Due to market volatility, Coinbase offered a wide variety of options this year.
Coinbase, the eight-year-old, privately owned San Francisco-based company that provides a trading platform for Bitcoin and other crypto-currencies, released its financial results for 2021 on Tuesday evening and said it expects a wide variety of market scenarios this year, including a dramatic price drop.
Bitcoin's price has risen in the last six months, from $10,600 to over $57,000 U.S. dollars per Bitcoin, as businesses including Tesla, PayPal, and Square have focused on purchasing Bitcoin deposits and allowing consumers to trade in the currency.
Coinbase, which makes money by charging people to buy and sell currencies on its website, reported 6.1 million transacting users, or MTUs, in the three months ending in March.
"Given the inherent unpredictability of our market [...] we are presenting a variety of potential scenarios for full-year 2021," the company said in its outlook for this year.
In the "big" case, crypto's total market capitalization continues to rise, bringing Coinbase's MTUs to 7 million.
A "middle" scenario "assumes flat crypto market capitalization" and "low to moderate volatility" in crypto prices, according to the firm. MTUs could be reduced to 5.5 million as a result, according to the study.
According to the firm, the "small" scenario will result in a "major decrease in crypto market capitalization, close to the decrease observed in 2018," "Thereafter, there will be low levels of crypto-asset price volatility."
In 2018, the price of Bitcoin plummeted from over $19,000 per Bitcoin to under $4,000.
"In this case, we expect MTUs to decline in lockstep, ending 2021 at levels close to Q4 2020."
The rise in crypto prices has benefited the company's volume of sales, according to its own results. In the March quarter, Coinbase produced $1.8 billion in revenue from $335 billion in trading volume on its platform. The company anticipates a net profit of $700 million to $800 million from this operation.
Since 2015, Coinbase has raised $539 million in venture capital from AH Capital Management LLC, Manhattan Venture Partners, Y Combinator, and Initialized Capital Management, among others.