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Coinbase benefits after US election, quarterly revenue up 88%
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In the fourth quarter of 2024, the Coinbase exchange had revenues of $2.3 billion, far exceeding analysts' forecasts. Trading volumes also soared after Donald Trump was elected US president.
Coinbase's Q4 Revenue Rises Sharply
According to the February 13 financial report, Coinbase's total revenue for the fourth quarter of 2024 reached $2.3 billion, up 88% from the previous quarter, while net profit reached $1.3 billion. Both far exceeded analysts' expectations.
In the fourth quarter, total trading volume reached $439 billion, significantly higher than the forecast of $404 billion.
Meanwhile, revenue from personal trading rose more than 178 percent from the previous quarter, to $1.35 billion. Revenue from institutional clients also increased 155% in the same period, reaching $141.3 million. The remarkable growth took place against the backdrop of Donald Trump's election as US President and the crypto market skyrocketed.
“Much of the revenue growth was driven by strong volatility in crypto assets, particularly in Q1 and Q4.” Letter to Coinbase shareholders.
In addition, the company also recorded $225.9 million in revenue from stablecoins and $214.9 million from blockchain rewards, up 38.8% from the previous quarter.
On February 13, according to data from Google Finance, Coinbase shares rose 8.44%, reaching $298.1. But then it fluctuated slightly in the overtime session and fell to $295.
Earlier, Robinhood shares also soared when the company released its fourth-quarter report. The company's crypto revenue growth is up to 700% over the same period in 2023.
In addition, in 2024, Coinbase recorded significant growth from subscriptions and services. However, the trading segment remains core, accounting for more than 50% of total revenue.
In Q4, the supply of USDC stablecoins on Coinbase increased by about 23%. But Coinbase's Ethereum staking platform is struggling. The number of people staking ETH declined, with net withdrawals approaching 1.3 million ETH.
In the long run, the more favorable legal environment under Trump could positively support Coinbase's Ethereum staking array, according to the researchers.
We see Coinbase as one of the parties that benefited from the election results. Because this company has been under great pressure from the SEC over the past few years.
In addition, Coinbase is also pushing ahead with plans to expand internationally. The US-based cryptocurrency exchange is in talks with Indian regulators to consider returning to the market, after halting operations there in 2023.
Trading volume surges after election
According to Coin Metrics, Coinbase's revenue could increase by more than 100% over the same period in 2023, thanks to a sharp increase in trading volume in the fourth quarter of 2024.
After the election of the US President, the optimistic sentiment of investors helped the volume of trading on crypto exchanges skyrocket. Because Trump has pledged to make the United States the “crypto capital of the world” and has nominated many officials with pro-industry views to lead key agencies.
According to Kaiko, the transaction cash flows mostly come from institutions because Coinbase is also having trouble attracting individual investors.