Coinbase Surges 143% as Retail Returns

Coinbase, a leading cryptocurrency exchange, reported its quarterly results, drawing attention from both crypto and traditional finance (TradFi) investors. The company's net revenue for the fourth quarter of 2024 reached $2.2 billion, marking a 143% year-over-year increase and surpassing Oppenheimer analysts' estimate by $305 million. This growth was driven by a 172% increase in transaction revenue to nearly $1.6 billion and a 15% increase in subscription and services revenue to $641 million.

The most significant surprise in the results was the higher-than-expected participation from the retail segment, indicating a gradual return of retail users to the platform. This trend is reflected in the "consumer" line of the company's chart. Despite the range-bound performance of Bitcoin (BTC) in recent weeks, Coinbase's early 2025 numbers appear strong, with 2025 transaction revenue standing at $750 million as of February 11. The company forecasts Q1 subscription and services revenue to slightly increase to between $685 million and $765 million.

Morningstar analyst Michael Miller highlighted the exchange's USDC revenue in Q1 as a key metric to watch, given the stablecoin's recent all-time high market cap. Miller expressed curiosity about how a full quarter at Coinbase's scale will look and whether USDC continues to take market share away from other stablecoins. Coinbase's stock price was around $278 at 2 pm ET, down nearly 7% on the day. Oppenheimer analysts have a price target of $388 for the stock, while Miller believes the shares are overvalued, citing post-election market pricing that may be too optimistic.

Bitwise Asset Management predicts that Coinbase will surpass Charles Schwab as the world's most valuable brokerage by 2025, with its stock potentially topping $700 per share. This growth is expected to be driven by the company's stablecoin business, L2 Base, and staking and custody services. Another catalyst to watch for is Coinbase's possible inclusion in the S&P 500 index. The company's CEO, Brian Armstrong, emphasized the significance of a pro-crypto regulatory environment, noting that up to 10% of global GDP could be running on crypto rails by the end of