Coinbase CFO raising money to weather ‘crypto winter’

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Cryptocurrency trading platform Coinbase is seeing wide adoption of its products by institutional investors, company chief financial officer Alesia Hass said during the company’s second quarter earnings call this week.

We now have 10% of the top 100 hedge funds measured by [assets under management] who are now Coinbase customers and are engaging in the crypto economy, Hass said. About a year ago, hedge funds weren’t participating in crypto.

For retail customers, she said, the company’s main product has grown, noting that customers can borrow up to $ 100,000 on their holdings through Coinbase Credit.

Alesia Hass

Courtesy of Coinbase

She said the company is stepping up its marketing, with spending for the second quarter up about 65% year-over-year, mostly on digital outlets.

Hass called the increase in adoption a key part of its growth in the number of monthly transaction (MTU) users.

Going forward, the CFO said, marketing will focus on partnerships and sponsorships.

She added that the company will be looking at new strategic channels and new venture capital channels, which could include television or outdoor advertising to increase the visibility of its products.

We need to learn and iterate to find the right balance between optimization and new channels to drive additional growth and a return on our investments over time, she said. We believe that all of these new investments in brand campaigns and strategic and venture capital channels will drive the full customer growth funnel and attract more and more people into the crypto economy, which really is our long term goal of driving a billion people into crypto and creating economic freedom.

Focus on cash flow

Hass pointed out that Coinbase wants to make sure it has enough cash and resources to withstand any extended crypto winter cycle and still be able to grow and meet its business goals.

We have no intention of offering shareholders a short-term return of capital in the form of a dividend or share buyback.

In the second quarter, Coinbase users generated a transaction volume of $ 462 billion, resulting in net revenue of $ 2 billion and adjusted EBITDA of $ 1.1 billion.

For the second quarter, average retail transaction fees were 1.26%, compared to 1.21% in the first quarter.

For transaction revenue relative to institutional trading volume, the weighted average fee was 3 basis points, up from 4 basis points in the first quarter, which Hass said was due to the per-level pricing of Coinbases and the higher volume in the second trimester.

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