Coinbase stock surges as crypto trading volumes increase profits

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Shares of Coinbase Global (COIN) traded higher on Wednesday after the cryptocurrency trading platform posted better-than-expected profits in the second quarter and higher trading volumes.

However, a somewhat mixed outlook for the three months ending in September, along with the uncertain impact of regulation, limited pre-market gains after an otherwise impressive second quarter.

Coinbase Global earned $ 3.45 per share, well ahead of Street’s consensus forecast of $ 2.33 per share, as volumes rose 38% from the first quarter to $ 462 billion. About a quarter of that was due to bitcoin trading, the company said, but that figure is expected to slow over the summer as market volumes remain high and regulatory changes loom. Net income increased 1,100% from last year to $ 2 billion, Coinbase Global said.

“We don’t try to be too excited that a particular quarter is going up or down. We’re always looking at long-term trends in how people are using this new technology, how the crypto economy is growing and how it is ultimately influencing our mission to create more economic freedom in the world, ”CEO Brian Armstrong told investors on a conference call on Tuesday.

“We’ve always welcomed reasonable regulation in this space. We just want to be treated on an equal footing with all other traditional financial services companies,” Armstrong said. “And I think unlike maybe some traditional tech companies that have waited for something bad to happen and then they reluctantly engage with the government, I think we see it as our role to ” go there proactively before a problem arises, be it educational resource and advise world leaders and finance ministers on how they can adapt their economies to seize the opportunity facing the economy crypto. “

Shares of Coinbase Global rose 4.6% early in the session to change hands to $ 282.15 each. The Nasdaq set a benchmark price of $ 250 per share for Coinbase Global’s listing on April 14, with shares reaching a record high of $ 429.54 each at the start of trading.

At the height of the session, Coinbase, founded in 2012, valued the group at $ 112 billion, slightly less than the venerable 150-year-old Goldman Sachs Group (GS) – Get Report.

Monthly retail transaction users, a key metric to track the platform’s sustainable growth, grew 44% from the first quarter, Coinbase said, and more than 9,000 institutional customers are now using its platform. of cryptography.

“With each passing quarter, Coinbase further strengthens its leadership position relative to crypto and the emerging blockchain opportunity,” said Joseph Vafi, analyst at Canaccord Genuity, who wears a buy rating and a goal. price of $ 325 on the stock.

“In our opinion, the long-term investment considerations for COIN remain attractive – as we believe in the future of cryptocurrencies, the emergence of blockchain clouds / decentralized finance, and ecosystems. whole that are probably emerging around these new markets, ”he added.“ We also remain positive about COIN’s ability to grow its user base at impressive rates and what that means for monetization at- beyond crypto. ”

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