America’s biggest cryptocurrency exchange Coinbase reported a successful final quarter of 2023.
The San Francisco-based company’s Q4 2023 results showed that the company reported a profit of $273.4 million, compared with a loss of $557 million the same quarter one year ago. In Q3 2023, the exchange had reported a loss of $2 million in profit.
Coinbase also makes money from interest earned on its USD Coin (USDC) stablecoin. This product helped the exchange swing to profit because it jumped nearly 18% to $171.6 million.
The exchange said that it had strengthened its balance sheet by reducing debt by $413 million.
“All told, Coinbase is a fundamentally stronger company today than a year ago, and we are in a strong financial position to capitalize on the opportunities ahead,” the company wrote in its letter to shareholders.
The crypto exchange—which went public in 2021—was doing well on the Nasdaq before earnings dropped. And the market is responding strongly to the report, with shares jumping 11% in after-hours trading.
COIN is currently priced above $165 per share and is up 135% over the past 12 months.
Things have improved for the company after a difficult 2022 and 2023 marred by a brutal crypto winter, tough regulatory action, lawsuits and layoffs.
Most notably, Wall Street’s top regulator the Securities and Exchange Commission sued the exchange last year, alleging that it had sold unregistered securities through its staking service. Coinbase is now fighting to dismiss the lawsuit.
Coinbase’s good quarter is down to an improved crypto market. Bitcoin shot up throughout 2023 thanks to a number of high-profile crypto exchange-traded fund (ETF) proposals from Wall Street firms; the subsequent approval of the long-awaited products in January has only helped the price of the asset.
Coinbase provides custody and other services to nearly all the spot Bitcoin issuers—making it an even bigger player in the crypto sphere.
Edited by Andrew Hayward