In the fourth quarter of 2023, the cryptocurrency exchange Coinbase reported a net profit of $273 million. For the year, the figure amounted to $95 million with total revenue of $3.1 billion, the company announced in a letter to investors.
Our Q4’23 and full-year 2023 update is in.
Read the full shareholder letter and tune into our earnings call: https://t.co/fod43YZKqw pic.twitter.com/DJ2NhFyfdU
— Coinbase ?️ (@coinbase) February 15, 2024
The company’s financial success was explained by CFO Alesia Haas in an interview with CNBC, citing several key factors.
“Cryptocurrencies are a volatile space, and when we see increased volatility, our platform traditionally records high trading volumes. This was the situation at the end of the fourth quarter, driven by expectations of a bitcoin ETF and confidence in an improved macroeconomic environment in 2024,” she said.
Coinbase acted as the custodian for nearly all spot bitcoin exchange-traded funds that received approval from the SEC in January.
Amid the multibillion-dollar inflow of funds due to ETFs, JPMorgan upgraded the exchange’s rating from “underweight” to “neutral.” Bank experts were concerned that expectations for the growth of the leading cryptocurrency were tied to unwarranted optimism about the influx of “new money” into the market through exchange-traded instruments.
JPMorgan analyst Ken Worthington acknowledged that the launch of ETFs, which “seemed merely a promotional event,” became a significant catalyst for the price of digital gold.
$COIN: JPMorgan Upgrades to neutral from Underweight — PT $80
JPMorgan had been quite concerned that the enthusiasm in Bitcoin over the last three months was being driven by unrealistic optimism for new money going into the cryptocurrency market through the newly approved and…
— *Walter Bloomberg (@DeItaone) February 15, 2024
“We believe that such an increase in bitcoin’s value supports the strengthening of inflows into spot funds, which in turn leads to a rise in asset prices and other tokens,” he stated.
CryptoQuant CEO Ki Young Ju noted the rise in the Coinbase Premium index. This metric measures the difference between bitcoin quotes on the American exchange and Binance. On February 15, the indicator rose to 0.12, the highest level since May 2023.
Meanwhile, on Coinbase, institutional brokers seem to be fulfilling client purchase orders for #Bitcoin.https://t.co/CBvH58cfIG pic.twitter.com/Opl3rAoCuR
— Ki Young Ju (@ki_young_ju) February 15, 2024
“Meanwhile, on Coinbase, institutional brokers appear to be executing client orders for bitcoin purchases,” he commented.
After the market opened on February 16, Coinbase shares rose by 13.3%. The quotes approached $188, marking a new high for the year.
On April 14, 2021, the company went public on Nasdaq through a direct listing. On the first trading day, the stock price rose to $430, with a closing price of $328.
Coinbase stated that the launch of spot bitcoin ETFs in the U.S. has opened the doors for cryptocurrency to enter the mainstream.