Shares of cryptocurrency exchange Coinbase surged 12% Friday at 10:05 London time in U.S. premarket trading after the company reported its first profit in two years.
Coinbase, the largest U.S. venue for buying and selling cryptocurrencies, stated that its net income amounted to $273 million in the fourth quarter.
This marks the initial instance wherein the company has disclosed positive net income since the fourth quarter of 2021.
Coinbase announced Thursday that its net revenue stood at $905 million in the fourth quarter of 2023, marking an increase of nearly 50% from $605 million in the corresponding period of the preceding year.
Coinbase declared on Thursday that its net revenue reached $905 million in the fourth quarter of 2023, marking a surge of nearly 50% from $605 million in the corresponding period of the previous year.
Cryptocurrencies witnessed significant investor interest in the fourth quarter of last year, driven by the news of the U.S. Securities and Exchange Commission approving the first spot bitcoin exchange-traded funds (ETFs) — for bitcoin.
Bitcoin ETFs offer retail investors a means to engage with the cryptocurrency as a share traded on a regulated exchange, without direct exposure to the underlying asset.
The news has sparked increased demand for cryptocurrencies, fueled by expectations that it could attract heightened interest from retail investors.
According to Coinbase, transaction revenues were the main contributor to revenues for the final quarter of 2023, with subscription and services revenue remaining relatively unchanged.
Additionally, Coinbase noted that during the fourth quarter, the company experienced heightened volatility in crypto prices reminiscent of levels seen during the first quarter of 2023.
This surge was attributed to the approval of the Bitcoin ETF and widespread anticipation of improving macroeconomic conditions in 2024.
Consumer trading revenue amounted to $493 million for the quarter, marking a 79% increase quarter-over-quarter.
In an interview with CNBC on Thursday, Coinbase Chief Financial Officer Alesia Haas stated that the company did not need to modify fees to accommodate the increased volumes flowing through the platform.
This was supported by its blend of fees for both “Simple” and “Advanced” traders.
She remarked, “In Q4, and we’ve shared this for many quarters, a lot of the results of our fee rate is just the mix shift on our platform — who traded what product in the quarter.” She continued, “So in Q4, when we saw higher volatility, we grew Simple trading, but Advanced grew more.”
