Coinbase, the popular crypto-trading platform, has reported strong quarterly profits and revenue, causing its shares to soar by 16%. The company announced that it earned $273 million in the fourth quarter, a significant improvement from the loss of $557 million in the same period the previous year. Additionally, sales rose to $954 million, surpassing Wall Street expectations of $826 million.
In a letter to shareholders, Coinbase executives attributed their success to the recent surge in crypto asset volatility and prices. They compared the current market conditions to early 2023, highlighting the impact of bitcoin spot ETF approvals and positive macroeconomic expectations. These factors contributed to increased “risk on” activity in the capital markets, benefiting Coinbase.
The company emphasized its strengthened position compared to a year ago and expressed confidence in its ability to capitalize on future opportunities. Coinbase also addressed the need for regulatory clarity in the U.S. markets regarding cryptocurrencies. To support this cause, they are backing the crypto-focused FairshakeSuper PAC and its affiliates, aiming to elect pro-crypto candidates in the upcoming 2024 election. Coinbase is a major supporter of Fairshake and recently opposed Democratic Rep. Katie Porter in the California Senate primary.
Looking ahead, Coinbase provided guidance for the first quarter, projecting subscription and services revenue between $410 million and $480 million. They also revealed generating approximately $320 million in transaction revenue through Tuesday. However, the company expects an increase in expenses for technology and development, as well as general and administrative costs, estimating them to reach $600 million to $650 million.
Despite a 3.3% increase in regular trading, Coinbase shares have experienced a decline of about 5% this year. Nevertheless, over the past 12 months, the stock has skyrocketed by 140%, significantly outperforming the S&P 500 index’s 21% growth during the same period.
Coinbase’s impressive financial performance reflects the growing popularity and acceptance of cryptocurrencies in mainstream markets. As the company continues to navigate regulatory challenges and support pro-crypto initiatives, investors remain optimistic about its future prospects.