Coinbase Reports Profit in Q4
Coinbase Global, the crypto exchange, announced that it swung to a profit in the fourth quarter. This was driven by strong growth in transaction volumes and higher interest income earned on its stablecoin reserves. As a result, the company’s shares rose by 8% in extended trading.
Optimism Surrounding Spot Bitcoin-ETFs
The recent rebound in crypto prices, fueled by optimism surrounding the approval of spot bitcoin-exchange traded funds (ETFs) by the U.S. Securities and Exchange Commission, has reignited investor enthusiasm for cryptocurrencies.
Significant Increase in Transaction Revenue
Total transaction revenue for Coinbase surged by 64% to $529.3 million. This growth was attributed to both consumer and institutional investors participating in cryptocurrency transactions.
Partnership with Circle and Stablecoin Revenue
Coinbase also benefited from its partnership with Circle, which issues the USD Coin (USDC) stablecoin. The company earns interest on reserves from USDC, which it governs jointly with Circle. Stablecoin revenue increased by nearly 18% to $171.6 million.
Higher Interest Income and Overall Profit
The interest income that Coinbase earns on loans and funds held in custody for clients jumped by 17% to $42.6 million. Overall, Coinbase reported a profit of $273.4 million, or $1.04 per share, in the fourth quarter compared to a loss of $557 million, or $2.46 per share, in the same period last year.
Hot Take: Coinbase Surpasses Expectations with Strong Q4 Performance
Coinbase’s strong performance in the fourth quarter, driven by increased transaction revenue and higher interest income, showcases the growing demand for cryptocurrencies. The partnership with Circle and the success of stablecoin revenue further solidify Coinbase’s position as a leading crypto exchange. With the recent surge in crypto prices and renewed investor enthusiasm, Coinbase is well-positioned to continue its growth trajectory in the coming quarters.
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