Coinbase cites stablecoins and Base as key priorities for 2024 after crushing Q4 estimates


After revealing better than expected results financial results in its fourth quarter earnings report, US company Coinbase has big plans.

The second-largest cryptocurrency exchange has told its investors that it intends to lean heavily on its work with popular stablecoin USDC this year, leveraging its recently launched layer 2 blockchain foundation as a way to experiment and improve the utility of blockchain, and has promised to maintain its regulatory work on behalf of itself and the Web3 industry as a whole. And this, while a bull market and inflows of institutional capital return to the forefront.

Coinbase is strong fourth quarter results comes after a return to form by the crypto industry itself, which spent much of 2023 mired in a downturn. Late last year saw increased trading activity, and the start of 2024 brought a crucial regulatory victory over spot Bitcoin ETFs that could give Coinbase and its peers a strong start to the year.

Overall, the total crypto market cap increased 14% over a seven-day period to $1.96 trillion, the highest level since April 2022 before the Terra LUNA collapse. With the recent growth of the crypto market, many market participants also expected that Coinbase’s trading revenue would also increase – and it has happened.

In the fourth quarter, Coinbase generated $529.3 million in “transaction” or trading revenue, including $492.5 million from retail activity and $36.7 million from institutional traders. The total figure was up 83.4% from $288.6 million in the third quarter.

Even though things are looking bright, the exchange’s total trading revenue is still down 44% year over year as the market climbs back to bull market levels.

Financial results

In the fourth quarter of 2023, Coinbase generated revenue of $953.8 million, far surpassing the $629.1 million generated in the fourth quarter of 2022. It also far exceeded the $674.1 million of revenue recorded in the third quarter of last year. The company’s reported numbers beat expectations, which included revenue just north of $820 million.

Earnings came in at $1.04 per share on net income of $275.7 million, well above expectations of $0.02 per share.


Coinbase could surpass its strong fourth-quarter results in the first quarter of 2024, a period that included regulatory victories including the approval and launch of a slew of bitcoin spot ETFs that rely on the company to hold its digital assets. (As they accumulate more assets under management, Coinbase’s custody business is expected to grow linearly with these inflows.)

But Coinbase is also the custodian for 8 of the 11 spot Bitcoin ETF issuers, meaning it finds liquidity from that route as well. And the more the Bitcoin ETF spot market grows, the more likely Coinbase is to win. (The company is bullish on the issue, calling the SEC’s approval of spot bitcoin ETFs a “watershed moment for the expansion of the cryptoeconomy.”)

Through Feb. 13, its earnings document says the company recorded “approximately $320 million” in transaction revenue, putting it on pace of about $640 million to $650 million for the quarter. With subscription and services revenue estimated “in the range of $410 million to $480 million” for the current quarter, Coinbase could surpass $1 billion in quarterly revenue for the first time in many quarters.

With increased demand for its custody product, trading fees rising, and crypto prices regaining much of their former strength, Coinbase is on much stronger footing than it was a year ago. At the same time, potential headwinds loom on the horizon for the company. Coinbase, like many fintech playershas benefited greatly from rising interest rates, which boosted the value of reserves held by USDC and the revenue generated from its own cash reserves. Interest rates in Coinbase’s domestic market are expected to moderate this year, which could limit the company’s interest-based revenue growth. It is also possible that some consumers will turn to ETF products instead of purchasing bitcoin directly through Coinbase, which could lead to some inequality in its trading income.

Nonetheless, Coinbase has set a goal of generating positive adjusted EBITDA, even during a prolonged market downturn. It did just that and is now heading into a growth area as a smaller company. It’s not a bad place to start the year, and it provides some comfort to an industry that has just been mired in a prolonged winter.


Leave a Comment

Your email address will not be published. Required fields are marked *