US-listed cryptocurrency exchange Coinbase saw a 15% surge in its stock price on the 16th following the release of its Q4 financial report on the 15th. The stock price reached a high of $193.64 during trading. Analysts in their report on Friday expressed optimism that institutional buying would provide “strong support” for the price of Bitcoin in the next 3 to 6 months.
Coinbase, the largest cryptocurrency exchange in the US, announced its Q4 financial report after the market closed on the 15th. It reported a net profit of $273.4 million, far exceeding Wall Street’s expectations and marking its first profitable quarter in two years. The company also predicted further revenue growth in Q1 of this year. As a result, Coinbase’s stock price surged 15% on the 16th.
According to Yahoo Finance data, the stock price of Coinbase reached a high of $193.64 during trading, the highest level since the end of March 2022. It closed at $180.31, representing an 8.84% increase.
In its Q4 financial report, Coinbase attributed its increased revenue to the market’s optimistic expectations for the SEC-approved Bitcoin spot ETF and the rise in Bitcoin prices, which led to a 64% year-on-year increase in trading revenue to $529.3 million in the fourth quarter of last year. Coinbase’s stock price also surged nearly 391% in 2023, far exceeding Bitcoin’s 155% annual increase last year.
In addition, Coinbase’s subscription and services division, which covers business outside of trading, saw a nearly 33% year-on-year increase in revenue to $375.4 million in the fourth quarter. Stablecoin business revenue contributed the most to this, as Coinbase partnered with Circle, the issuer of USDC, to earn interest from stablecoin holdings. The Federal Reserve’s interest rate hikes also contributed to Coinbase’s profitability.
On the other hand, Coinbase, as a custodian for several Bitcoin spot ETF issuers, released its latest Crypto Market Weekly Report on Friday, indicating that institutional buying will boost Bitcoin prices in the coming months. The report stated that institutional funds have flowed into existing 11 Bitcoin spot ETFs in the US, with more than $4.2 billion flowing in as of now. This is several times higher than the median estimate of $1 billion before the approval of the ETFs. Additionally, the net inflow of $3.3 billion into Bitcoin ETFs in the first month also exceeded the net inflow of $1.8 billion into the SPDR Gold ETF (GLD), one of the most successful ETF launches in history.
These figures highlight the increasing confidence of institutional investors in Bitcoin as an investable asset and have helped push the total market cap of cryptocurrencies above $2 trillion, reaching its highest level since March 2022. Coinbase analysts noted that Bitcoin’s price broke through the $52,000 mark last night, reaching a high of $52,572 before retreating to the range of $52,000, with a current price of $51,959, a slight decrease of 0.2% in the past 24 hours.