Coinbase Reports Surging Profits and Revenue Amid Trump-Inspired Crypto Rally
Coinbase Global Inc. has reported a significant surge in revenue and profit for the fourth quarter of 2024, attributing the growth to a renewed interest in digital assets following the Trump-inspired crypto market rally.
Record-Breaking Financial Performance
The company’s revenue soared to $2.27 billion, far exceeding the $1.87 billion forecasted by analysts, according to data from Bloomberg. Net income also surged past expectations, hitting $1.29 billion, or $4.68 per share.
In its shareholder letter released on Thursday, Coinbase described the current moment as “the dawn of a new era for crypto” and emphasized its commitment to revenue growth and expanding the utility of digital assets.
Retail Investors Return to Coinbase
The fourth quarter saw the return of retail investors who had previously distanced themselves during the crypto market downturn. Consumer transaction revenue rose to $1.3 billion, marking a 179% sequential increase. Notably, nearly half of the trading customers were either new to the platform or re-engaging after a long hiatus.
The momentum carried into 2024, with Coinbase reporting $750 million in transaction revenue by February 11. For the first quarter of 2024, the company anticipates subscription and services revenue of $685 million to $765 million and has projected increased marketing and sales expenses.
SEC Lawsuit and Regulatory Momentum
Despite facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) under the Biden administrationfor allegedly selling unregistered securities, Coinbase remains optimistic.
Chief Financial Officer Alesia Haas noted, “Momentum has shifted in our favor.” In January 2024, a district court granted Coinbase’s request for an interlocutory appeal, pausing discovery in the case. Haas expressed confidence in the company’s position, suggesting a positive shift in regulatory dynamics.
USDC Revenue and ETF Impact
Coinbase also benefited from increased revenue generated by Circle’s USDC stablecoin, earning $172 million more than the year-ago quarter. Additionally, concerns about crypto ETFs cannibalizing demand have so far proven unfounded.
“We continue to see no signs of cannibalization from the ETFs,” Haas stated, describing ETFs as the “seas that raise all ships.”
Expenses and Market Performance
The company reported operating expenses of $1.2 billion, reflecting a 19% sequential increase. Despite higher costs, Joe Flynn, senior analyst at Compass Point Research & Trading LLC, remarked that the increased spending has translated into growth.
Coinbase, which became the first U.S. crypto company to go public via a direct listing in 2021, now boasts a market value exceeding $74 billion. Over the past two years, the company’s share price surged 600% as the crypto market rebounded from scandals and bankruptcies, including the collapse of FTX in 2022.