Cryptocurrency Exchange FTX’s Revenue Grew By 1,000% In 2021

Twitter icon  •  Published vor 1 Jahr  •  Hassan Maishera

The revenue of cryptocurrency exchange FTX grew by 1,000% in 2021, allowing it to rapidly expand its services and become a major player in the crypto market.

A new report by CNBC has revealed that cryptocurrency exchange FTX’s revenue increased by 1,000% last year. The massive growth came at a time when the cryptocurrency space was in a bull market.

CNBC, which saw internal documents, revealed that the audited financials showed a rare glimpse into the privately held company’s finances. 

The finances showed that FTX was profitable last year, which allowed the crypto exchange to expand quickly across the globe and recorded massive growth over the past few months. 

The report revealed that FTX’s revenue grew from $89 million to $1.02 billion in 2021, a rally of over 1,000%. FTX’s operating income for 2021 was $272 million, up from $14 million a year earlier. Meanwhile, its net income last year was $388 million, up from just $17 million a year earlier.

An investor deck shared with CNBC reported that the company could record $1.1 billion in revenue in 2022 after generating $270 million in the first quarter of the year. However, it is yet to be seen how FTX performed in the second quarter of the year as the crypto winter affected the broader market. 

FTX is the brainchild of former Wall Street quant trader Sam Bankman-Fried. The 30-year-old CEO is one of the most popular figures in the cryptocurrency space and has become the industry’s lender of last resort as some companies struggle to cope with the ongoing bear market.

The report added that FTX had roughly $2.5 billion in cash at the end of 2021 and 27% profit margins. CNBC added that the profit margins were closer to 50% if advertising and related party expenses were left out of the calculations. 

The cryptocurrency exchange raised $400 million from investors like SoftBank’s Vision Fund 2 and Tiger Global in January, bringing its valuation to $32 billion.

FTX was launched at a time when Binance and Coinbase had solidified themselves as two of the largest cryptocurrency exchanges in the world. While Coinbase still operates largely within the United States, Binance has maintained its position as the largest crypto exchange in the world.

FTX also has a global presence, with the FTX.US platform focused on traders in the United States. 

The documents revealed that FTX spent roughly 15% of its revenue on advertising and marketing in 2021. FTX spent huge for its 2022 Super Bowl ad with actor Larry David and high-profile celebrity endorsements by Tom Brady and Giselle Bündchen.

The cryptocurrency exchange also bought the naming rights to Miami’s NBA arena, formerly the American Airlines Arena. The documents further revealed that FTX plans to spend an estimated $900 million in advertising in the coming years. 

While Binance intends to stay within the Web3 ecosystem, FTX is expanding into stock trading. Three weeks ago, FTX.US launched stock trading services to traders in all 50 states in the United States.  The cryptocurrency exchange added that it intends to add options trading, although no specific timeline was provided.

While FTX has increased its retail expansion efforts, the documents revealed that the cryptocurrency exchange remains a major venue for more sophisticated traders using derivatives – either futures or options. Roughly two-thirds of its revenue came from futures trading fees, while spot trading accounted for only 16%. 

FTX reviews within and outside the United States have been positive, and this could attract many stock traders to the cryptocurrency trading platform. Also, the low FTX fees also mean that the cryptocurrency exchange is growing far more quickly than any other reputable crypto trading platform.

Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.