[NEW] Coinbase turns profitable in fourth quarter; shares surge in after-hours trading

Coinbase, a US cryptocurrency exchange, announced its financial results for the fourth quarter of 2023 (October-December) on the 15th. Fourth-quarter sales were $953.8 million (approximately 143.1 billion yen), exceeding market expectations of $826.1 million (approximately 124 billion yen).

Net income was $273 million (approximately 41 billion yen), turning to the black for the first time since the fourth quarter of 2021. Coinbase's stock price rose by more than 14% in after-hours trading in response to this.

The main factor behind the turnaround to profitability is the significant improvement in revenue from cryptocurrency trading. The cryptocurrency market has improved since mid-2023, and trading volume has increased accordingly.

Trading volume in the fourth quarter was $154 billion (approximately 23.1135 trillion yen), nearly double the third quarter. The market forecast was $142.7 billion (approximately 21.4175 trillion yen).

Trading revenue, including both individual and corporate transactions, totaled $529.2 million (approximately 79.5 billion yen). This is an 83% increase from the third quarter.

Coinbase also recorded $171.6 million (approximately 25.7 billion yen) in profits from USD Coin (USDC), a US dollar stablecoin with which the company has a close relationship, and explained that it also earned service revenues from its proprietary blockchain Base (Base) that exceeded those of the third quarter. In 2024, the company will pursue profits from USD Coin in addition to revenues from cryptocurrency trading, and will focus on promoting the use of Base.

Coinbase also stated that it is currently expanding its business to countries other than the United States, and that approximately 80% of the company's cryptocurrency transactions are conducted overseas. It also explained that it will continue to make efforts to clarify cryptocurrency regulations in the United States.

Positive outlook strengthens due to increased trading volume, etc.

There is a strong view that Coinbase will continue to grow its revenue in the future.

Prices are rising, especially for major stocks such as Bitcoin (BTC) and Ethereum (ETH), and trading volume is expected to continue to increase accordingly.

In addition, of the 11 Bitcoin spot ETFs approved last month, 8 of them have Coinbase as their custodian.

The amount of capital flowing into Bitcoin spot ETFs is increasing daily and there is a certain demand, so Coinbase's business foundation may become even more solid due to storage fees.

Reference: Financial results
Image: Shutterstock

Related articles

Bitcoin reaches new record high in Japanese yen since November 2021

Coinbase's SEC dispute may be "70% successful" - Bloomberg analyst analyzes