Coinbase has reported a massive financial upswing in its fourth-quarter earnings, marking one of its best-performing quarters in over a year. The cryptocurrency exchange saw net revenue climb to $2.2 billion, surpassing industry expectations, with net income reaching an impressive $1.29 billion.
Post-Election Market Boom
The surge in Coinbase’s revenue and trading volume coincided with the re-election of U.S. President Donald Trump, whose pro-crypto stance has reignited market optimism. Trading volumes soared to $439 billion in Q4, exceeding the projected $404 billion, as investors responded positively to Trump’s vision of making America the “world’s crypto capital.”
The election’s impact was particularly evident in institutional trading, which saw a 155% increase quarter-over-quarter, reaching $141.3 million. Meanwhile, consumer transaction revenue skyrocketed by 178% to $1.35 billion. Crypto market volatility and rising asset prices were key drivers behind these gains, as noted in Coinbase’s shareholder letter.
Expanding Revenue Streams
Beyond trading, Coinbase has been expanding its revenue sources through subscriptions and services. The exchange reported $225.9 million in stablecoin revenue and $214.9 million from blockchain rewards, the latter reflecting a 38.8% quarterly growth. The supply of USDC, a dollar-pegged stablecoin, rose by 23% on the platform, boosting Coinbase’s stablecoin earnings.
The future of finance is already here. https://t.co/kcbFxfPcBd
— Coinbase 🛡️ (@coinbase) February 12, 2025
However, Ethereum staking—another potential revenue driver—has faced challenges. Q4 saw a net outflow of nearly 1.3 million ETH from staking, aligning with a broader trend of declining staking activity. Analysts suggest that a friendlier regulatory environment under Trump could improve this situation in the long run.
Following the earnings report, Coinbase’s stock jumped 8.44% to $298.1 during regular trading on Feb. 13 but experienced minor volatility in after-hours trading, slipping 0.88% to $295.01. The exchange’s strong Q4 performance came on the heels of a stellar quarter for Robinhood, which also reported a 700% year-on-year increase in crypto revenue.
While institutional activity remains strong, the return of retail traders—a historically significant revenue source for Coinbase—has yet to materialize. Retail trading volume now accounts for just 18% of overall activity, a sharp drop from 40% in 2021.
Global Expansion and Regulatory Relief
Looking ahead, Coinbase is actively seeking international expansion, with discussions underway to re-enter the Indian market after suspending operations there in 2023. Additionally, regulatory challenges in the U.S. could ease under Trump’s administration, potentially benefiting Coinbase’s growth. Equity researchers at Morningstar view the election results as a net positive for the exchange, given its past regulatory battles with the SEC.
With renewed market confidence, surging institutional engagement, and evolving revenue models, Coinbase’s trajectory appears promising. As the crypto industry anticipates further policy shifts under Trump’s leadership, Coinbase stands well-positioned to capitalize on the new wave of investor enthusiasm.
Richard Adrian
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice of this sort, HODL FM strongly recommends contacting a qualified industry professional.
