The election of a new commander-in-chief benefited Coinbase’s bottom line last quarter, with the exchange reporting a stronger-than-expected profit on Wednesday as transaction revenue surged 270% alongside last year’s presidential election.
Revenue derived from transaction fees, which typically accounts for a majority of Coinbase sales, reached $1.56 billion in Q4, up from $572.5 million the previous quarter, when the exchange’s customers had apparently grown less engaged over the summer.
Amid the recent trading boom, Coinbase’s total revenue rose to $2.3 billion, up from $954 million a year ago and surpassing Wall Street expectations of $1.84 billion, according to FactSet data.
Posting an earnings per share mark of $4.68, Coinbase disclosed $1.3 billion in Q4 profit, more than doubling analysts’ $2.11 estimate.
President Donald Trump’s reelection in November sent the price of Bitcoin and other cryptocurrencies soaring. But Coinbase stock also emerged as a major winner, rallying to a three-year high of $349.75 per share in December.
In after-hours trading, Coinbase shares rose 2% to around $304. The San Francisco-based exchange’s stock price has risen 112% over the past year.
“You’ve got a pro-crypto federal government that’s moving quickly to deliver pro-crypto legislation,” Coinbase Vice President of Investor Relations Anil Gupta told Decrypt. “There’s going to be so many opportunities that get unlocked with this new regime.”
Coinbase CEO Brian Armstrong posited on an earnings call that lawmakers’ push to pass crypto-related bills could have a global impact, saying that “the rest of the world is taking notice and will be under pressure to embrace crypto adoption.”
Trump’s promise to end an “un-American” crackdown on the crypto industry could have significant consequences for Coinbase, which was sued by the SEC in 2023 for allegedly operating as an unregistered securities exchange.
The case is still ongoing but was frozen by a federal New York judge last month due to conflicting rulings in other crypto-related cases.
Trump tapped Paul Atkins, a former SEC commissioner, to lead the agency. Pending Atkins’ confirmation, acting SEC Chair Mark Uyeda has unveiled a task force for crafting clearer rules, selecting SEC Commissioner Hester Peirce, a crypto advocate, to lead the initiative.
In a shareholder letter, Coinbase said that a new regulatory environment would likely bolster its business model, describing the shift as “the dawn of a new era for crypto.”
While Coinbase reported a 141% increase in total revenue year-over-year, $2.3 billion fell just shy of a record-breaking performance for the exchange. During the height of the pandemic-era bull market in the fourth quarter of 2021, Coinbase boasted $2.5 billion in sales.
As markets cooled in 2023, Coinbase embraced subscriptions and services revenue as a way to diversify its business. That figure includes income from reserves backing Circle’s USDC stablecoin. Coinbase took an equity stake in Circle in August 2023.
Coinbase disclosed on Thursday that stablecoin revenue came in at $226 million, falling slightly from Q3’s $246 million, though it’s still up from $172 million a year ago.
Armstrong said on Thursday’s earnings call that the company has a “stretch goal” of making USDC the “number one stablecoin.”
At a market cap of $56 billion, USDC’s prominence is only second to Tether’s $142 billion footprint.
“We’ll be accelerating the market cap growth of USDC with more partnerships and leaning into new use cases, like adding payments support across our product suite,” Armstrong said.
Coinbase’s subscription and services segment, which also includes the exchange’s staking and custody products, rose 14% quarter-over-quarter to a record $641 million.
With last year’s approval of spot Bitcoin and Ethereum ETFs, U.S. investors gained more options for investing in major cryptocurrencies. Coinbase serves as a custodian for many such products, but it effectively placed the firm in competition with brokerages.
“We’re not in a world where it’s a zero-sum game,” Gupta said. “We’re growing the number of people who are getting into crypto. And I think that’s going to be net positive.”
In the first quarter of last year, alongside the approval of spot Bitcoin ETFs, Coinbase reported $312 billion in trading volume. In the previous quarter, trading volumes clocked in at $439 billion, rising 185% from $154 billion a year prior.
Edited by Andrew Hayward
Editor’s note: This story was updated after publication to add comments from Coinbase.
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