How did Coinbase's cost structure improve in 2024?

Coinbase's cost structure improved significantly in 2024 due to a combination of strategic initiatives and operational efficiencies:

1. **Dynamic Expense Adjustment**: Coinbase adjusted its expense base dynamically in response to market conditions and revenue opportunities. This allowed the company to optimize costs during periods of lower volatility and higher revenue.
2. **Cost-Cutting Measures**: In 2023, Coinbase had implemented significant cost-cutting measures, reducing expenses by 45% to ensure positive adjusted EBITDA in any market scenario. These cost-saving measures likely had a lasting impact on the company's overall cost structure.
3. **Operational Efficiency Gains**: The company's operational efficiency improved markedly, as evidenced by the substantial increase in operating income from a loss in 2023 to $2,307 million in 2024. This improvement was due to a combination of factors, including technological innovations and better management of transaction and subscription services.
4. **Technological Advancements**: Coinbase's investment in technology and development paid off, as the company was able to optimize its infrastructure and reduce costs through the use of AWS and other cloud optimization initiatives. This not only improved efficiency but also allowed the company to scale more efficiently.
5. **Subscription-Based Model Growth**: The shift towards a subscription-based model brought stable revenue streams, reducing the dependence on volatile trading fees and improving overall cost predictability.

In summary, Coinbase's cost structure improved in 2024 due to a combination of strategic cost-cutting, operational efficiency gains, technological advancements, and the growth of its subscription-based model. These improvements allowed the company to enhance its financial performance and profitability.