Coinbase Global increased cryptocurrency trading following the debut of the first U.S.-listed exchange-traded funds (ETFs) tracking bitcoin in January.
Coinbase Global (COIN.O), which opened a new tab, swung to a first-quarter profit of more than $1 billion from a year earlier loss, aided by an increase in cryptocurrency trading following the debut of the first U.S.-listed exchange-traded funds (ETFs) tracking bitcoin in January.
The firm reported on Thursday a net income of $1.2 billion, or $4.84 per share, for the three months ended March 31, compared to a loss of $79 million, or $0.34 per share, the previous year.
Coinbase shares slid 2.5% in after-hours trading after closing nearly 9% higher.
“Despite a very solid report, the stock traded lower after hours with concerns that trading volumes will decrease based on downward movement in bitcoin,” said Paul Marino, chief revenue officer of investing.
Crypto prices skyrocketed after the US Securities and Exchange Commission approved the debut of a slew of exchange-traded funds (ETFs) linked to the spot price of bitcoin in January, capping a decade-long battle with the industry.
Coinbase is the custodian for several popular bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT.O), which opens a new tab.
In March, investor interest in ETFs drove bitcoin to a new record high above $72,000, reigniting interest in digital assets. Trading volumes at Coinbase totaled $312 billion in the first quarter, up from $145 billion the previous year.
“Keeping our cost structure low while continuing to innovate is really paying off,” CEO Brian Armstrong told analysts during a conference call.
Bitcoin has struggled in recent weeks as investors have adjusted their interest rate predictions.
The US Federal Reserve held its benchmark rate high on Wednesday after tightening monetary policy at an unprecedented rate. It indicated that it is still leaning toward eventually lowering borrowing costs but noted recent poor inflation figures, which could push rate cuts back further.
Higher interest rates have enabled Coinbase to increase its interest income. Coinbase collects interest on reserves from USD Coin (USDC), a stablecoin it manages in collaboration with the cryptocurrency business Circle. USDC, a cryptocurrency token with a very constant price, is backed by dollars and equivalent assets held by banks and other financial organizations.
Coinbase reported interest and finance fee income of $66.7 million in the first quarter.
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