Coinbase Global (COIN.O) experienced a significant turnaround in the first quarter, reporting a profit exceeding $1 billion compared to a loss from the previous year. This surge in profitability was attributed to increased cryptocurrency trading following the debut of the first U.S.-listed exchange-traded funds (ETFs) tracking bitcoin in January.
The company announced a net income of $1.2 billion, or $4.84 per share, for the three-month period ending March 31, marking a stark contrast from the $79 million loss, or $0.34 per share, reported in the same period last year. Despite this positive report, Coinbase shares dipped 2.5% in after-hours trading, following a nearly 9% increase during the trading session.
According to Paul Marino, chief revenue officer at investment firm GraniteShares, concerns over potential decreases in trading volumes due to downward movements in bitcoin prices contributed to the post-earnings decline. Nonetheless, Coinbase’s role as custodian for several spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT.O), has fueled investor enthusiasm in digital assets. Trading volumes on Coinbase surged to $312 billion in the first quarter, up from $145 billion in the previous year. CEO Brian Armstrong attributed this success to the company’s focus on cost efficiency and innovation.
