Coinbase, the largest U.S. marketplace for buying and selling cryptocurrencies, has reported a record-breaking quarter, showcasing significant financial growth. For the fourth quarter, the company announced a net income of $1.3 billion, or $4.68 per share, far exceeding analyst expectations of $1.81 per share. With a revenue of $2.3 billion, Coinbase has demonstrated its ability to capitalize on the burgeoning cryptocurrency market, surpassing predicted revenues of $1.88 billion.
The company's transaction revenue reached an impressive $1.56 billion, significantly higher than analyst estimates of $1.29 billion. Total trading volume saw a remarkable increase, climbing to $439 billion, up 185% year-over-year. This surge was driven by a 224% rise in consumer trading volume and a 176% increase in institutional trading volume. Coinbase's robust performance resulted in the company's stock rising by 2% in extended trading.
The quarter's success can be attributed to several factors. The launch of bitcoin ETF products in Q1'24 played a key role, contributing to stronger macroeconomic conditions. Additionally, the election of a pro-crypto President and Congress in Q4'24 brought much-needed regulatory clarity, spurring elevated spot crypto trading activity. This political shift led to a post-election rally that pushed cryptocurrency prices to new heights.
Coinbase's fourth-quarter results not only surpassed analyst expectations but also marked its biggest quarterly revenue in three years. The company attributed the majority of its year-over-year growth in trading volume to increased levels of crypto asset volatility and higher average crypto asset prices.
"The majority of the Y/Y growth in Trading Volume was driven by higher levels of Crypto Asset Volatility — particularly in Q1 and Q4 — as well as higher average crypto asset prices," – Coinbase