On Thursday, shares of cryptocurrency exchange Coinbase jumped 37% for the week in anticipation of the company's strong earnings report. The cryptocurrency exchange's fortunes are on the rise amid strong growth in Bitcoin, as well as the launch of a Bitcoin ETF where Coinbase acts as custodian for most issuers.
The company will release its fourth-quarter results on Thursday, and experts are predicting a significant increase in trading volume this quarter, Cointelegraph reported.
According to MarketWatch and FactSet, analysts are confident of strong growth in Coinbase's fourth quarter revenue to $825 million. The growth will be about 22% of the third quarter figures.
Trading volume, according to experts, doubled from $76 billion in the third quarter to $142.7 billion in the fourth quarter. This will be the main reason for the company's revenue increase.
Coinbase is expected to report earnings per share of $0.02 in the fourth quarter, up from a reported loss of $0.01 per share in the third quarter.
The price of Bitcoin has risen 17.3% in the last seven days and is trading at $52,068.44 at the time of writing.
Robinhood also reported an increase in revenue for the fourth quarter, which it attributed to an increase in cryptocurrency trading volume.
Robinhood's fourth-quarter revenue grew 24% year over year, helped by $43 million in cryptocurrency trading revenue.
It's worth noting that analysts at JPMorgan called the launch of the Bitcoin ETF "disappointing" and predicted a decline in Coinbase's share price in 2024.
Despite that, investment inflows into spot Bitcoin ETFs have already surpassed $10 billion, reversing outflows from the GBTC Grayscale fund between January 11 and February 2, with net inflows increasing significantly in recent days.
Coinbase has become the Bitcoin custodian for eight of the 11 issuers of spot Bitcoin ETFs, including BlackRock, iShares, and Valkyrie.
However, a deterrent to the cryptocurrency exchange's stock growth remains its pending litigation with the US Securities and Exchange Commission (SEC), but many industry experts believe Coinbase will win the case against the SEC.
The SEC sued Coinbase in June 2023, accusing the exchange of failing to comply with the Securities Act and selling tokens as unregistered securities.
Shares of Coinbase (COIN) are trading at $160.38 at the time of this writing, up 14.24% overnight.
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