Coinbase, the leading US-based cryptocurrency exchange, delivered a performance in the first quarter of 2024, marking its position as a frontrunner in the digital asset space.
Accordingly, the company reported revenue of $1.6 billion, a 72% increase from the previous quarter, driven by favorable market conditions and business diversification efforts.
In the latest Coinbase shareholder letter, the surge in revenue translated into a net income of $1.18 billion, or $4.40 per share, a turnaround from the $78.9 million loss last year.
Correspondingly, this performance can be attributed to a boost in transactions driven by the broader crypto market's upswing and a change in crypto accounting rules.
In line with this, JMP Securities analysts highlighted Coinbase's introduction of its smart wallet, Coinbase Prime, and its growing international presence as developments, as per CoinDesk’s report.
Consequently, the US marketplace reported growth in consumer and institutional transaction revenue, which soared by 101% and 133%, respectively, compared to the previous quarter. This jump was fueled by improved market activity, user growth, and investment in product offerings.
At the same time, Coinbase's launch of its layer-2 blockchain, Base, garnered attention. Canaccord Genuity analysts believe this move can solidify the firm’s position by enabling low-cost transactions across its user and asset base.
In addition, the crypto exchange marked an uptick in balances for the USDC stablecoin, both on Coinbase's platform and in market capitalization, generating $197 million in revenue.
However, experts expressed caution regarding USDC balances, suggesting they may subside once rates begin to fall, impacting this revenue stream.
Moreover, the latest impressive report did not reflect Coinbase's previous legal battle with the US Securities and Exchange Commission (SEC), which commenced in February.
According to Traders Union, the crypto platform filed a petition in court, seeking permission to appeal the SEC's classification of certain digital assets as investment contracts.