On February 13, Coinbase, a cryptocurrency exchange, exceeded fourth-quarter profit expectations due to increased trading volumes in Bitcoin and other digital assets following the U.S. election.
The surge in crypto interest after Donald Trump's win in the November election was notable, as investors anticipated more crypto-friendly policies under the new administration. Trump's pro-crypto stance, supported by figures like Paul Atkins, provided a sharp contrast to the previous administration's views on the industry.
Coinbase CEO Brian Armstrong expressed optimism during an earnings call, stating, "We're really entering a golden age for crypto...the regulatory overhang is lifting."
In the last quarter of 2020, Coinbase reported earnings of $4.68 per share, surpassing analysts' expectations of $1.81 per share. The profit was bolstered by $476 million in pre-tax gains on its crypto assets.
Transaction revenue soared by 172% to $1.6 billion, while revenue from non-trading services rose by 15% to $641 million. Overall revenue increased to $2.3 billion from $953.8 million year-on-year.
John Wu, President of Ava Labs, highlighted Coinbase's advantage over Robinhood in terms of token variety and value-added services, emphasizing Coinbase's need to evolve beyond retail to compete in institutional trading.
As competition in the cryptocurrency market intensifies, Coinbase faces challenges from Robinhood, gaining market share and poised for further growth under a crypto-friendly regulatory environment as indicated by Bernstein's recent note.
Lastly, further developments were expected, as the SEC awaited regulatory clarity on cryptocurrencies.