To The Moon

🌟🌟🌟$Coinbase Global, Inc.(COIN)$  reported better than expected Q1 24 earnings boosted by rising cryto prices and a new accounting standard that allows companies holding crypto to recognise losses and gains immediately.

Coinbase earned USD 1.2 billion or USD 4.40 per share in Q1 24 versus USD 79 million loss a year earlier.  Its quarterly revenue rose 53% to USD 1.64 billion from USD 773 million a year ago.  This is higher than Analysts expectations of USD 1.15 per share on revenue of USD 1.36 billion according to FactSet. 

Coinbase said its net income was boosted by USD 737 million in pre tax crypto asset mark to market gains, which were mostly unrealised. 

However Coinbase is down 3% in after hours trading.  It is still well below the USD 381 at which it opened trading in 2021 after its market debut. 

Coinbase said that it generated over USD 300 million on total transaction revenue in April even though falling Bitcoin prices recently threaten to unwind a boom in crypto trading.  Bitcoin is currently trading at USD 63,258.40, just up 0.55% from yesterday. However Bitcoin has risen 43% year todate.   In March Bitcoin reached a record high above USD 73,000.

Total trading volume of Coinbase is more than doubled to USD 312 billion in Q1 24 from USD 145 billion a year earlier.  Bitcoin climbed to a record high during the quarter, driving increasing trading activities that lifted transaction revenue to USD 1.1 billion.  This is almost 3 times from USD 375 million from a year earlier. 

Coinbase, which historically relied on transaction fees it earns from investors is now increasingly earning money from its custodian services, interest earnings assets and staking.  In Q1 24 Coinbase earned USD 511 million from subscriptions and services, up from USD 362 million a year earlier.

Coinbase is the market leader for its custodian services as it helps store the assets under management in 8 out of 11 Spot Bitcoin ETFs. 

Is Coinbase a Buy now? 

Performance wise, Coinbase is down 2.8% for the week but it is still up 42% year todate. In 2023 Coinbase has skyrocketed 353%.

Wall Street Analysts are Bullish on Coinbase with a Buy rating, Target price of USD 229.14, an upside potential of 2.6%.

Bitcoin Halving Event happened on April 20.  This means that the  rewards for mining  Bitcoin have halved.   The big difference between the previous 3 Bitcoin Halving Events and the latest Halving Event is the approval of Spot Bitcoin ETFs by the SEC.  

Spot Bitcoin ETFs have been very popular especially with small investors.  Since their approval in January, Spot Bitcoin ETFs Assets Under Management is now USD 55 million with Blackrock $iShares Bitcoin Trust(IBIT)$ the largest ETF.  Since then$iShares Bitcoin Trust(IBIT)$ has accumulated more than USD 16.5 million in Assets, one of the Fastest ETFs growth. 

I believe that Coinbase is an attractive Buy due to its extensive role it plays in all things crypto.  With the approval of Spot Ethereum ETFs which may happen later this year, Coinbase will continue its upward trajectory in the future. 

Bitcoin is here to stay and Analysts are bullish on Bitcoin with the possibility of hitting another All Time high especially with the expectations that the Feds will cut interest rates in 2024.

Patience and Time in the markets are required to allow Coinbase to grow exponentially in the future. 

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