Coinspeaker
Coinbase Announces Strong Q1 2024 Results, COIN Stock Jumps 9%
Coinbase Global Inc (NASDAQ: COIN) has stunned everyone on Wall Street by announcing better-than-expected Q1 2024 results on Thursday, May 2. The company reported a revenue of $1.64 billion against the estimated $1.34 and an earnings per share of $4.40 against the analysts’ estimate of $1.09.
The profits for the first quarter for Coinbase include $650 million mark-to-market gains on the cryptocurrency assets held by the exchange for investments. Moreover, the consumer transaction revenue stood at a staggering $935 million, jumping by 100% year-over-year basis. Also, the total transaction revenue nearly tripled during Q1 all the way to $1.08 billion.
For a while, transaction revenue has been one of the key boosters of Coinbase’s overall revenue. This was led by the subscriptions and services revenue clocking $511 million during Q1.
Soon after the news on Thursday, Coinbase (COIN) stock gained by 9% ending the trading session at $228 levels. The good thing was that the COIN stock gave closing above the 50-day moving average of $219, reducing the chances of short-term bearishness.
The COIN stock price is already up by 32% since the beginning of 2024. thanks to the strong Bitcoin price rally during Q1 2024 which boosted trading volumes and demand for other services at Coinbase. Also, with the US SEC approving the spot Bitcoin ETFs, there was a major influx of institutional investors in the market.
Q2 Can Be a Bit Challenging for Coinbase
Raymond James analysts noted that cumulative net inflows reached their peak on April 8 but have since declined, mirroring a decrease in bitcoin prices.
The analysts added: “The price of Bitcoin peaked as the pace of inflows moderated, and has been drifting modestly lower since mid-March. Indeed, trading volumes on Coinbase’s platform have come well down from early-March levels.”
During Q1 2024, several insiders at Coinbase, including four C-suite members, collectively divested $383 million worth of the company’s shares, as reported by analysts at Raymond James. This figure surpassed the amount sold in the fourth quarter of 2023 and marked the highest level of insider selling since the company’s listing on the Nasdaq Stock Market in 2021.
As we can see, the second quarter is already shaping up to be weaker than the first one, and demand from retail and individual investors, Coinbase’s cream customer base, is likely to drop further. These concerns are already evident among investors with the COIN stock seeing some selling pressure in the past few weeks of April.
Coinbase also touched down upon its ongoing SEC lawsuit, where the exchange faces accusations of operating as an unregistered broker.
“Clarity is the ultimate goal and the court’s decision continues us on that path. We remain confident in the strength of our legal arguments and are fully prepared for an intensive discovery phase throughout the remainder of the year,” the company wrote in a letter to investors.
Coinbase Announces Strong Q1 2024 Results, COIN Stock Jumps 9%
