Coinspeaker
Coinbase (COIN) Stock Rises Following Impressive Q4 2023 Earnings Figures that Beat Wall Street Expectations
Coinbase Global Inc (NASDAQ: COIN) shares have surged after the company posted Q4 2023 earnings that beat analysts’ expectations. According to MarketWatch data, Coinbase stock is currently at $186.95 in after-hours, after rising 12.85% from its $165.67 close.
Coinbase Stock Up as Company Outperforms Projections in Q4 2023
In a company statement, Coinbase said it generated net income of $95 million and almost $1 billion in positive Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in 2023. Coibase’s earnings for the quarter came to $1.04 per share, much higher than the average analyst estimate of $0.02 per share. The company’s revenue of $953.8 million also beat the $826.1 million projected by analysts.
Coinbase stock has climbed nearly 25% in the last four days and more than 33% in a month. However, the major American crypto exchange shares have plunged nearly 5% since January.
Coinbase’s statement also highlighted a few other developments for last year. These include launching Coinbase International Exchange, supporting access to derivative products via Coinbase Financial Markets, and launching Base, a secure layer-2 (L2) solution for decentralized applications (DApps). In addition, Coinbase acquired key licenses, successfully completed registration, or launched operations in 6 new markets. In an interview with CoinDesk. Coinbase Vice President of Investor Relations, Anil Gupta, said:
“We’re really pleased with the results. Operational rigor that we set forth early in the year really paid off over the course of 2023.”
Towards the end of last year, crypto prices began to pick up, ending a prolonged bear market. The rally started because of the anticipation of spot Bitcoin exchange-traded funds (ETFs) and the upcoming halving. The rise in prices was beneficial to Coinbase, which recorded a 100% increase in trading volume between the third and fourth quarters of 2023. Q4’s trading beat the estimated $142.7 billion by 8%, rising to $154 billion.
Coinbase Benefits from Spot Bitcoin ETFs
Last month, Coinspeaker reported that Coinbase is likely the biggest winner of the SEC’s approval of spot BTC ETFs. Of the 11 applications awaiting approval at the time, Coinbase was the custodian for 8. In addition to performing custody and financing functions, Coinbase also benefits from the ETFs’ in-kind redemptions as it would have to support mismatches between the ETF and the spot market.
The ETFs are pulling in healthy numbers, with several billion dollars in inflow since approval over a month ago. Gupta describes them as a “win-win for Coinbase” because ETFs are attracting a lot of activity and engagement even though custody is a “relatively small part of the business”.
Bitcoin crossed $52,000 earlier, drawing activity from the ETFs. Bloomberg Senior ETF Analyst Eric Balchunas pointed out in an X post that by Wednesday, Blackrock $IBIT ETF had hit an average of $760 million per day, surpassing its weekly volume record. On that day, the net inflow from trading ETFs crossed $340 million.
