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SBF
@SBF_FTX
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@SBF_FTX
7) Another interesting thing to note here: retail vs institutional. In Q2, Coinbase made $1.8B on retail fees, and $0.1B on institutional fees. So 90% of their revenue is from retail trading fees, 5% instos, and 5% custody/staking.
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SBF
@SBF_FTX
1) The other crypto IPO
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SBF
@SBF_FTX
8) Again, reports will talk a lot about the institutional clients Coinbase is winning, and that really is important to the future of their business! But I think they often miss the numbers here. When it comes to retail, Coinbase blows everyone else out of the water.
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SBF
@SBF_FTX
9) In fact! In 2021Q2, Coinbase made $100m revenue on institutional trading fees. FTX made... $100m. I'm actually not sure which made more on institutional trading fees; they're within a few % of each other. But on retail, Coinbase is massively bigger than FTX.
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SBF
@SBF_FTX
11) Coinbase had $1.3B of expenses in 2021Q2 alone. Removing one-time costs (e.g. listing), its revenue was $2B and its EBITDA was $1B. So they had about $1B of expenses in 2021Q2, for a run rate of $4B/year.
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SBF
@SBF_FTX
12) This is roughly evenly distributed between --"transaction expenses" (gas?) --Tech --Marketing --Payroll They spent roughly $250m on each. They had ~2k employees, so that implies ~$400k/year/employee, which makes sense given the workforce.
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SBF
@SBF_FTX
13) For context, FTX's expenses in 2021Q2 were around $50m (excluding buy/burn). The big differences were.... I guess everywhere? I guess 5% of the expenses aren't surprising given we also have 5% of the employee headcount.
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SBF
@SBF_FTX
14) One of the biggest questions I've been thinking about recently: Big companies tend to have big teams. Is that necessary? Is that correct? What happens if you try to build a big company with a medium sized team? Is it efficient and nimble, or is it just overloaded?
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SBF
@SBF_FTX
15) Note that 2021Q2 was probably an unusually good quarter for Coinbase! Volumes and volatility were high. I would expect Q3 to be lower.
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DREWrightnow.Ξth(JPeG,PnG)
@Dr3wrightnow
Replying to
@SBF_FTX
An amazing review as always. Genuine question. I wonder why you think that Q3 will be lower as we are picking up the momentum to finish the year strong and have bigger run than Q2. Wouldn't that bring more volume in transactions and in general to them?
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