What caused Coinbase's net profit turnaround in late 2024?

Coinbase's net profit turnaround in late 2024 can be attributed to several key factors:

1. **Revenue Diversification**: Coinbase has successfully shifted its revenue model from transaction fees to subscription and services revenue. This diversification has been a significant contributor to its financial health, with subscription and services revenue projected to exceed $2 billion in 2024, up from $1.4 billion in 2023.
2. **Stablecoin Revenue Boost**: Although stablecoin revenue experienced a decline due to the lower interest rate environment and the impact of new USDC ecosystem participants, it still contributed significantly to Coinbase's revenue. The company reported a remarkable revenue increase, with total revenue reaching $6.6 billion for the year, and $2.27 billion in Q4 alone.
3. **Market Share Gains**: Coinbase has positioned itself as a market leader by waiting for more aggressive competitors to stumble, which has led to market-share gains in the exchange business and the expansion into derivatives. The company reported its seventh consecutive quarter of positive adjusted EBITDA and fourth consecutive quarter of positive net income, showcasing strong financial health despite softer market conditions.
4. **International Expansion**: Coinbase's expansion into new markets, such as Argentina and India, has opened up new revenue streams and opportunities for growth. The company reported revenues from these new markets exceeding direct operating costs, indicating a scalable business model.
5. **Strategic Initiatives**: Coinbase's introduction of innovative products such as smart wallets and Layer 2 solutions (Base) has simplified user onboarding and transaction processes, potentially increasing user adoption and engagement. The company is also actively engaging with policymakers to promote regulatory clarity, which could provide a favorable environment for its business.

These factors, combined with effective financial management and strategic growth initiatives, have contributed to Coinbase's net profit turnaround in late 2024.