Coinbase’s Q1 Profits Skyrocketed to Over $1 Billion Amid ETF Craze

Coinbase Global (COIN) has reported its second consecutive quarterly profit, driven by a surge in crypto trading during the first three months of 2024. Despite this positive news, the stock of the largest US cryptocurrency exchange fell by almost 4% in pre-market trading on Friday.

The company’s net income rose to $1.17 billion, marking the highest figure in nine quarters, while net revenue increased by 115% compared to the same period last year. This boost in earnings was fueled by a revival in digital coin trading, largely attributed to the launch of new bitcoin ETFs in January.

Global crypto trading volume for major coins reached its highest level since 2021, increasing by 68% from the previous year. Coinbase’s transaction revenue soared to $1.07 billion, nearly three times what it earned in trading fees in the first quarter of 2023.

Despite the positive financial results, Coinbase faces challenges in gaining new users, with monthly transaction users declining by 5% compared to the same period last year. Additionally, the company hinted that second-quarter revenue from trading fees may not be as strong.

Coinbase is also dealing with regulatory issues, as it is currently facing a lawsuit from the SEC alleging violations of US federal securities laws. The company and its CEO, Brian Armstrong, are contesting these allegations, which could potentially take years to resolve.

Overall, Coinbase’s performance reflects the ongoing volatility and regulatory challenges in the cryptocurrency market, despite the company’s efforts to capitalize on the growing interest in digital assets.