Coinbase Records Positive Performance In Fourth Quarter 2023

JAKARTA - Coinbase, the largest crypto exchange in the US, reported impressive fourth quarter 2023 financial results, with significantly increasing trading revenue and volume. The company also managed to score a net profit for the first time since the IPO in April 2021. The increase in prices and interest in crypto, especially Bitcoin, is the main factor behind Coinbase's performance.

Coinbase announced its fourth-quarter 2023 financial results on Thursday, February 15, 2024, following market closures. Based on reports published on the company's official website, Coinbase recorded revenues of US$629 million (Rp 8.8 trillion), up 16% from the previous quarter, and surpassing analyst expectations that averaged US$590 million (Rp 8.3 trillion).

Coinbase's revenue comes mainly from transaction fees imposed on users, both retail and institutional, who trade crypto on its platform. Coinbase trading volume reached 145 billion US dollars (Rp 2,036 trillion) in the fourth quarter of 2023, up 90% from the previous quarter, in line with the surge in crypto prices and activity in the global market.

In addition to revenue, Coinbase also reported a net profit of US$840 million (Rp 11.8 trillion), or US$2.46 per share, based on the principles of accounting received in general (GAAP). This is a tremendous achievement for Coinbase, which previously lost money since the IPO in April 2021. In the third quarter of 2023, Coinbase recorded a net loss of US$405 million (Rp 5.7 trillion), or US$1.19 per share.

Coinbase's net profit also exceeds analyst expectations, which estimates an average loss of USD 2.55 per share. Coinbase's net profit reflects the company's good operational efficiency and cost management, which managed to reduce operating expenses by 9% from the previous quarter.

Factors That Encourage Coinbase's Performance

One of the main factors driving Coinbase's performance in the fourth quarter of 2023 is rising prices and interest in crypto, especially Bitcoin, which is the largest and most popular crypto asset. Bitcoin hit an all-time high of over US$50,000 (Rp 703 million) in January 2024, after the US Securities and Exchange Commission (SEC) approved the first spot of bitcoin ETF in the US on January 10.

The spot's bitcoin ETF is a financial product that allows investors to buy and sell bitcoin on the stock exchange, without having to own or store bitcoin directly. The spot's bitcoin ETF is considered a breakthrough for the crypto industry, as it provides easier, safer, and more regular access to retail and institutional investors, as well as increases the legitimacy and widespread adoption of crypto.

The increase in the price of Bitcoin also has a positive impact on altcoins, namely crypto assets other than Bitcoin, which usually have different features and functions. Some of the altcoins popular among Coinbase users are Ethereum, Cardano, Solana, and Polkadot. Altcoin is often more volatile than Bitcoin, which means they can provide a higher profit potential, but also a greater risk.