Crypto Boom: Coinbase, Robinhood Smash Q4 Earnings

Coinbase and Robinhood, two prominent exchanges in the crypto and stock trading sectors, have reported strong earnings for the fourth quarter of 2024, surpassing analysts' expectations. This positive performance has led to an increase in price targets for both companies by various stock analysts.

Soaring crypto trading volumes in the last three months of 2024 drove higher-than-expected revenues and profits for Coinbase and Robinhood. Coinbase posted its strongest quarter of earnings in over a year, while Robinhood's Q4 profits beat consensus estimates, with crypto revenue jumping 700% year-on-year.

Analysts at JPMorgan and US Tiger Securities raised price targets for Coinbase's stock, COIN, to $344 and $300 per share, respectively, up from $264 and $265. Coinbase's Feb. 13 financial results showed the firm hit a total revenue of $2.3 billion, up 88% quarter-on-quarter, while net income was $1.3 billion, both far exceeding analyst expectations.

In Q4, retail trading volumes on Coinbase surged to $94 billion, and institutional volumes hit $345 billion, a three-year high. Beyond trading, Coinbase earns revenues from services including digital asset custody, on-ramping stablecoins, and facilitating crypto staking.

JPMorgan also raised targets for Robinhood shares, HOOD, to $45 from $39. Robinhood reported $358 million in crypto transaction revenue, representing 35% of total revenue, which is its highest contribution ever. Robinhood's crypto revenues are poised for further growth as the brokerage prepares to add more token types and finalize its acquisition of crypto exchange Bitstamp.

The surge in crypto trading was fueled by renewed market optimism following the U.S. election. President Trump has promised to make America "the world's crypto capital" and has nominated pro-industry leaders to head key agencies. In the past 12 months, shares of Coinbase and Robinhood have risen by approximately 112% and 365%, respectively.