According to Bloomberg, Coinbase, a cryptocurrency exchange, announced better-than-expected revenue and profit for the first quarter of 2024 due to the resurgence in cryptocurrency prices and renewed demand from individual investors.
In a shareholder letter on Thursday (2nd), Coinbase stated that its first-quarter revenue reached $1.58 billion, surpassing the average analyst expectation of $1.32 billion from Bloomberg’s survey. The net profit was $1.17 billion, compared to a loss of $79 million in the same period last year.
Driven by the demand generated by the launch of the US Bitcoin spot ETF in January, Coinbase experienced a surge in trading volume and mobile app downloads. Bitcoin reached a historical high of nearly $74,000 in March. After seven consecutive quarters of losses, Coinbase achieved profitability for the second consecutive quarter.
Coinbase’s trading revenue for the first quarter nearly doubled, surpassing $1.076 billion, primarily driven by retail users. Institutional clients accounted for the majority of the trading volume.
For the current quarter, Coinbase stated that it generated over $300 million in trading revenue in April but cautioned to exercise caution in interpreting these results. The company also expects subscription and service revenue for the second quarter to reach approximately $525 million to $600 million. Paul Gulberg, a senior industry analyst at Bloomberg Intelligence, stated, “The guidance is good, but it largely depends on the price of cryptocurrencies, which saw a decline in April.”
Coinbase (COIN) closed at $228.85 on Thursday, with a drop of about 2% in after-hours trading. The company’s stock price has risen nearly 30% this year, while Bitcoin has increased by approximately 40%.
Lawsuits with regulatory agencies:
Coinbase also addressed its ongoing legal issues with the US Securities and Exchange Commission (SEC) and its political contribution matters in the shareholder letter. The company mentioned that the Manhattan federal court rejected the SEC’s accusation that Coinbase acted as an unregistered broker through its wallet in March this year but also noted that the court denied the company’s request to dismiss the case completely.
Coinbase stated:
Coinbase also emphasized its political contributions, stating that it is a major donor to the Fairshake PAC, a leading US super political action committee. The company mentioned that the PAC supports pro-cryptocurrency candidates from both parties and highlighted the impact of the pro-cryptocurrency movement. It noted that in the primaries in March, “Cryptocurrency voters made their presence felt in key states such as California, Texas, and Alabama by electing or helping pro-cryptocurrency candidates advance, demonstrating their influence.”
