And that is what drove that fee for the last two quarters. It’s just continued engagement with the Coinbase Prime Suite products.
Operator: Your next question comes from the line of Joseph Vafi with Canaccord Genuity. Your line is open.
Joseph Vafi: Hi, guys. Nice results this afternoon. Maybe we could just drill down into some of the user base metrics. Obviously, I’m sure you saw a lot more trading from existing users, but just wondering how much perhaps new users contributed to the strong quarter? And then I’ll have a quick follow-up?
Alesia Haas: We haven’t broken it out, but we saw growth, yes, from existing users, users that were acquired prior to 2023 that reengaged this quarter. We saw new users and we also saw higher trading volume per user. So both of these — or all three of these metrics really contributed to the growth, but we have not attributed and provided that level of detail.
Joseph Vafi: Got it. And then just secondly, I mean the ETFs got a ton of press attention in the quarter and I think that perhaps maybe underlying Bitcoin spot trading was kind of, I guess, not mentioned as much in the press. Just wondering if you’ve got a feel kind of where if perhaps there was like a multiplier effect in the ETFs driving more Bitcoin trading. Obviously, it was the other color you’d have there as kind of a guiding metric relative to ETF activity. Thank you.
Brian Armstrong: I can take it if you want. I mean, yes, look, I think the ETFs got a lot of attention, but what we’re seeing is that, when there’s attention on crypto in general, I think it creates energy and interest across all kinds of products in the industry. So we mentioned in the opening comments that, this excitement around Bitcoin ETFs actually drove new customer adoption across our product suite and we saw all-time highs in trading volume and active clients, for instance, in our institutional business. So, I think it’s a rising tide that lifts all boats.
Operator: Your next question comes from the line of Bo Pei with US Tiger Securities. Your line is open.
Bo Pei: Hi, management. Thanks for taking my questions and congrats on the strong results. I have two questions if I may. So what is your view on the recent Wells Notice received Uniswap Labs? Do you think this will potentially impact the U.S. crypto industry and ultimately make crypto less accessible to U.S. users? And the second question also on regulatory front, it seems that the U.S. SEC wants to classify Ether as a security. If Ether is classified as a security in the U.S., how does that impact Coinbase trading service and staking business? Does that mean Coinbase have to stop offering trading for Ether and other cryptocurrencies classified as securities? Thank you.
Paul Grewal: This is Paul Grewal. I’m happy to address each of those questions. On the UniSwap Wells Notice, I think it’s noteworthy that Uniswap responded publicly, transparently and made very clear their view that none of the claims that have been suggested or presented to them have any merit whatsoever. I do think that is reflective of an emerging trend, not just in this industry, but more generally of companies taking their disagreements with the SEC publicly, always in a respectful tone, always in a constructive manner, but sharing with the wider public and certainly the wider market, on why they believe that products and services are consistent with federal securities laws and why they ultimately will prevail any action that the SEC may bring.
As for the Eth issue that has been presented in the Consensus declaratory judgment action that was recently filed, what I think consensus has done in that particular case is, again, in a very transparent, productive, constructive manner, laid there an issue that has been somewhat confused, if you look at SEC statements and positions of the commission over the last several years. The SEC has made very clear in the past that Ether is not a security. In fact, not only was that the position of senior officials at the SEC, the current Chair of the SEC said that same exact thing prior to his appointment in the years that followed. So, we’re fully supportive of both Uniswap and consensus in their view. The court process, of course, will have to play out, but we’re confident that, as Brian has always emphasized, one way or the other through these court processes, we’re going to get clarity for the market and certainly for Coinbase but unfortunately, the SEC has not been willing to provide in its own right.
Operator: Your next question comes from the line of Mike Colonnese with HCW. Your line is open.
Mike Colonnese: Hi, good afternoon, guys. Thank you for taking my questions and really great quarter here. So my question is around USDC. So the market cap has grown by over $8 billion since the start of the year. What do you consider the primary drivers supporting this rebound? And how are you thinking about growth over the coming quarters? And then as a quick follow-up to that, I saw that you mentioned in your shareholder letter that you’ve seen a step-change from legislators in recent months. So, I know these things are difficult at time, but when can we reasonably expect to see stable coin legislation passed in the U.S. and what would be the potential impacts for USDC? Thanks.
Alesia Haas: Why don’t I take the first part and then Paul, I’ll hand it over to you for the second part. So, we’re really pleased to see the broader USDC growth. As we mentioned, we saw USDC growth on our own platform, where our own on-platform balance nearly doubled in the quarter and we also saw growth in the overall ecosystem. I think there’s been recognition that USDC is a highly trusted transparent stablecoin by many market participants and that has been leading to broader adoption, largely through efforts of ourselves and other market participants. So we’ll continue to offer incentives. We’ll continue to work with the global ecosystem to make it an adopted product. And Paul, maybe you can offer comments on…
Paul Grewal: Sure, on the legislation, right. Look, we’re pleased and encouraged that Congress is paying attention to this important issue and there are now a number of proposals for legislation that are working their way through the Congress. While certain proposals, I think could and ultimately will be improved, the fact that we’re seeing Congress engage, I think is the important thing. Coinbase has been pushing for sensible legislation as to stablecoins for some time. We think it is an important complement to regulation, that we’ve been pushing for before the SEC and elsewhere. So, regardless of sort of when we — when any such legislation might pass, it’s always difficult to predict how quickly Congress can be able to engage and muster the necessary support in order to move this from mere legislation is proposed to legislation that’s enacted.
We’re encouraged by the fact, that it does seem to be a priority and we do expect to see legislation ultimately enacted that will prime standards for transparency, standards for our reserves and other important requirements around stablecoins, that we think will continue to make the U.S. an attractive market.
Operator: Your next question comes from the line of John Todaro with Needham & Company. Your line is open.
John Todaro: Great. Thanks for taking my question. Congrats on the quarter. Good results here. I guess I have two here. One, on the $300 million outlook for the April transaction revenue, does that include the other transaction revenue base? And if so, how much is that? And then second, management has talked a lot about managing through the cycle here. I know you guys spent a lot of time thinking about that. So just kind of curious your thoughts on maybe where we are in the crypto cycle or any kind of thoughts you put around that?
Alesia Haas: So I’ll answer the first part. The answer is yes. $300 million is the April total transaction revenue, which includes both consumer, institutional, and other. And we haven’t broken out the detail at this time to share with you. With regards to where we are in the cycle, it’s one of our favorite questions, Brian, do you want to take the first shot at that?
Brian Armstrong: Yes, sure. So look, I’ll leave the predictions to you all investors out there. We just mostly want to focus on building great products and tools and everything like that. But I can share just a few thoughts with you from past cycles and things that we’ve observed. So, the crypto market cap is up about 60% in Q1 and the volatility though is still below 2021 levels. So a couple of things have happened, obviously, we had the ETFs in Bitcoin, but there’s a possibility for other ETFs like in Ethereum and things like that down the road in the future. We had the Bitcoin halving as well, which kind of reduces the amount of supply being introduced into the market every block really that’s mined in Bitcoin. And so if you have the same amount of inflows, but half as much supply being generated every day, then you can imagine what that does.
And so people anticipated that and people speculate around those. But an interesting way to look at it is kind of in past cycles, what happens post-halving and historically, it’s taken about 12 months to 18 months for Bitcoin to peak after halving. So who knows if that will happen again, but it’s just an interesting data point. Yes, so those are all kind of the things that we think about. And I actually think Layer 2 is probably the biggest piece that’s coming down the pipe next. We talked about Base, getting those transaction fees under one second and $0.01 and just not only is it really interesting for global payments, but it’s interesting for lots of different applications, that can be built on blockchains. In past cycles, people started building things like DeFi and NFTs. These are things which you might periodically do a transaction and you’re okay paying kind of a higher fee for that because how often are you going to do a trade or a purchase and maybe the fee is $5, $10, $25, or whatever.
But for other types of applications like if you want to make a decentralized social network and every upvote or like button is happening on the chain or you’re in some sort of a game or like something that’s more of a daily hourly, by-the-minute use case, the costs and confirmation times have to come way down. And that’s what we’re seeing now with Layer 2. So that’s really hard to predict exactly what’s going to happen, but I think it’s pretty exciting.
Operator: We have one more question in the queue. It comes from the line of Peter Christiansen with Citi. Your line is open.
Peter Christiansen: Good evening. Thanks for the question and congrats on the great results here. I’m curious, so press reports are indicating potentially that Lumis Gillibrand could hit the floor at some point next week. And part of that, Bill, as you likely probably know is the dual banking system debate and whether or not states can issue their own stablecoins independently of the government — the federal government. I’m just curious how you see state-issued stablecoins kind of playing in the market. Is that potentially an opportunity for Coinbase? I’m just curious for your thoughts around that dynamic. Thank you so much.
