Market Analysis Report (22 Aug 2022)

Leaked financials show that FTX experienced rapid growth last year, with the exchange recording over a billion dollars in revenue and quickly expanding across the globe.

In 2021, the crypto exchange saw its revenue rocket from $89m to $1.02bn - an increase of more than 1,000%. This came during a euphoric period for the cryptocurrency market, which was experiencing new all-time highs at the time. The exchange’s operating income also rose in line with its revenue, increasing from $14m in 2020 to $272m in 2021. Overall, the documents reportedly show that FTX had a net income of $388 million last year, up from just $17 million a year earlier.

Looking back at the first quarter of 2022, FTX brought in $270m in revenue, and was on track to do roughly $1.1 billion in revenue in 2022, according to an investor deck shared with CNBC. The documents show that approximately two-thirds of revenue came from fees associated with trading futures, while around 16% came from spot markets. Futures and derivatives trades tend to be more lucrative for exchanges.

FTX, unlike many of its competitors, was founded just three years ago by former Wall Street trader Sam Bankman-Fried, also known as SBF. Since its inception, the exchange has risen to become one of the most popular cryptocurrency trading venues. The company's CEO is also popular within the cryptocurrency space and has recently stepped in to backstop struggling crypto companies as liquidity dried up amid the recent market turmoil.