Daisy Watts 
Feb 16, 2024
In what seems to be a showdown of resurgence of heavy investments in crypto, Coinbase Global on Thursday reported its first quarterly profit since 2021, indicating a spike of 13% in its shares shortly after the bell.
The approval of the first spot bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission's (SEC) has thrusted investor's inclination towards crypto over the last couple of months.
Following the approval of the ETFs, the optimism engulfed on the industry jacked Bitcoin's price 57% in the last quarter of 2023, elevating the total transaction revenue of crypto exchange Coinbase 64% to $529.3 million over the same period.
Read more: Bitcoin market value soars beyond $1 trillion amid buyers' rush
"Results this quarter were exceptional as they far exceeded both our expectations and Street consensus," said Michael Elliott, equity research analyst with CFRA Research.
This exceptional account of profits makes Coinbase expect a considerably beneficial first quarter, backed by its subscription and services that include businesses other than trading, as the crypto exchange platform predicts revenue to be between $410 million and $480 million, more than LSEG's estimate of $356.22 million.
The company recorded a jump of 33% to $375.4 million in the fourth quarter of 2023, with the biggest push obtained from stablecoin revenue, the interest it receives from its partnership with fintech firm Circle.
Circle issues the USD Coin stablecoin that it jointly controls and regulates in collaboration with Coinbase, as interest earned on the reserves supporting USDC brings significant revenue to Coinbase, allowing it to generate higher profits due to the Federal Reserve's interest rate increases.
In the last quarter ending on December 31, the company posted a profit of $273.4 million, or $1.04 per share, compared to a loss of $557 million, or $2.46 per share, in the same period a year ago. Analysts had anticipated a loss of 1 cent per share, based on LSEG data.
