Crypto exchange Coinbase (currency) broke out early Friday as stocks fell after the fourth-quarter report late Thursday easily beat Wall Street expectations. JPMorgan upgraded COIN stock ahead of results.
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Coinbase reported diluted earnings of $1.04 per share, improving from a loss of $2.46 per share last year and ending a streak of seven consecutive quarterly losses. Total revenue rose 51% to $953.8 million, marking the stock's second straight increase after six consecutive quarters of double-digit declines.
FactSet expected earnings of 2 cents per share on a 31% jump in revenue to $826 million.
Consumer transaction revenue jumped nearly 60% year over year to $492.5 million and improved from $274.5 million in the third quarter. Institutional transaction revenue rose 173% to $36.7 million, also up from $14.1 million last quarter.
Total subscription and services revenue increased approximately 33% to $375.4 million. Custody fee revenues increased to $19.7 million, compared to $11.4 million last year and $15.8 million last quarter, respectively.
For the first quarter, Coinbase expects subscriptions and services revenue to range from $410 million to $480 million.
JPMorgan early Thursday upgraded COIN stock to Neutral from Underweight due to rising Bitcoin, Ethereum and broader cryptocurrency prices. The launch of spot bitcoin ETFs has translated into a significant rally in bitcoin prices after initially being a “news selling” event, the company wrote in a research note. This price rise contributes to improved spot inflows of Bitcoin ETFs, leading to higher prices for the digital asset. JPMorgan expects cryptocurrency prices will not only maintain, but also improve, Coinbase's levels of activity and earnings power. The company maintained its $80 price target for COIN stock — 50% below the stock's closing price on Wednesday.
Bitcoin price movement
Bitcoin was trading at around $52,300 early Friday after hitting $52,838 overnight – rising further against December 2021 levels. Wednesday's price action brought the total market cap of all bitcoins back above the $1 trillion mark. For the first time in more than two years. BTC is now up about 24% so far this year.
Meanwhile, Coinbase is acting as a custodian for eight newly released spot Bitcoin ETFs, which continue to rise as Bitcoin rises. Spot bitcoin ETFs rose about 1% on Friday morning after a slight decline on Thursday and jumped more than 4.5% on Wednesday.
The group raised more than $10 billion in assets during its first month of trading, which ended on February 11, according to Zacks.
Black stone's (Black(iShares Bitcoin Trust)Ebit) has been the clear leader in fund flows since the launch of the spot Bitcoin ETFs on January 11. The iShares Bitcoin Trust reported inflows of $4.84 billion as of February 14, BitMEX Research reported.
Fidelity Wise Origin Bitcoin Fund (FBTC) came in second place with inflows worth $3.43 billion.
Grayscale bitcoin box (GBTCIt recorded about $6.68 billion in outflows as of February 14, which have slowed steadily. However, Grayscale is still the leader in terms of assets, with $22.83 billion in assets under management.
Despite Grayscale's outflows, spot bitcoin ETFs have seen a total of about $4.12 billion in inflows since their launch, BitMEX Research reported.
Coinbase shares
Coinbase stock jumped 15.4% early Friday, opening above a 187.39 buy point for a Phase 3 cup base. Shares rose 3.3% during trading hours on Thursday and jumped 14.2% on Wednesday.
Shares are up 29.2% so far this month but are down 4.7% in 2024 through Thursday's close.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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