Coinbase is profitable again for the first time in 2 years: report

Although Coinbase has always been one of the most popular trading platforms, in the last few years doing business has not been easier for them than the popular exchanges.

Due to the crypto winter, ongoing lawsuits, the need to cut staff and other costs of running a business, Coinbase has experienced a two-year contraction in business.

However, the exchange rate has changed.

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The first profitable quarter in two years

Coinbase's quarterly report is in, and the exchange has reason to celebrate. According to the Q4 FY2023 fiscal report, the company brought in $273 million in net revenue in the last two months. Total revenues increased to $953.8 million, beating analysts' forecasts by more than $100 million.

After taking out the negative impact of previous quarters, this figure brings Coinbase's final total for 2023 net profit to $95 million.

A good part of the exchange's recovery has boosted crypto prices in recent weeks.

Coinbase CFO Alesia Haas directly addressed their financial statements in part due to the price confusion in recent memory.

“Increased volatility has had a meaningful impact on our trading revenue. We've seen strong growth and reconnection from both simple and advanced traders. Average trading volumes have increased among our advanced traders.”

The current price of BTC and other cryptocurrencies has also brought FTX, for example, investors believe that they may finally get paid.

However, it is not the only reason here.

Showing stability

For example, JPMorgan downgraded Coinbase from neutral to underweight, citing Bitcoin's price volatility and the launch of several ETFs, which provide financial institutions and high-net-worth investors alternative ways to gain well-adjusted exposure to crypto.

That decline has since been reversed.

Another reason, according to CEO Brian Armstrong, due to their commitment to stay on the safe side when it comes to compliance, Coinbase is growing and responding slower than some competitors in the market. However, this also helps prevent large-scale consequences for risky behavior.

“Coinbase, while not the popular choice, has taken a long-term approach focused on building compliance. Many of our competitors cut corners and broke the rules to finish fast, and we've seen how this strategy has worked.

The stock market reacted positively to news of Coinbase's quarterly success, with shares gaining 3.3% by the end of the day and 13% in afternoon trading.