Coinbase reported revenue of $1.64 billion in the first quarter, beating estimates of $1.34 billion.
The surge in revenue came amid a robust rise in Bitcoin, which has had a major impact on the crypto market.
The company's earnings were $4.40 per share, a significant improvement from the average analyst estimate of $1.09, but differences in accounting methods may affect comparability. This represents a significant rebound from a year-ago loss of $78.9 million, or 34 cents per share.
A significant component of the revenue was $650 million in mark-to-market gains on digital assets held for investment purposes pursuant to new accounting standards adopted by the company.
Transaction revenue, Coinbase's main source of revenue, nearly tripled this quarter to $1.07 billion, and consumer transaction revenue alone doubled year-over-year to $935 million.
Consumer transaction revenue reached $935 million, an increase of more than 100% year over year.
The company's stock price is up about five times as much as it was in 2023, and is up an astonishing 30% this year. This surge is closely tied to Bitcoin's performance, not only impacting trading volume but also driving up demand for additional services offered by Coinbase.
During the quarter, Bitcoin hit a new all-time high, reaching over $73,000 in March. Ethereum, the second largest cryptocurrency, also attracted a lot of attention following a major upgrade earlier this year. The crypto sector is attracting significant institutional investment, especially after the SEC approved several US Spot Bitcoin ETFs, many of which have chosen Coinbase as their custodial partner.
Despite these positive developments, Coinbase faces challenges, including a legal battle with the SEC over allegations of selling unregistered securities, with the claims expected to be decided by a jury trial. Moreover, competition is increasing, especially from Crypto.com, which has regained market share in recent months.
Amid these financial highs, Coinbase has also seen a notable increase in insider selling.
Raymond James analysts say insiders, including four executives, sold $383 million worth of stock during the quarter, a significant increase from the prior period and a significant increase in the company's 2021 This is the largest scale since the company was listed on the Nasdaq.
Co-founder and director Fred Ertham was the biggest seller, cashing out $129 million in stock.
