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Coinbase Sees 37% Surge as Bitcoin Rallies and Analysts Forecast Strong Q4 Results

Coinbase’s stock has seen a rise ahead of its fourth-quarter earnings announcement on Thursday, with analysts predicting strong trading volumes for the quarter. Coinbase’s stock has increased by 37% over the past week, alongside a recent Bitcoin surge, as analysts anticipate robust figures to be reported by the company on Thursday. According to data from MarketWatch and FactSet, there is a consensus among analysts for a strong revenue increase for Coinbase in the fourth quarter, estimated to have risen by about 22% from the third quarter to $825 million.

The revenue boost is expected to come from strong trading volumes, with analysts estimating nearly a doubling from $76 billion in the third quarter to $142.7 billion in the fourth quarter. Estimates also suggest Coinbase will report a fourth-quarter earnings per share of $0.02, contrasting with a previously reported loss of $0.01 per share in the third quarter. According to Coinmarketcap, Bitcoin’s price has increased by 16.3% in the past seven days. On February 13th, competitor trading platform Robinhood reported an overall revenue increase for the fourth quarter, also driven by a surge in cryptocurrency trading revenues.

Robinhood’s fourth-quarter revenue increased by 24% year-over-year, supported by $43 million in cryptocurrency trading revenue, which saw a 10% year-over-year increase. However, not everyone is convinced that Coinbase can maintain its momentum into 2024. In a note to investors dated January 22, JP Morgan analysts predicted a stock price decline for Coinbase in 2024, linking their expectations to a lackluster start for Bitcoin ETF trading observations.

Despite initial issues with Bitcoin ETFs, which saw nearly $6 billion flow into the newly converted Grayscale GBTC fund between January 11 and February 2, net inflows have significantly increased in recent days. On February 13, BlackRock’s IBIT generated $493 million in inflows, while all 10 ETFs saw a total of $631 million in net inflows for the day. Coinbase acts as the custodian for eight of the ten Bitcoin ETF providers, including BlackRock, iShares, and Valkyrie.

Another key issue for Coinbase is its ongoing lawsuit with the United States Securities and Exchange Commission (SEC). Cryptocurrency attorney James Murphy, known as MetaLawMan on X, told CoinTelegraph magazine he is confident the SEC will lose its case against Coinbase, arguing that the SEC has overreached in trying to prove that tokens on the secondary market are investment contracts, which he believes is not the case. Coinbase was sued by the SEC in June 2023, accusing the cryptocurrency exchange of violating its rules and selling unregistered securities.

Currently, Coinbase’s stock has increased by 14% in a day, reflecting a broader uptick in publicly traded cryptocurrency companies, coinciding with Bitcoin’s rise above $50,000 on February 13.

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