In this illustrated photo, the Coinbase logo is displayed on a mobile phone screen.
Idris Abbas | SOPA Images | Light Rocket | Getty Images
Shares in cryptocurrency exchange Coinbase soared 12% in pre-market trading in the U.S. at 10:05 a.m. London time on Friday after the company announced its first profit in two years.
Coinbase, the largest cryptocurrency buying and selling site in the United States, announced fourth-quarter net income of $273 million.
This is the first time the company has posted positive net income since the fourth quarter of 2021.
Coinbase on Thursday announced fourth-quarter 2023 net revenue of $905 million, an increase of nearly 50% from $605 million in the same period last year.
Cryptocurrencies attracted significant investor interest in the fourth quarter of last year following news that the U.S. Securities and Exchange Commission approved the first spot Bitcoin exchange-traded fund (ETF). .
Bitcoin ETFs allow individual investors to access cryptocurrencies as stocks traded on regulated exchanges without direct exposure to the underlying assets.
This news has increased demand for cryptocurrencies, with hopes that it may increase interest from retail investors.
Coinbase said transaction revenue was the primary driver of revenue in the final quarter of 2023, adding that subscription and services revenue remained relatively flat.
Coinbase added that in the fourth quarter, it observed increased volatility in crypto prices similar to levels observed in the first quarter of 2023.
This was driven by the approval of Bitcoin ETFs and widespread expectations for improved macroeconomic conditions in 2024.
Consumer trading revenue for the quarter was $493 million, an increase of 79% sequentially.
On Thursday, Coinbase Chief Financial Officer Alecia Haas said in an interview with CNBC that the company is supporting a combination of fees for “simple” and “advanced” traders, which allows for high trading volume through the platform. There was no need to adjust fees to take this into account. .
“In the fourth quarter, and we've been sharing this for many quarters, a lot of the commission rate results are just a mix shift on the platform of who traded which products in the quarter,” she said. added.
“So in the fourth quarter when there was more volatility, simple trading grew, but advanced grew even more.”
