Coinbase, the largest US cryptocurrency exchange operator, has reportedly exceeded its 2017 revenue forecast by more than 60%, thanks to the cryptocurrency boom seen in the final quarter of the year.
Citing unnamed industry sources, Recode reported earlier this week that the company earned $1 billion in revenue las year. The sources said that as of September 30 the company expected to make $600 million by the end of the year, but the Bitcoin’s rally between the Thanksgiving holiday in the US and Christmas helped the company to beat its own expectations by a significant margin.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
During that period Bitcoin more than doubled its price, rising to all-time highs of nearly $20,000. Ethereum and Litecoin, which are also traded on Coinbase’s platforms, also saw significant price increases.
These rallies were partly driven by a huge influx of new users at Coinbase. The platform added 100,000 new users around the Thanksgiving holiday, bringing its total user base to 13.1 million, media outlets reported at the time.
The influx of new traders boosted Coinbase’s trading volumes, which directly affect its bottom line. The company’s business model is based on collecting fees from users who buy or sell cryptocurrency through its platform.
According to the Recode report, Coinbase’s recent success hasn’t gone unnoticed in the investment circles. Shareholders in the company have reportedly told the publication that venture capitalists and private brokers have recently begun asking them if they would consider selling their shares. However, the company has warned its shareholders not to engage in conversations of that nature.
“As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market,” Coinbase recently said in a statement to Recode. “We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so.”