Coinbase will report on Thursday a substantial increase in revenue for the fourth quarter, following a rise in cryptocurrency values after Donald Trump returned to his White House.
Investors will be watching to see if it has taken advantage of the renewed interest in crypto, as this has sent the stock price skyrocketing.
Analyst estimates by FactSet predict that Coinbase will post earnings of $2.11 per share and revenues of $1.84billion, almost doubling the $954m from a year ago.
This would be one of the strongest quarters for the company in recent years if these figures hold.
Coinbase sees strong trading volume but faces competition
Coinbase is expecting its trading volume to increase to $216 billion during the fourth quarter, from $185 in the third and from $154 in the year before.
This is still a far cry from the $312 Billion that was recorded when Bitcoin spot ETFs first became available in 2024.
Investors are concerned about whether Coinbase will be able to maintain its position in spite of increased competition.
Traditional brokerage firms may enter the crypto market with a softer regulatory environment, and could potentially eat into Coinbase’s market share.
The subscriptions and services revenues, including earnings from stablecoin USDC are expected to increase to $611 millions, compared to $375 in the prior year.
The trading segment is more volatile. This business provides a stable income stream.
Wall Street’s expectations for COIN
Coinbase’s shares are up 40% since Donald Trump’s election, to $272. Bitcoin is also up 42% to $96,882.
Analysts are divided over whether Coinbase will live up to expectations.
Citi analysts increased their Coinbase price target to $350, up from $275. They cited strong market conditions as well as regulatory tailwinds.
In a recent note, analysts from the bank stated that they “maintain our bullish hypothesis on COIN” and believe the company is well-positioned to profit as the crypto industry begins its potential transition into a brand new era.
The stock is rated as a Buy by the analysts.
Ken Worthington of JPMorgan is, however, more cautious.
He acknowledged that the election in November was “a monumental catalyst for the cryptocurrency ecosystem” but remained neutral about the shares.
His estimate of fourth-quarter revenues is $1.77 Billion, which also falls short of the consensus $1.8 Billion.
Robinhood’s profits could be good for Coinbase
Robinhood’s strong fourth quarter revenue, of $1.01 billion, is another factor that may bode well. This was up 115% on the prior year.
Robinhood’s revenue from crypto trading increased by 700% as a result of renewed interest among retail customers in digital assets.
Analysts believe that Coinbase’s user base could be similar to Coinbase, since both companies have a retail trading platform.
Coinbase could have one of the best quarters ever since the crypto bull market if its trading volume matches expectations.
Trump’s crypto policy remains a key factor in the outlook
The cryptocurrency market has changed dramatically since Trump won the election in November.
By easing regulations, the president pledges to turn the United States into the “crypto-capital of the world”.
It has been a rapid move by the administration to adopt crypto-friendly policies.
Trump appointed figures who are crypto-friendly to important regulatory posts, such as Mark Uyeda to the position of acting SEC Chairman and David Sacks as venture capitalist to head a White House initiative to regulate crypto.
SEC already has a group of working to create a more clear legal framework.
The regulatory changes may have an impact directly on Coinbase.
In 2023 the SEC filed a lawsuit against this exchange, alleging that it was an unregistered security exchange.
Analysts now believe that the agency could either settle the case or drop the suit, allowing Coinbase to operate without disruption.
The broader cryptocurrency industry, as Coinbase is preparing to announce its earnings, will be watching the Trump Administration for any further developments in regulatory matters.
Coinbase’s offerings could be expanded if the SEC, and other regulatory agencies, continue to relax restrictions. This would include adding more tokens that can be traded and new financial products.
Analysts remain optimistic about Coinbase’s ability to take advantage of the newly pro-crypto climate, despite the possibility for increased competition.
First real look at how Trump’s policy is already affecting the future of industry.
The post Coinbase Earnings Preview: Strong Quarter on the Horizon, Following HOOD’s Lead appeared first on ICD
