News
Coinbase shares jump on big profit jump as trading volume surges: Key level to watch
Key points
- Shares of Coinbase rose sharply in after-hours trading after the cryptocurrency exchange reported fourth-quarter earnings and revenue that significantly beat Wall Street estimates.
- The company said that excitement around the approval of spot Bitcoin ETFs and expectations of improving macroeconomic conditions in 2024 boosted quarterly transaction revenue.
- Coinbase stock could face resistance from the upper trend line of an ascending channel near $210.
Coinbase Global, Inc.
Source: TradingView.com.
Coinbase (CURRENCY) shares jumped more than 14% in Thursday’s extended trading session after the biggest U.S. event cryptocurrency exchange reported quarterly earnings and income significantly above Wall Street expectations thanks to the growth in trading volumes.
The cryptocurrency exchange, which allows investors to buy, sell, receive or hold digital assets, has published its fourth-quarter data adjusted earnings of $1.04 per share, compared to a loss of $2.46 per share in the corresponding quarter last year. Analysts had expected the company to report earnings of just 2 cents per share. Total revenue of nearly $954 million grew 41% on a sequential basis and also exceeded the consensus estimate, which Wall Street had set at 826 million dollars.
Quarterly results were boosted by transaction revenues up 64% year-over-year, on the back of excitement surrounding Bitcoin Spot ETFs approvals and expectations for improving macroeconomic conditions in 2024. Looking ahead, the company said it expects first-quarter subscription and services revenue, a segment that includes non-trading activities, to range between $410 million and $480 million, beating Wall Street’s estimate of $356.22 million.
Coinbase also allayed investor concerns about the downturn market share stemming from increasing competition in the cryptocurrency trading industry from rival firms like Robinhood Markets (HOOD) and Fidelity Investments.
“I honestly believe that the concerns about fee compression have been around for years and we haven’t seen them,” said the company’s vice president of investor relations, Anil Gupta. The company published trading volumes of $154 billion in the fourth quarter, up from $76 billion in the third quarter and higher than analysts’ estimates of $142.7 billion.
After bottoming out in late December 2022, COIN stock has been trading within a ascending channeloscillating several times between the upper and lower levels of the pattern to establish the key support and resistance areas. More recently, buyers have stepped forward to defend a pullback towards 50-day moving averageindicating increasing bullish momentum in the stock. Amid an earnings-driven price rally, keep an eye on the top of the channel trend line It is currently hovering around $210, which investors may consider as a profit-taking area on the chart.
In extended trading on Thursday, shares of Coinbase rose 14.3% to $189.29.
The comments, opinions and analyses expressed on Investopedia are for informational purposes only. Read our warranty and disclaimer for more information.
As of the date of this writing, the author does not own any of the above-mentioned titles.