FTX, the cryptocurrency trading platform, generated more than $1 billion in 2021. CNBC cited leaked financials showing that FTX made $1.02 billion in 2021. That’s a whopping 1000% increase from its 2020 earnings! The report claims that the company earned only $89 million in 2020. In spite of the challenging circumstances in the crypto market, the company has been growing rapidly and increasing its global reach through a series of acquisitions.
How FTX grew, crypto winter and growth aspirations
Privately held and established in 2019, the company’s operating income increased to $272 million in 2021, from $14 million in 2020. Additionally, in 2021, its net income increased to $388 million, up significantly from $17 million the previous year. It is unknown, however, how FTX fared in the second quarter given crypto prices plummeted in the recent crypto winter.
Nonetheless, the crypto winter seems to have done little to deter its growth plans. For instance, FTX entered into an option agreement to acquire the lending platform BlockFi in July and held acquisition talks with the South Korean exchange Bithumb.
FTX’s last funding round occurred in January, when the company received $400 million from investors including SoftBank’s Vision Fund 2 and Tiger Global at a valuation of $32 billion. Also, a total of over $2.5 billion in cash was on hand at the end of last year, and the report claims that the company’s profit margins were at about 27%. If one takes out the costs of advertising and “related party,” the margins are closer to 50%.
The first quarter of 2022 brought about $270 million in revenue for FTX. In addition, an investor presentation seen by CNBC indicated that the company was on track to earn $1.1 billion this year. During the so-called crypto winter, the Bankman- Fried led company has emerged as a savior of some sorts, expressing interest in acquiring a number of distressed crypto firms. In addition, FTX has been secretly expanding its own network of international subsidiaries.