Shares in cryptocurrency exchange Coinbase have surged by 37% in the past week, riding the wave of Bitcoin’s recent rally. With the firm set to unveil its fourth-quarter results this Thursday, analysts are anticipating a strong performance, fueled by bullish trading volumes and increased revenue streams.
Market analysts, drawing data from MarketWatch and FactSet, foresee a substantial revenue surge for Coinbase in the fourth quarter, projecting an impressive 22% increase from the third quarter to a staggering $825 million. This surge is largely attributed to robust trading volumes, with estimates suggesting a near doubling from $76 billion in Q3 to $142.7 billion in Q4.
Moreover, Coinbase is expected to report a fourth-quarter earnings-per-share of $0.02, marking a notable improvement from the reported loss of $0.01 per share in the previous quarter. The positive forecast comes amid a significant uptick in Bitcoin’s price, which has surged by 16.3% in the past seven days, according to data from Coinmarketcap.
Coinbase’s strong performance mirrors that of its competitor, Robinhood, which recently posted a 24% year-on-year increase in fourth-quarter revenue. Robinhood attributed this growth to a surge in crypto trading revenue, which reached $43 million, marking a 10% year-on-year increase.
However, while Coinbase and its counterparts bask in the glow of recent successes, not all analysts are convinced of sustained growth in 2024. In a note to investors dated January 22nd, JPMorgan analysts expressed skepticism regarding Coinbase’s performance in the coming year. They attributed their concerns to what they deemed as an “underwhelming” start to spot Bitcoin ETFs trading.
The launch of spot Bitcoin ETFs experienced initial turbulence, exacerbated by the nearly $6 billion outflow from Grayscale’s newly converted GBTC fund between January 11th and February 2nd. However, recent developments suggest a reversal in fortune. On February 13th, BlackRock’s IBIT witnessed a substantial $493 million in inflows, while all 10 ETFs collectively experienced a total of $631 million in net inflows on the same day.
Despite initial setbacks, the resurgence in ETF inflows signals renewed investor interest in Bitcoin and related assets. This shift could potentially bolster Coinbase’s performance in the coming quarters, as the platform stands at the forefront of facilitating crypto transactions and investments.
As Coinbase prepares to unveil its fourth-quarter results, anticipation runs high among investors and analysts alike. The outcome of Thursday’s report will not only shed light on Coinbase’s financial health but also offer valuable insights into the broader trajectory of the cryptocurrency market amidst evolving regulatory landscapes and shifting investor sentiments.
In the ever-fluctuating realm of cryptocurrencies, Coinbase’s resilience and adaptability stand as testaments to the industry’s dynamism and potential for growth. As Bitcoin and its counterparts continue to redefine financial landscapes, Coinbase remains a pivotal player, navigating the tides of innovation and uncertainty with steadfast determination.
