Posted:
- Coinbase Global Inc. reported profits for the first time in two years
- COIN shares rose as revenue rose 51%
Coinbase delivered a standout performance in the fourth quarter of 2023, reporting net income of $273 million. Last year the total turnover was $3.1 billion, while net profit contributed $95 million.
The company has exceeded expectations with a adjusted EBITDA nearly $1 billionsaid the shareholder letter dated February 15, 2024. This financial rebound has also led to Coinbase shares rising above $189 in after-hours trading.
Coinbase’s Strategic Victories
Coinbase’s remarkable success can be attributed to several key factors, as outlined by CFO Alesia Haas. During a interview with CNBC TV, she explained:
“Crypto is a volatile space, and when we see an increase in volatility, it has attracted more trading volume to our platform for a long time, and that’s exactly what we saw at the end of the fourth quarter, fueled by the Bitcoin ETFs, fueled by the belief that the macroeconomic environment would improve in 2024.”
Coinbase, which is the custodian of 90% of the total Bitcoin Exchange Traded Fund (ETF) crypto assets, have benefited significantly from the massive increase A net inflow of $4 billion. The exchange’s revenues continued to rise due to higher interest income on USDC, thanks to the partnership with Circle and the Federal Reserve’s interest rate hikes.
Regulatory landscape
Cathie Wood, CEO and CIO of ARK Invest, echoed Haas’ views and also noted Coinbase’s excellent execution in the volatile market. Speak Speaking to Yahoo Finance, Wood highlighted the company’s regulatory compliance,
“From a regulatory perspective, it is the most compliant exchange out there, losing all its competition with the demise of FTX last year, and even Binance’s problems have had a positive impact on Coinbase from a market share perspective.”
Meanwhile, the SEC v. Coinbase case is still pending. Both parties are currently awaiting a decision on Coinbase’s Motion to Dismiss (MTD). Particularly lEgal experts lean towards Coinbase’s position. For example, Elliot Z. Stein, Senior Litigation Analyst at Bloomberg Intelligence, believes Coinbase has a 70% chance of winning.
Wood is also optimistic about Coinbase’s chances, pointing to wins in the likes of Ripple and Grayscale.
COIN peak and future prospects
The gains have pushed the stock’s shares higher. COIN recorded an increase of more than 14% in after-hours trading on February 15. At market close, the stock was trading at $165.67, up $5.29 or 3.30%. Additionally, both Coinbase and Bitcoin are up more than 20% month-over-month.
Interestingly, ARK sold 214,068 COINs on February 14. However, Wood stressed that it was just an example of trimming positions to realize profits with no further consequences.
The world’s second largest cryptocurrency exchange plans to significantly focus on USDC stable currency this year. The goal is to use its layer 2 blockchain, Base, to explore and improve the utility of blockchain. Additionally, the exchange is committed to continuing its regulatory efforts for both itself and the broader Web3 industry.