Bitcoin ETFs ‘spark’ Coinbase profits as COIN rallies by +10% Coinbase, the leading cryptocurrency exchange, has reported a
net income of $273 million in Q4 2023, surpassing expectations and showcasing its strong performance.
With a total revenue of $3.1 billion last year and a notable increase in
adjusted EBITDA nearing $1 billion, Coinbase's stock has soared to over $189 in after-hours trading.
CFO Alesia Haas attributes this success to
increased trading volume fueled by the introduction of
Bitcoin ETFs and optimism about the macroeconomic environment in 2024.
As the custodian of 90% of Bitcoin ETF crypto-assets, Coinbase has benefited from a massive
$4 billion net inflow, while its partnership with Circle and the Federal Reserve's rate hikes have boosted interest income on USDC.
In terms of regulatory compliance, Coinbase stands out as the most compliant exchange, gaining market share due to the demise of competitors like FTX and Binance's issues, according to ARK Invest CEO Cathie Wood.
While awaiting a decision on the SEC v Coinbase case, legal experts lean towards Coinbase's position, giving it a
70% chance of winning, similar to victories seen in cases involving Ripple and Grayscale.
The surge in profits has propelled COIN shares higher, with an over 14% increase in after-hours trading. Both Coinbase and Bitcoin have seen more than a 20% rise month-to-date.
Looking ahead, Coinbase plans to focus on its USDC stablecoin and explore blockchain utility through its layer-2 blockchain, Base. Regulatory efforts remain a priority for the exchange and the broader Web3 industry.
