The United State’s biggest cryptocurrency exchange by trading volume, Coinbase is on a roll after recording some hard quarters. However, the ongoing crypto market rally has proven to be good for the exchange as Coinbase reported a net income of $273 million in the fourth quarter of 2023.
Coinbase hits profit
According to the data, it is the first time the company has reported positive net income since the fourth quarter of 2021. This positive report helped the Coinbase Global Inc (NASDAQ: COIN) share price to surge by over 14% in the premarket trading.
Coinbase shares closed trading in the last session at $165.67 which is a jump of around 110% recorded in the last 6 months.
However, the positive financial results were driven by interest spikes in crypto. This became very evident following the approval of spot bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC).
Net revenue for Coinbase in Q4 2023 turned out to be $905 million. It is a nearly 50% increase from $605 million in the same period of the previous year. The approval of spot bitcoin ETFs by the SEC played a crucial role here. Bitcoin ETFs have enabled retail investors to access bitcoin through a regulated exchange.
What’s more in the report?
The report shows that the Consumer trading revenue of Coinbase for the quarter was $493 million. This represents a 79% quarter-over-quarter increase. Coinbase CFO Alesia Haas mentioned that the company did not need to adjust fees despite higher volumes. It was done as the fee rate was influenced by the mix shift between “Simple” and “Advanced” traders.
It is important to note that JPMorgan recently upgraded Coinbase’s shares to neutral. The investment giant cited the recent surge in crypto prices following the approval of spot bitcoin ETFs. The higher crypto prices are expected to positively impact Coinbase’s activity levels and earnings in the first quarter.
While acknowledging the recent positive developments, JPMorgan cautioned that Coinbase’s shares could underperform in 2024 based on valuation analysis. The stock had seen a near-400% increase in its share price in the previous year.
Bitcoin, the biggest crypto, price is flying over the expectation of shorters. BTC bulls are now aiming to claim the $53,000 price level after breaching the $1 trillion market cap.
Bitcoin is trading at an average price of $52,307, at the press time. Its 24 hour trading volume is down by 4% to stand at $35 billion.