Cryptocurrency exchange Coinbase (COIN) late Wednesday announced that third-quarter revenue grew 78%, but still slightly below analyst estimates. Coinbase also missed Q3 earnings views. The stock retreated Thursday even as bitcoin traded near record high levels.
Coinbase reported Wednesday Q3 earnings of 28 cents per share, up from a loss of 1 cent a year ago. Revenue totaled $1.21 billion. Prior to Wednesday’s announcement, analyst consensus projected third-quarter EPS of 45 cents on $1.26 billion in sales, according to FactSet.
“The upcoming 2024 elections are the next major milestone in our ongoing work to drive regulatory clarity for crypto. The voices of tens of millions of American crypto owners — many in swing states — have formed an undeniable voting bloc and built momentum on both sides of the aisle toward pro-crypto legislation,” Coinbase noted in its release Wednesday.
“We are excited to work with either administration in 2025 and believe the odds for meaningful, pro-crypto regulation have never been stronger,” the crypto exchange added.
Total trading volume increased 143% to $185 billion, with analysts predicting $185.3 billion. The bulk of that growth came from institutional customers. Institutional trading volume grew 132% to $151 billion, below expectations of $157 billion. Retail trading volume totaled $34 billion, with forecasts calling for $28.3 billion in volume.
Transaction revenue grew nearly 100% to $572.5 million. Analysts expected $621 million in transaction revenue.
Subscription and services revenue grew to $556.1 million, while analysts expected $573 million. Custodial fee revenue rose to $32 million from $16 million for the same quarter in 2023. Analysts expected Coinbase to generate $34 million in custodial fee revenue.
Coinbase guided at the end of the second quarter for Q3 subscription and services revenue to between $530 million and $600 million, compared to $334 million last year.
Looking to the fourth quarter, Coinbase reported Wednesday that in October it generated approximately $190 million in total transaction revenue and that it expects Q4 subscription and services revenue to be within a range of $505 million-$580 million.
The exchange is serving as the custodian for a majority of the U.S. spot bitcoin ETFs that launched in January, as well as many of the spot ethereum ETFs that began trading on July 23.
The exchange said it ended Q3 with $137 billion in assets under custody.
Coinbase Stock
Coinbase stock sank 15.3% to 179.25 during regular market trade on Thursday, adding to a 3.6% drop on Wednesday. COIN stock surged 5.4% Monday and bounced off its 200-day line.
COIN stock entered Thursday trade after rallying about 24% so far this year, and about 25% below its March high.
Cryptocurrency Prices
Elsewhere, cryptocurrency prices continued climbing as bitcoin scrambled to around $70,000 on Thursday.
Bitcoin miners have rallied on the surge, with the likes of Bit Digital (BTBT) and Core Scientific (CORZ) benefiting from an expansion into artificial intelligence.
Global crypto funds registered $901 million in inflows last week, bringing the total for October to nearly $3.4 billion, CoinShares data shows. October is pacing as the fourth-largest month for crypto inflows on record and pushed the year-to-date inflows to $27 billion — almost tripling the 2021 record of $10.5 billion. CoinShares noted that bitcoin saw $920 million in inflows, with modest outflows from ethereum and solana.
Meanwhile, spot bitcoin ETFs generated $997.6 million in inflows last week, driven by $402 million in inflows on Friday, according to Farside Investors data. The bitcoin ETFs have seen $22 billion in inflows since the Jan. 11 launch, dominated by BlackRock’s iShares Bitcoin ETF (IBIT) with $23.99 billion. The Grayscale Bitcoin Trust (GBTC) has seen about $20 billion in outflows since mid-January.
Bitcoin has rallied more than 30% from a Sept. 6 low, and is closing in on its March 14 record high of $73,798. That surpassed its previous all-time high of $68,990 set in November 2021.
The world’s largest cryptocurrency rebounded about 160% in 2023. Bitcoin is up about 70% so far this year.
Other Crypto-Related Earnings
Meanwhile, bitcoin buyer MicroStrategy (MSTR) also reported third-quarter earnings and revenue late Wednesday.
The outfit reported Q3 sales fell 10% to $116.1 million along with a loss of $1.72 per share. FactSet consensus expected a 12 cent per share loss on $121.5 million in sales.
MicroStrategy also announced on Wednesday plans to raise $42 billion over the next 3 years, comprised of $21 billion of equity and $21 billion of fixed income securities.
“As a Bitcoin Treasury Company, we plan to use the additional capital to buy more bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield,” Chief Executive Phong Le said in the earnings release.
