Coinbase, headquartered in California, has revealed a profit of $273.4 million, or £1.04 per share, in the final quarter of 2023, surpassing the anticipated loss of 1 cent per share, as per LSEG data. This marks the first quarterly profit for the cryptocurrency exchange since 2021.
In comparison, the exchange suffered a loss of $2 million in the preceding quarter of 2023 and a substantial loss of $557 million in the last quarter of 2022, indicating a significant turnaround.
The market swiftly responded to the impressive figures, with the value of the exchange’s publicly listed shares soaring by 14.2 percent in after-hours trading.
Nonetheless, Coinbase shares are still trading at a considerable discount from their listing price in April 2021.
The profit for the period from October to December was achieved on revenue of $953.8 million, surpassing analysts’ expectations of $826.1 million—a 41 percent increase quarter-over-quarter.
Additionally, transaction volume surged by 84 percent quarter-over-quarter to $529 million, primarily fuelled by cryptocurrency volatility and demand.
Revenue from subscription services also increased to $375.4 million, up from the previous quarter’s $826.1 million.
The quarterly surge in demand coincided with market expectations for the approval of Bitcoin exchange-traded funds (ETFs) in the United States, which were finally approved by the securities market regulator in January.
Looking ahead, Coinbase anticipates improved results in the ongoing first quarter of 2024.
Transaction revenue has already reached approximately $320 million by February 13.
The exchange expects its subscription and services unit to generate between $410 million and $480 million.
Meanwhile, Coinbase continues to navigate a legal battle with the Securities and Exchange Commission.
It is concurrently bolstering its presence in overseas markets, particularly in Europe, acquiring multiple new licenses.
“Coinbase has always taken a long-term approach, focusing on building in a compliant manner, even when it wasn’t the popular choice.
Many of our competitors cut corners and broke laws to get big fast, and we’ve seen how that strategy played out,” remarked Coinbase’s CEO, Brian Armstrong, during the earnings call.