Crypto exchange Coinbase leapt Friday after its Q4 report late Thursday easily cleared Wall Street expectations. JPMorgan upgraded COIN stock prior to the results.
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 spiked 51% to $953.8 million, marking the exchange's second consecutive increase after six straight 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 leapt nearly 60% over the year to $492.5 million and improving from $274.5 million in Q3. Institutional transaction revenue increased 173% to $36.7 million, also climbing from $14.1 million last quarter.
Total subscription and services revenue climbed almost 33% to $375.4 million. Custodial fee revenue rose to $19.7 million, compared to $11.4 million last year and $15.8 million last quarter, respectively.
For Q1, Coinbase expects subscription and services revenue to range from $410 million to $480 million.
JPMorgan early Thursday upgraded COIN stock to neutral from underweight due to surging bitcoin, ethereum and broader cryptocurrency prices. The launch of spot bitcoin ETFs has translated into meaningful bitcoin price appreciation after initially being a "sell-the-news" event, the firm wrote in a research note. And that price appreciation is contributing to better spot bitcoin ETF flows, which is driving digital asset prices higher. JPMorgan expect cryptocurrency prices to not only sustain but improve Coinbase's activity levels and earnings power. The firm maintained its $80 price target on COIN stock — 50% below where shares closed on Wednesday.
Bitcoin Price Action
Bitcoin traded above $51,800 late Friday after hitting $52,838 overnight — running further up against December 2021 levels. Wednesday's action price action put the total market capitalization of all bitcoins back above the $1 trillion mark for the first time in more than two years. BTC is now up nearly 23% so far this year.
Meanwhile, Coinbase is serving as a custodian for eight of the newly-issued spot bitcoin ETFs, which continue surging as bitcoin rallies. The spot bitcoin ETFs rose less than 1% Friday after easing a fraction on Thursday and jumping more than 4.5% Wednesday.
The group accumulated more than $10 billion in assets during its first month of trading, which ended Feb. 11, according to Zacks.
BlackRock's iShares Bitcoin Trust has been the clear leader in fund inflows since the spot bitcoin ETFs launched Jan. 11. The iShares Bitcoin Trust reported inflows of $4.84 billion as of Feb. 14, BitMEX Research reported.
The Fidelity Wise Origin Bitcoin Fund ranks second at $3.43 billion in inflows.
Grayscale Bitcoin Trust recorded about $6.68 billion in outflows through Feb. 14, which have steadily slowed. Still, Grayscale remains the leader in terms of assets, with $22.83 billion in assets under management.
Despite Grayscale's outflows, the spot bitcoin ETFs saw a total of about $4.12 billion in inflows since launch, BitMEX Research reported.
Coinbase Stock
Coinbase stock jumped 8.8% Friday after spiking more than 15% in early trade. Shares passed a 187.39 buy point for a third-stage cup base in morning trade before gains eased. Shares advanced 3.3% during trading hours Thursday and leapt 14.2% higher Wednesday.
Shares are up 42.5% so far this month but only gained about 3.7% so far this year.
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