Coinbase just dropped numbers that Wall Street didn’t see coming. The biggest crypto exchange in the U.S. reported fourth-quarter revenue of $2.27 billion, a 130% jump from last year and well past the $1.88 billion analysts had expected, according to LSEG data.
Net income? $1.3 billion, or $4.68 per share, compared to just $273 million, or $1.04 per share, a year ago. The surge came as a post-election crypto rally sent prices soaring, pushing trading volumes through the roof.
The company’s transaction revenue hit $1.56 billion, more than double last year’s number, crushing Wall Street’s $1.29 billion forecast. Trading volume also exploded, reaching $439 billion, up 185% year over year. Retail traders fueled most of the action, with consumer trading volume skyrocketing 224%, while institutional trading rose 176%. Coinbase shares jumped 2% in extended trading after the earnings release.
Trading frenzy fuels Coinbase’s record quarter
Coinbase credited its monster quarter to rising crypto prices and extreme volatility. “The majority of the Y/Y growth in Trading Volume was driven by higher levels of Crypto Asset Volatility—particularly in Q1 and Q4—as well as higher average crypto asset prices,” the company wrote in its shareholder letter.
The exchange pointed to two major catalysts: the launch of Bitcoin ETFs in Q1 2024 and the election of a pro-crypto President and Congress in Q4 2024. Both events fueled expectations of regulatory clarity, leading to a flood of spot crypto trading.
Wall Street had been bracing for strong numbers, but the actual results went beyond what analysts had priced in. Coinbase’s earnings per share ($4.68) crushed estimates ($1.81), showing just how much trading activity accelerated in the final months of 2024.
Robinhood’s earnings gave an early hint of Coinbase’s breakout quarter. The stock and crypto brokerage posted a 700% spike in crypto trading revenue and saw crypto volumes soar more than 400% in Q4. Robinhood’s stock surged 12% after its report, while Coinbase saw a 6% jump in sympathy.
Analyst John Todaro of Needham called Robinhood’s earnings a strong indicator for Coinbase, noting that a massive wave of retail trading in November and December pushed revenue to unexpected highs. “We are expecting a strong Q4 from COIN after HOOD posted better-than-expected results,” he wrote in a note. Todaro is keeping an eye on retail trading fees, stablecoin adoption, and crypto legislation timelines as key drivers for Coinbase’s 2025 performance.
Coinbase shifts focus beyond trading revenue
Despite record-breaking trading activity, Coinbase is working to diversify its revenue streams. Trading still makes up 68.5% of total revenue, but the company wants to expand its subscription and services business.
Revenue from subscriptions, which includes stablecoins, staking, custody, and Coinbase One, is projected to land between $685 million and $765 million in Q1 2025. One of the biggest drivers? USDC, the stablecoin issued by Circle, which has a revenue-sharing agreement with Coinbase.
Chief Financial Officer Alesia Haas told CNBC that USDC is well-positioned for growth as Congress moves closer to passing stablecoin legislation. “We can drive utility in this where we can drive more trading pairs on our own platforms denominated in USDC, which drives the liquidity, and the more liquidity you have in any asset, that drives more adoption,” she said.
CEO Brian Armstrong doubled down on USDC’s potential. “Our stretch goal is to make USDC the number one stablecoin,” he said on the earnings call. Right now, USDC holds 26% of the stablecoin market, trailing Tether’s 67%, but Coinbase sees an opportunity to increase adoption through deeper liquidity and regulatory clarity.
Looking ahead, Coinbase has already generated $750 million in trading revenue through February 11. Trading revenue is expected to remain in the mid-to-high teens as a percentage of net revenue in Q1 2025.
Not all analysts are convinced the trading boom will continue at this pace. Todaro cautioned that the meme coin mania crash in January could weigh on February trading volumes and drag into Q2. Robinhood’s crypto volumes suggest a 15% drop in Q1 from Q4, which could indicate a similar slowdown for Coinbase.
Robinhood CEO Vlad Tenev addressed the surge in crypto activity on his company’s earnings call, saying that nine different business lines generated over $100 million in annual revenue, with options, equities, and futures trading also driving growth. Net deposits for Robinhood hit $50 billion for the year, showing broader strength across asset classes, according to Vlad.
Wall Street raises price targets for Coinbase
“This is the dawn of a new era,” Armstrong said on the earnings call. He sees crypto rails handling up to 10% of global GDP by 2030, with Coinbase positioned as the go-to platform for companies looking to build in the space. Wall Street is buying in, with analysts raising their price targets and pointing to a friendlier U.S. regulatory climate under the Trump administration as a key tailwind.
Analyst Devin Ryan reiterated his market outperform rating, calling the Q4 performance broad-based and strong. He pointed to record-high Subscription & Services revenue of $641 million, up over 70% year-over-year, as a sign that Coinbase’s business model is diversifying beyond just trading fees.
“Coinbase is finally being unshackled to reach its full potential, which extends well beyond buying and selling digital assets,” Ryan said. He expects even stronger momentum ahead as the company continues expanding beyond just trading into services like staking, institutional offerings, and on-chain payments.
Analyst Owen Lau sees more gains ahead for Coinbase, keeping his outperform rating. He pointed to the exchange gaining market share from Robinhood (HOOD) since December, as well as USDC’s rise over USDT in the stablecoin space after MiCA regulations took effect in Europe.
Lau believes Coinbase could enter the prediction markets soon, while also pushing deeper into derivatives, tokenization, and Bitcoin-backed lending. He also flagged a potential S&P 500 inclusion for Coinbase as soon as March 7, which could be another major catalyst.
Kenneth Worthington remains neutral on Coinbase, but he doubled his 2026 earnings forecast after Thursday’s results. He called 2024 a “pivotal year” for crypto, noting that post-election momentum has brought new money into the market, driving higher activity levels that seem sustainable.
“The volume surge we saw post-election hasn’t faded, and that tells us this velocity of trading could be the new normal,” Worthington said. He believes crypto’s regulatory climate has completely flipped, setting the stage for continued growth.
Analyst Benjamin Budish kept an equal weight rating but acknowledged Coinbase’s strong first-quarter start and improving macro tailwinds. “The tone of the call was upbeat, and management is laying out broad global expansion plans,” Budish said. He noted that political and regulatory clarity could take time to fully emerge but called the shift in Washington a when, not an if.
Budish also pointed to Coinbase’s outperformance relative to the broader market, noting that after Robinhood’s earnings release, Coinbase jumped 8% versus just a 1% gain in the S&P 500.
Not everyone is fully convinced though. Analyst Patrick O’Shaughnessy maintained a market perform rating with no price target, warning that crypto hype cycles have burned investors before. He acknowledged that the post-election rally and regulatory clarity have “reawakened animal spirits,” but he remains skeptical about long-term sustainability.
“We have little confidence in the long-term sustainability of Coinbase’s current revenue and EBITDA momentum,” O’Shaughnessy said. He argued that as regulatory clarity improves, bigger traditional finance players will step in, driving fee compression. He also noted that memecoins have fueled a large portion of recent trading volume, and those booms tend to be temporary.
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