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Coinbase exceeded analysts’ expectations in its first-quarter earnings report, reporting a net income of $1.18 billion, or $4.40 per share, compared to a year-ago loss of $78.9 million. The company’s revenue of $1.64 billion also surpassed the expected $1.34 billion. Profit in the quarter included a $650 million mark-to-market gain on crypto assets. Consumer transaction revenue was $935 million, more than 100% higher than the previous year, while total transaction revenue nearly tripled to $1.07 billion. Subscription and services revenue brought in $511 million for the quarter.

Coinbase shares climbed almost 9% ahead of the earnings report and have risen 32% this year, following a fivefold increase in 2023. The stock typically benefits from increases in bitcoin prices, which lead to higher trading volumes and demand for other services. During the first quarter, bitcoin hit a new all-time high above $73,000, and ethereum saw its first major upgrade in over a year. The approval of new U.S. spot bitcoin exchange-traded funds by the SEC has also brought in over $50 billion in cumulative net inflows since the first quarter.

However, there are challenges facing Coinbase, including a legal battle with the SEC over allegations of unregistered sales of securities. Competition from platforms like has also intensified in recent months, potentially affecting market share. Insider selling at Coinbase has increased, with multiple executives including co-founder Fred Ehrsam collectively selling $383 million of shares during the first quarter. This was more than double the amount sold in the previous quarter and the largest amount of insider selling since the company’s listing on the Nasdaq in 2021.

Despite the regulatory challenges and competition, Coinbase’s performance in the first quarter exceeded expectations, driven by strong transaction revenue and a significant increase in net income. The company’s success is closely tied to the performance of cryptocurrencies like bitcoin and ethereum, which have experienced significant price fluctuations during the quarter. Moving forward, Coinbase will need to navigate regulatory uncertainties, increasing competition, and potential market volatility while maintaining its position as a leading marketplace for digital token transactions in the U.S.

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