Crypto boom boosts Coinbase Q4 earnings, but stock sinks anyway

Coinbase, the largest crypto exchange in the US, reported blowout fourth-quarter earnings on Thursday, thanks to the bull market buoyed by the new administration.  

“It’s the dawn of a new era for crypto,” cofounder and CEO Brian Armstrong said in a shareholder letter:

“Crypto’s voice was heard loud and clear in the US elections, and the era of regulation via enforcement that crippled our industry in the US is on its way out. The Trump Administration is moving fast to fulfill its promise of making the US the crypto capital of the planet, and globally, leaders are taking notice and increasing their attention and investment into crypto.”

Revenue jumped to $2.27 billion from $1.20 billion the previous quarter. It reported earnings per share of $4.68. Both figures well exceeded consensus estimates of $1.84 billion and $2.11 EPS, according to FactSet.

The stock got a quick post-earnings boost but ended yesterday flat. Today, it’s fallen more than 6% in early trading. Nic Puckrin, financial analyst and founder of Coin Bureau, said it was surprising given the “stellar results.”

“It may be that Coinbase’s success was overshadowed by Robinhood, which smashed its forecasts even more than Coinbase,” Puckrin said. “These strong results will also put pressure on both Coinbase and Robinhood to keep up the momentum in the new year, and it may be difficult to continue shooting the lights out in the same way over and over again.” 

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company.)

Coinbase also benefited from transaction revenue in the fourth quarter, clocking a 172% increase from the previous quarter to $1.6 billion.

Interestingly, 27% of the total transaction revenue stemmed from Bitcoin, followed by 14% from XRP and 10% from ethereum.

“Coinbase earnings show that they have benefited massively from the election of Donald Trump,” Alexander Blume, CEO of Two Prime, said. “The prospect of reduced regulatory burden also means that altcoin trading will continue to proliferate for the company.”

Subscription and services revenue “had an outstanding 64% year-over-year to $2.3 billion, driven by USDC, staking, and Coinbase One,” Armstrong said in the earnings call.

In addition, the company said that almost half of its trading customers in the quarter “were either new to Coinbase or resurrected from over a year ago,” underscoring the growing bullish sentiment with retail traders.

“There’s an opportunity to put other products in front of them. Maybe they want to get a loan on their bitcoin. Maybe they want to have a Coinbase card. Maybe they want to earn staking rewards,” Armstrong said. “So there’s more and more products we can put in front of them every time they come back.”

Coinbase went on a massive listing spree in the fourth quarter, adding 13 new tokens, including popular meme coins like pepe and dogwifhat.

Post-earnings, many analysts raised their price targets for the stock, including those at Barclays, who upped their target to $328 from $282.

Barclays analysts wrote:

“Unsurprisingly, the tone of the call was quite upbeat, with management outlining broad product and geographic ambitions, although we think the next catalyst — which is likely political/regulatory — may take some time to emerge (however, we also acknowledge the clear change in tone from D.C. and think this is a when, not an if).”

Armstrong laid out several priorities for the new year, including making USDC “the number one dollar stablecoin.”

“We are very bullish on stablecoins,” he said on the earnings call. “We’ll be accelerating the market cap growth of USDC with more partnerships.”

The company, which poured millions into the pro-crypto PAC Fairshake to advance more crypto-friendly legislation and candidates, announced it will make additional donations in 2026 and beyond.

“I think we have access to all the relevant decision-makers and folks in government now,” Armstong said. “It doesn’t mean they’re all going to do what we want, but at least we can get meetings and share our point of view.”

Yaël Bizouati-Kennedy is a financial journalist who’s written for Dow Jones, The Financial Times Group, and Business Insider.