Coinbase's Strong Performance Forecast Amid Bitcoin's Rise; Skepticism Lingers for 2024
Summary:
Coinbase shares have grown 37% over the past week, in line with Bitcoin's recent surge. Analysts predict a robust Q4 report from Coinbase, with revenue expected to rise by 22% to $825 million and earnings per share forecasted at $0.02. Robinhood, a rival trading platform, has also revealed increased revenues due to enhanced crypto trading. Despite some skepticism regarding the platform's 2024 success, due to the struggling Bitcoin ETF trading and ongoing litigation with the SEC, Coinbase shares continue an upward trend along with a broader rally in the crypto sector.
The cryptocurrency exchange Coinbase has seen a 37% increase in its shares in the past week, aligning with a recent rise in Bitcoin prices. As Coinbase readies to present its fourth-quarter results on Thursday, market analysts are predicting robust figures. Compiled data from MarketWatch and FactSet indicate consensus among analysts for a significant hike in Coinbase's fourth quarter revenue, anticipating about a 22% increase from the third quarter figures, rounding up to $825 million.
The prediction stems from an expected surge in trading volumes, almost doubling the $76 billion from the Q3 period to $142.7 billion in Q4. Forecasts also position Coinbase's fourth-quarter earnings-per-share at $0.02, marking a turnaround from the reported loss of $0.01 per share in the third quarter.
This rise comes at a time when Bitcoin's value has seen a 16.3% increase over the past week as per the data from Coinmarketcap. Notably, on February 13, Robinhood, a rival trading platform, reported an overall increase in revenue for the fourth quarter, driven predominantly by cryptocurrency trading. Robinhood's revenue for Q4 rose year on year by 24%, propped up by stellar crypto trading revenues that rose by 10%.
Despite the encouraging figures, there are skeptics uncertain of Coinbase's continued success in 2024. In an investor note dated January 22, analysts at JPMorgan forecasted a likely drop in Coinbase's share price in 2024, basing their gloomy predictions largely on the subpar start to spot Bitcoin ETFs trading.
However, it’s worth noting that despite the shaky start, Bitcoin ETF flows have grown significantly in the last few days, mainly driven by a nearly $6 billion departure from Grayscale's recent GBTC conversion fund between January 11 and February 2. BlackRock's IBIT saw $493 million worth of inflows on February 13, while all 10 ETFs observed a cumulative $631 million in net inflows on the same day.
In the context of ongoing litigation with the U.S. Securities and Exchange Commission against Coinbase, legal expert James Murphy, a.k.a "MetaLawMan", conveys confidence that SEC will hanker down their case against Coinbase. As per the SEC's charges levied in June 2023, Coinbase was sued for breaching SEC rules and for alleged distribution of unregistered securities.
In the present scenario, Coinbase shares have recorded a 14% rise, while wider momentum in the crypto sector has propelled many publicly traded crypto firms, including Bitcoin, which recently crossed the $50,000 mark on February 13.
Published At
2/15/2024 4:58:59 AM
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