaster.xyz

Finally, Coinbase is among the few crypto companies that has the bold leadership and pristine legacy to benefit from crypto maturing as an asset class. It is the partner of choice for TradFi firms and custodies 8/10 Bitcoin spot ETFs.

5/

But that's not all. Coinbase also has the chops to have launched multiple successful onchain products. And these products are now synergizing - for example, you can now send USDC for free on Base using the Coinbase Wallet.

The company can really do it all.

My full report includes the model, the full breakdown of revenue, my assumptions, and explanations.

My full report includes the model, the full breakdown of revenue, my assumptions, and explanations.

https://messari.io/report/spoiler-alert-coinbase-q1-2024-revenue-estimates