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Coinbase Crushes First Quarter. Are Exchanges on the Rebound?

By Evan Jones05/13/2024

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Coinbase Global (COIN), the largest cryptocurrency exchange in the US, is reporting $1.2 billion in net revenue for the first quarter of 2024, beating estimates. The report is probably not that surprising for those within the sector, as Coinbase has benefited from the approval of spot Bitcoin ETFs and subsequently being the custodian for 8 of 11 US-based spot Bitcoin ETFs. 

Bitcoin (BTC) itself also hit a new all time high of over $73,000 USD during the first quarter, with Coinbase being a popular place to buy and sell the asset, adding to the benefits seen for COIN when Bitcoin performs well.

Coinbase Outpaces Entire 2023 Earnings

The nearly $1.2 billion in net income ($1.18 billion), works out to be about $1 billion in adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization, for the first quarter of 2024. Coinbase’s EBITDA for the entire year of 2023 was $977 million, meaning that they’ve already beaten last year’s performance in just a quarter. 

They’ve seen a 64% increase in revenue from custodial services, which includes their custody of the Bitcoin held by the aforementioned spot Bitcoin ETF providers. Institutional transactions were also up by 133% compared to the last quarter of 2023, with those transactions generating $85 million in revenue for Coinbase.

The strong quarter resulted in an earnings per share of $4.40, compared to a $0.34 EPS in 2023. Coinbase reported its first profit in two years in February, further showing just how strong their first quarter has been compared to previous years. The London Stock Exchange Group had estimated that Coinbase would see $1.09 in adjusted earnings per share, but they came in at $2.15, nearly doubling the estimates.

Crypto.com Surpasses 100 Million Users

Coinbase isn’t the only crypto exchange having a good first quarter though, as Crypto.com surpassed 100 million global users in early May. The company has been partnering with globally recognized brands for a few years now and the partnerships seem to be paying off with this latest announcement. 

Crypto.com’s user base has doubled since they first sponsored the Formula 1 Crypto.com Miami Grand Prix in 2022, and they continue to sponsor that race along with a variety of other global brands. These sponsorships include being the name on the arena for the Los Angeles Lakers, having their logo on the Philadelphia 76ers jerseys, and also being a sponsor for the Montreal Canadiens in the NHL. 

Having their name on an arena certainly helps, as LA teams in both the NHL and NBA were in the playoffs this year, bringing a lot of media attention to the arenas and therefore showcasing the Crypto.com brand.

Closing Thoughts

It should perhaps be no surprise that crypto exchanges have done better this year than last, considering how poorly markets performed in 2023. However, it is a bit surprising that they’re doing exponentially better, though it is a welcome surprise for those within the sector. With interest rates and inflation still running rampant throughout the globe, it will be interesting to see how cryptocurrency exchanges continue to rebound over the rest of 2024 and beyond.

Article tags

cryptocurrency
Exchanges
investing
Evan Jones

Author

Evan entered the crypto scene in 2017, attracted to the many disruptive possibilities that blockchain could have on current world systems. He has a keen interest in decentralized services, payment processing, and viable NFT use cases such as event ticketing. He spends his days writing with his dog Kobe under his feet, if not on his lap.

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