Coinbase has reported impressive financial results for the first quarter of 2024, surpassing market expectations. The company's revenue soared to $1.64 billion, significantly higher than the anticipated $1.34 billion, largely driven by the ongoing Bitcoin rally and the adoption of new accounting standards.
A substantial portion of Coinbase's revenue came from a $650 million mark-to-market gain on digital assets held for investment. The exchange also witnessed a 100% increase in trading fees compared to the previous year, amounting to nearly $1 billion. The surge in user activity was so immense that the platform experienced a temporary crash during the quarter.
Coinbase's stock price also outperformed analysts' estimates, reaching $4.4 per share, more than four times the expected value. The company's success can be attributed to its strategic moves, such as launching its own blockchain, Base, which has become one of the most successful Layer2 networks on Ethereum, handling the majority of transactions with fees often below 1 cent.
Despite ongoing legal challenges with the U.S. Securities and Exchange Commission (SEC) over the alleged sale of unregistered securities, Coinbase continues to thrive, capitalizing on the growing interest in cryptocurrencies and the Layer2 hype.
