Coinbase stock soars on big gains as trading volume increases—key level for WATC

Coinbase Global Co., Ltd.

Coinbase (COIN) stock soars more than 14% in after-hours trading on Thursday after the largest U.S. cryptocurrency exchange reported quarterly profit and revenue that significantly beat Wall Street expectations due to increased trading volume. did.

The cryptocurrency exchange, which allows investors to buy, sell, receive and hold digital assets, posted adjusted earnings of $1.04 per share in the fourth quarter, compared with a loss of $2.46 per share in the year-ago period. Analysts had expected the company to earn just 2 cents a share. Total revenue was nearly $954 million, up 41% from the previous quarter and also beating Wall Street’s consensus estimate of $826 million.

Quarterly results were driven by a 64% year-over-year increase in trading revenue, driven by excitement surrounding the approval of the Spot Bitcoin ETF and expectations for improved macroeconomic conditions in 2024. Looking ahead, the company expects first-quarter subscription and services revenue (a segment that includes non-trading activities) to be in the range of $410 million to $480 million, compared to street expectations of $356.2 million. He said it was more than $10,000.

Coinbase also allayed investor concerns about shrinking market share due to increased competition in the crypto trading space from rivals such as Robinhood Markets (HOOD) and Fidelity Investments.

“Frankly, I think concerns about fee compression have been around for years, but we haven’t seen anything like that,” said Anil Gupta, the company’s vice president of investor relations. Stated. The company had trading volume of $154 billion in the fourth quarter, up from $76 billion in the third quarter and beating analysts’ expectations of $142.7 billion.

Since bottoming out in late December 2022, COIN stock has traded within an ascending channel, oscillating between the upper and lower limits of the pattern several times and establishing major support and resistance areas. Most recently, buyers have stepped up their defense of a pullback to the 50-day moving average. It shows that the bullish momentum in the stock is increasing. Note the upper trendline of the channel, currently near $210, amid an earnings-driven price rally. Investors may see this as an area on the chart where they can lock in profits.

Coinbase shares rose 14.3% to $189.29 in extended trading Thursday.

Comments, opinions and analyzes expressed on Investopedia are for informational purposes only. Please read our warranty and disclaimer for more information.

As of the date this article was written, the author did not own any of the securities mentioned above.