According to Bloomberg, Coinbase, the cryptocurrency exchange, has reported better-than-expected revenue and profit for the first quarter of 2024, driven by the resurgence in cryptocurrency prices and renewed demand from individual investors.
In a shareholder letter on Thursday (May 2), Coinbase stated that its first-quarter revenue reached $1.58 billion, surpassing the average analyst expectation of $1.32 billion. The net profit was $1.17 billion, compared to a loss of $79 million in the same period last year.
The demand for Coinbase’s trading volume and mobile app downloads surged due to the launch of the US Bitcoin spot ETF in January this year. 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 transaction revenue almost doubled in the first quarter, exceeding $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 transaction revenue in April but cautioned that “caution is required when inferring these results.” The company also expects subscription and service revenue for the second quarter to be around $525 million to $600 million. Paul Gulberg, a senior industry analyst at Bloomberg Intelligence, stated, “The performance guidance is good, but it largely depends on cryptocurrency prices, which declined in April.”
Coinbase (COIN) closed at $228.85 on Thursday, with the stock price falling by about 2% in after-hours trading. The company’s stock price has risen nearly 30% this year, while Bitcoin has increased by about 40%.
Lawsuits with regulatory agencies
In the shareholder letter, Coinbase also discussed its ongoing legal issues with the US Securities and Exchange Commission (SEC) and political donation issues. The company mentioned that the Manhattan Federal Court decided in March this year to dismiss the SEC’s allegations that Coinbase acted as an unregistered broker through its wallet issuance but also noted that the court rejected the company’s request to dismiss the case entirely.
Coinbase stated:
Coinbase also emphasized its political contributions, stating that it is a donor to the Fairshake PAC, one of the leading super political action committees in the United States. The company stated that the political action committee supports pro-cryptocurrency candidates from both parties, and the pro-cryptocurrency movement has had an impact. It pointed out that in the primaries in March, “cryptocurrency voters made their presence felt in key states such as California, Texas, and Alabama by voting or helping pro-cryptocurrency candidates advance, showing that they exist.”
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