Coinbase: In Q2 2021, Ethereum Passed Bitcoin in Trading Volume

Coinbase has released its Q2 2021 earnings report. The document reveals a number of important milestones for the exchange, such as having its highest monthly transacting users and its highest net revenue. Although, perhaps the most fascinating revelation is Ethereum’s trading volume surpassing that of Bitcoin on the platform—for the first time ever.

Coinbase: Ethereum Sees More Trading Volume than Bitcoin

Ethereum’s trading volume increased from 21% in Q1 to 26% in Q2. Whereas Bitcoin’s volume decreased from 39% to 24%. This put ETH two points higher than BTC in Q2. 

This is the first time Ethereum has overtaken Bitcoin on the platform, possibly marking a shift in perspectives within the crypto community. Coinbase’s shareholder letter suggests this is “driven by growth in the DeFi and NFT ecosystems (where Ethereum is an important underlying blockchain), and increased demand driven by our ETH2 staking product.” 

ETH’s trading volume has increased by 73% in the space of a year, as in Q2 2020 it only had 15% of the share. Some see this as a sign of the “flippening”, adding to the narrative that Ethereum may one-day reign supreme in the crypto landscape. 

The report suggests Bitcoin’s reduction in trading volume is derived from the exchange adding more altcoins to its platform, enticing people to diversify. This is very different from how Coinbase used to operate a couple of years ago, only listing the highest performing assets. In fact, a total of 22 assets were added to Coinbase in Q2, the highest number in the exchange’s history. 

It’s also worth mentioning altcoins made up half of Coinbase’s trading volume in Q2. The last time this happened was in Q3 2020. 

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Revenue, Stablecoins, and Decentralization

In this quarter, Coinbase reinforced itself as a market leader. It reached 8.8 million monthly transacting users, making for an annual 486.66% increase from 1.5 million. It also saw net revenue of $2 billion, a staggering 1,040% annual increase, from $178 million. 

USDC has been seeing great usage as well, starting at a $10 billion market cap in the beginning of April, and reaching over $25 billion by the end of June. This is one of Coinbase’s main methods of entering the DeFi market, with the shareholder report noting USDC is “increasingly a key component of the DeFi ecosystem”. 

While Coinbase certainly seems interested in DeFi, in the Earnings Call, CEO Brian Armstrong appeared to place a higher focus on promoting decentralization, rather than merely entering other areas in the industry.

He said: 

“[T]he concept of embracing decentralization is bigger than just NFTs or DeFi or whatever the hottest thing is that’s happening this month in crypto. It’s also about us embracing a global mindset. We are trying to build a company that enables people all over the world to access the cryptoeconomy. So, we’re doing a lot of effort in international expansion.”

With high revenue, trading volumes, and monthly transacting users, Coinbase has continued to secure its spot as a top-performing exchange. With the company turning public, this is perhaps their most important quarterly report, as it shows the world how valuable the platform is, and how much demand there is in the crypto market. 

Do you think Coinbase’s Q3 report will outperform this quarter? Let us know in the comments below.