Cryptocurrency exchange Coinbase $COIN ended the fourth quarter of 2024 with record profits, significantly surpassing analysts' expectations. According to data compiled by LSEG, the company earned $4.68 per share in the last three months of the year — more than double the forecasted $1.81.

The primary drivers of growth were:

- Increased trading volumes of Bitcoin and other digital assets.

- A sharp spike in interest in cryptocurrencies following the U.S. election, including Donald Trump's victory.

Bitcoin notably reached the historic milestone of $100,000 during the quarter, marking a significant moment for the digital asset market.

U.S. Policy on the Eve of the 'Crypto Era'

Donald Trump's victory in the presidential election brought significant changes in the U.S. attitude towards the cryptocurrency industry. Trump pledged to turn the country into the “crypto capital of the planet”, providing clear and friendly regulations for digital assets.

The appointment of Paul Atkins, known for his pro-cryptocurrency views, as the head of the Securities and Exchange Commission (SEC) contrasted sharply with the approach of his predecessor Gary Gensler, who actively criticized the industry and compared it to the “Wild West.”

More optimistic sentiments regarding legislation strengthened confidence in cryptocurrencies and spurred American investors toward new investments.

Coinbase's Financial Performance Development

Impressive results in the fourth quarter stemmed not only from increased trading volumes but also from successful investment decisions. Key metrics include:

1. Total Revenue for the quarter jumped to $2.3 billion, significantly exceeding the previous year’s figure ($953.8 million).

2. Transaction Revenues surged by 172% to $1.6 billion, primarily driven by heightened trading activity.

3. Subscription and Services Revenue, unrelated to trading, reached $641 million, up by 15%.

These results strengthened Coinbase's financial stability. For example, pre-tax income from crypto investments amounted to $476 million, contributing to the company's positive balance.

Competition in the Cryptocurrency Trading Market

Despite Coinbase's incredible success, competition in the market is intensifying. Potential challenges include the rapid development of other platforms like Robinhood $HOOD, attracting users with its flexibility and convenience in trading digital currencies.

Conclusion

The fourth quarter of 2024 marked a turning point for the cryptocurrency sector and for Coinbase in particular. Donald Trump's victory and the associated hope for more transparent and favorable regulatory measures served as a catalyst for increased interest in digital assets. As we move into 2025, the cryptocurrency market continues to demonstrate high dynamics, but companies like Coinbase must be prepared for increasing competition and a volatile economic environment.