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Coinbase reported revenue of $1.64 billion during the first quarter, surpassing the expected amount of $1.34 billion.
The increase in revenue comes amid a strong Bitcoin rally that has had a significant impact on the crypto market.
The company's earnings came in at $4.40 per share, a substantial improvement over analysts' average estimate of $1.09, although differences in accounting methods may affect comparability. This represents a significant recovery from the prior year's loss of $78.9 million, or 34 cents per share.
A significant component of the revenue was a $650 million mark-to-market gain on digital assets held for investment, following new accounting standards adopted by the company.
Transaction revenue, a key revenue source for Coinbase, nearly tripled this quarter to $1.07 billion, with consumer transaction revenue alone climbing to $935 million, double from the previous quarter. 'last year.
Consumer transaction revenue reached $935 million, an increase of more than 100% from the previous year.
The company's shares have seen a remarkable 30% increase this year, following a nearly 5-fold increase in 2023. This rise is closely linked to the performance of Bitcoin, which not only affects trading volumes but also drives the request for additional services offered by Coinbase.
During the quarter, bitcoin reached a new all-time high, crossing $73,000 in March. Ethereum, the second largest cryptocurrency, has also attracted considerable interest following its major upgrade earlier in the year. The crypto sector has attracted significant institutional investment, especially after the SEC approved several US Bitcoin spot ETFs, many of which chose Coinbase as their custodial partner.
Despite these positive developments, Coinbase faces challenges, including a legal battle with the SEC over allegations of unregistered securities sales, a claim that will be decided by a jury trial. Furthermore, competition is intensifying, particularly from Crypto.com which has regained market share in recent months.
Amid these financial highs, Coinbase also saw a notable increase in insider selling.
According to analysts at Raymond James, insiders, including four senior executives, sold shares worth $383 million during the quarter, a significant increase from previous periods and the largest since the company's listing. on Nasdaq in 2021.
Fred Ehrsam, co-founder and board member, was the biggest seller, cashing in on $129 million worth of stock.
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