With cryptocurrencies trading at their highest levels since before the 2022 bear market, the stock of crypto exchange Coinbase Global (NASDAQ:COIN) stock is once again flying high.
In the last six months, COIN stock has risen 125%, outpacing the 95% gain in Bitcoin (BTC-USD) and 78% increase in Ethereum (ETH-USD) over the same period. Coinbase’s user numbers and financial results have surged, boosting their stock. The new Bitcoin ETFs and upcoming Ethereum ETFs have boosted COIN stock, making it a good time to invest.
COIN Stock Profitable Once Again
In mid-February, COIN stock jumped 12% in a single day on news that the company reported its first profit in two years. The biggest crypto exchange in the America, Coinbase reported earnings per share of $1.04 compared to 27 cents that was forecast on Wall Street.
It was the first time the company reported any profit since the fourth quarter of 2021. Coinbase also reported Q4 2023 revenue of $953.80 million, up 58% from $605 million a year earlier, and ahead of expectations for $818.36 million.
On an earnings call, management said that the exchange is benefitting from a resurgence of interest in cryptocurrencies, and the approval of Bitcoin ETFs by the U.S. Securities and Exchange Commission, which has attracted both retail and institutional investors to digital assets.
Revenue from trading activity on its exchange rose 79% in last year’s fourth quarter from the previous third quarter to $493 million. With the SEC expected to approve Ethereum ETFs in late May or early June, the growth at Coinbase looks likely to continue. The company has projected earnings growth this year of 173%.
Worldwide Expansion
With its business in the U.S. humming, Coinbase is now setting its sights on expanding globally. The company has developed a worldwide expansion strategy that it is calling “Go Deep, Go Broad.” The aim is to establish crypto exchanges in foreign jurisdictions, starting with Europe.
Coinbase secured a license to operate in France at the end of December last year. France’s securities regulator has given Coinbase permission to offer its full suite of cryptocurrency products and services within that country.
In Europe, Coinbase has now expanded into Italy and Spain, as well as France over the past year. The company is also targeting the oil money flowing in the Middle East and is currently in discussions with regulators in Abu Dhabi about a potential operating license in that jurisdiction.
The global expansion comes as Coinbase faces increasing regulatory pressure at home in America, as politicians and market regulators continue to threaten legislation meant to oversee and reign in crypto trading, particularly by individual retail investors.
Coinbase is currently involved in litigation with the SEC, which has accused the company of illegally operating by offering cryptocurrency trading and staking services without registering with the agency.
Coinbase is in the process of trying to get the lawsuit dismissed, and has joined forces with smaller crypto exchanges that have also been targeted by the regulator. Analysts say the SEC’s case again Coinbase is going to be harder to prove given that the regulator recently approved Bitcoin ETFs for buying and selling in the U.S.
Buy COIN Stock
Coinbase is soaring as investor enthusiasm for cryptocurrencies continues to grow.
The company’s strong earnings, international expansion, and rising share price have led even the most bearish of analysts to throw in the towel and upgrade the stock.
With Bitcoin ETFs attracting more investors than ever to crypto, and Ethereum ETFs just around the corner, the near-term outlook for Coinbase looks extremely promising. Declining interest rates later this year and continued strength in the economy should add additional tailwinds. COIN stock is a buy.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
