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Coinbase Sets Ambitious Goals for Revenue Growth and Crypto Adoption

Coinbase aims to accelerate its market cap growth by forming new partnerships and expanding payment support across its product line. The company is also focusing on international expansion, replicating proven strategies in burgeoning markets, and enhancing subscription service revenues through in-store and retail staking initiatives. The outlook for Coinbase One looks promising, particularly in overseas markets.

Boosting Revenue Through Expanded Utility

Coinbase is not just focused on growing revenue but also on driving utility to promote mass adoption of cryptocurrency. The company believes crypto offers more than just trading opportunities; it will play a vital role in the everyday global financial ecosystem. Notably, payments represent a significant area of growth. In the last year alone, crypto stablecoin volume soared to $30 trillion, tripling from the previous year. Coinbase plans to integrate crypto payments across its entire suite of products rapidly.

Establishing Base as a Leading Platform

Coinbase is committed to positioning Base as the top chain for startups and large enterprises. Efforts will continue to lower transaction fees on Base, facilitating better access for developers. The Coinbase Developer Platform (CDP) aims to provide the necessary tools for companies to build applications on the chain, enabling thousands of businesses to integrate seamlessly with the platform.

Future Plans and Legislative Support

Looking ahead to 2025, Coinbase’s strategy emphasizes scaling its foundational services. The company has a strong policy team focused on advancing key crypto legislation and hopes to grow its advocacy base to 4 million by the 2026 midterms. Furthermore, Coinbase plans to fund initiatives supporting pro-crypto candidates and believes its efforts will expand beyond the United States.

Back-End Support and Market Opportunities

As transaction volumes in crypto reach new heights, Coinbase will revisit its back-end systems to ensure robust support for both its products and third-party operations. This comprehensive approach positions the company well for future growth as it aims to assert its influence in the evolving crypto landscape.

Economic Transition on the Horizon

In conclusion, Coinbase’s leadership emphasizes a significant upcoming phase in the crypto market. The potential for updating the global financial system presents remarkable opportunities. With regulatory environments improving and governments taking supportive actions, the company is gearing up for a productive 2025.

Alesia Haas — Chief Financial Officer

Thank you, Brian, and good afternoon, everyone. As Brian highlighted, the fourth quarter was strong for Coinbase as we concluded a successful year. We met our financial priorities: diversifying revenue, achieving positive adjusted EBITDA, and maintaining operational discipline while investing strategically to meet our business objectives. Let’s take a closer look at the results.

Market Overview and Impressive Growth Figures

The crypto market experienced growth following the U.S. elections, which led to the election of a pro-crypto Congress and President. During the fourth quarter, the average crypto market cap increased by 33%, accompanied by a 27% rise in asset volatility. In this environment, total trading volume surged to $439 billion, reflecting a 137% increase. Consumer trading volume reached $94 billion, a remarkable 176% growth, outperforming the U.S. spot market by 50%.

New Assets and Customer Engagement

Coinbase reached an all-time high in consumer transaction revenue, totaling $1.3 billion—a 179% increase. The company listed 13 new assets, including popular memecoins like PEPE and WIF. Additionally, improvements in the trading experience contributed to a 24% rise in monthly transacting users, bringing the total to 9.7 million. Nearly half of our trading customers were either new to Coinbase or returned after being inactive for over a year.

Institutional and Subscription Revenue Growth

Institutional trading volume also posted strong figures, reaching $345 billion, a 128% increase. In the fourth quarter, our prime product suite reported all-time high loan balances, driven by favorable market conditions. Subscription and services revenue reached $641 million, a 15% rise attributed to higher asset prices and USDC market cap growth, offset by a decline in stablecoin revenue due to interest rate impacts.

Operational Expenses and Future Prospects

Total operating expenses for Q4 rose to $1.2 billion, up 19%, largely due to increased transaction activity. Growth in technology, administration, and marketing expenses was driven by elevated performance marketing spending and higher rewards for USDC. Coinbase remains committed to strategic growth while managing expenses effectively.

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Coinbase Reports Strong Q4 Earnings Amid Crypto Market Volatility

Coinbase has shared its financial performance for the fourth quarter, revealing solid results and an optimistic outlook for the upcoming period.

Financial Highlights from Q4

In the fourth quarter, Coinbase reported an adjusted EBITDA of $1.3 billion, with net income matching this figure at $1.3 billion as well. Notably, net income received a boost from $476 million in pre-tax gains related to its crypto asset investment portfolio, with most of this gain being unrealized.

After accounting for taxes, the net gain amounted to $357 million. By the end of the quarter, Coinbase’s USD resources reached $9.3 billion, showcasing a robust balance sheet that provides the flexibility for business investments, acquisitions, and capital structure adjustments through share or debt repurchases. The company emphasized that building a strong balance sheet offers maximum opportunities to capitalize on emerging prospects.

Disclosure Changes Following SEC Bulletin

This quarter, Coinbase made a significant disclosure change following the SEC’s release of Staff Accounting Bulletin 122 in January. This bulletin revoked the prior requirement under SAB 121, mandating the recording of customer crypto assets and liabilities on the balance sheet. Coinbase has adopted SAB 122, and as a result, it is no longer reporting safeguarded customer assets and liabilities. Instead, the company has restored ‘assets on platform’ as a key business metric, indicating the total crypto and USDC assets securely held on behalf of customers. As of December 31st, Coinbase reported having $404 billion in total assets on platform, accounting for approximately 12% of the total crypto market cap.

This metric can be found in an audited footnote within Coinbase’s 10-K filing.

Positive Outlook for Q1

Looking ahead to Q1, Coinbase has seen a strong start, generating around $750 million in transaction revenue year to date. The company anticipates that subscription and services revenue will grow sequentially, forecasting a range of $685 million to $765 million. This growth is expected to be driven by increased stablecoin revenue, a rise in Coinbase One subscribers, and higher average prices for crypto assets observed so far this quarter.

In terms of expenses, Coinbase expects technology and development, along with general and administrative costs, to fall between $750 million to $800 million. Sales and marketing expenses are projected to range from $235 million to $375 million, contingent on continued performance marketing opportunities and USDC product balances.

Impact of Market Volatility

During the Q&A session, Vice President of Investor Relations, Anil Gupta, inquired about the impact of a liquidation event in early February on Coinbase users. CFO Alesia Haas responded by noting that price volatility is normal in the crypto market. She explained that the price fluctuations in February were typical and that retail users often hold their investments long-term, which limited any negative effect on the platform.

Potential Growth Drivers

When asked about promising growth factors, CEO Brian Armstrong highlighted that Coinbase operates as a multi-product business, with diverse revenue streams. He expressed enthusiasm about the utility of cryptocurrencies moving beyond just an asset class, with various applications powering usage across multiple platforms. Armstrong also emphasized the importance of international expansion and opportunities for mergers and acquisitions in the pipeline.

Future Regulatory Opportunities

The regulatory landscape is evolving, opening up new possibilities. Armstrong noted that improved access to decision-makers in government has been a significant change, allowing for clearer rules and potential approval for innovations like perpetual futures trading in the U.S., which has lagged behind global markets.

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Coinbase: Navigating New Waters in Crypto Trading and Market Share Growth

As financial regulations evolve, Coinbase is seizing the opportunity to expand its trading services, particularly in tokenized securities. This shift allows for continuous trading, even for those who traditionally lack access to these markets.

Tokenized securities, which enable trading of fractions of shares and real-time clearing and settlement, simplify the trading experience. This is seen as a crucial step in modernizing the financial system through cryptocurrency. The potential for growth in this area is substantial, promising convenience to users and facilitating market participation around the clock.

The rise of prediction markets reflects growing skepticism towards traditional institutions, especially in media. People seek new avenues for determining the truth, and prediction markets could offer insights that extend beyond politics, capturing various global trends.

Looking ahead to 2025, existing partnerships between traditional financial institutions and tech firms are on the rise, facilitated by favorable regulatory conditions. The revival of mergers and acquisitions in the U.S. hints at fresh opportunities for growth, with a promising array of companies available for acquisition.

Anil Gupta — Vice President, Investor Relations

Thank you. Sarah, let’s proceed with our first question from the line.

Questions & Answers:

Operator

Thank you. Your first question comes from Owen Lau with Oppenheimer. Your line is open.

Owen Lau — Analyst

Good evening, and thank you for taking my questions. Congratulations on a strong quarter! I noticed that during December and January, your market shares for U.S. spot crypto began to rise. Given the many low-cost options like FTX and recent spot ETFs, how does Coinbase plan to sustain this share growth throughout the market cycle? What differentiates Coinbase from its competitors? Thanks.

Brian Armstrong — Co-Founder and Chief Executive Officer

Thanks for the recognition! We’re proud to report that we achieved record U.S. spot and global derivatives market shares in Q4.

With the continued rise of crypto, we see many companies adopting it, which benefits the entire market. For us at Coinbase, we aim not just to expand on our platform but also to support crypto integration worldwide through our developer platform. Our growth reflects the trust users place in Coinbase and underscores our commitment to expanding the market together.

Alesia Haas — Chief Financial Officer

Owen, to add further, we’ve witnessed a robust start to Q1. Ongoing improvements in user experience and platform stability, along with effective marketing, should continue to enhance our market share over time. While fluctuations may occur, our long-term goal remains to attract and retain more users.

Operator

The next question comes from Devin Ryan of Citizens JMP. Your line is open.

Devin Ryan — Analyst

Thanks, Brian and Alesia. I’d like to discuss international derivatives growth, which seems significant. Given that fees are lower, do you anticipate your take rates will stabilize, or could there be room for increases as you mature in this market?

Alesia Haas — Chief Financial Officer

For now, our primary focus is on enhancing liquidity and trading volume. We are offering incentives to market participants to deepen liquidity on our platforms. Over time, we expect our fees to evolve to reflect our market position, but we are currently not emphasizing peak monetization. Our approach remains competitive within the market’s pricing structure.

Operator

The next question comes from Benjamin Budish with Barclays Capital. Your line is open.

Benjamin Budish — Analyst

Hi, good evening, and thanks for taking my question. Could you share insights on the activity trends among new and returning Coinbase customers? Are you attracting significant investments from newcomers, or is existing customer engagement driving current trading volumes? Additionally, how does the Coinbase One subscription perform in attracting new traders?

Alesia Haas — Chief Financial Officer

I’ll begin, and Brian may want to add. While we don’t disclose specific customer cohort details, new users typically join to purchase newly listed coins or as first-time crypto users, often starting with Bitcoin or Ethereum. The effectiveness of our marketing initiative plays a key role in our user acquisition, showing promising returns within a year.

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Coinbase’s Strategy: Engaging Users and Navigating Regulatory Changes

Coinbase is witnessing a rise in reengaged users, particularly during times of market volatility. These individuals, previously described as “hodlers,” tend to return to the platform when crypto prices rise or generate news headlines. Historically, this trend has shown that users become more active during significant market fluctuations.

To enhance user experience, Coinbase has expanded its Coinbase One product internationally. This growth is driven by making Coinbase One more appealing worldwide, offering various new benefits for users. Typically, these subscribers are active traders, participating every month due to the advantages of a structured fee system.

Brian Armstrong — Co-Founder and Chief Executive Officer

During discussions, Armstrong noted that even casual crypto holders tend to check their accounts when prices increase. Each visit presents an opportunity to introduce users to additional services, like obtaining loans on Bitcoin or earning rewards through staking. Such offerings are part of a broader strategy to keep users engaged every time they log in.

Operator

In a follow-up, Ken Worthington from J.P. Morgan asked about the current regulatory environment under the new administration.

Ken Worthington — Analyst

With recent changes, such as the repeal of SAB 121, Worthington inquired about essential Congressional actions for promoting a constructive crypto market.

Brian Armstrong — Co-Founder and Chief Executive Officer

Armstrong highlighted the importance of passing legislation related to market structure, specifically token classification. This crucial clarification regarding whether digital assets are classified as commodities, securities, or currencies could catalyze significant capital investments in crypto.

Another major concern is the establishment of a regulatory framework for stablecoins. Armstrong advocates for legislation that would enable dollar-backed stablecoins to be issued in the U.S., alongside allowing state-based issuance without requiring a banking license, provided there are assurances of full reserves.

Armstrong also expressed a desire for a strategic Bitcoin reserve and safeguarding equitable access to banking, emphasizing a need for legislative protections for users to self-custody their assets.

Paul Grewal — Chief Legal Officer

Grewal emphasized the necessity of a functional bill of rights for cryptocurrency users. He acknowledged that the recent executive order lays the groundwork for protecting lawful blockchain activities and supporting stablecoins.

As seen with the crypto task force’s efforts under the SEC, there is optimism about providing clearer guidance to crypto developers. Grewal noted that Commissioner Peirce is poised to offer essential insights into the regulatory process in the coming months.

Operator

The conversation continued with Peter Christiansen from Citi, asking about Coinbase’s consumer acquisition strategy.

Peter Christiansen — Analyst

Christiansen asked how Coinbase builds its value proposition for crypto users in a competitive market filled with traditional finance options.

Brian Armstrong — Co-Founder and Chief Executive Officer

Armstrong responded by emphasizing Coinbase’s reputation as a trusted name in the industry. Its long-standing commitment to crypto attracts curious newcomers. The company employs traditional marketing techniques and effective referral programs that aim for a quick return on investment.

As users begin their journey with Coinbase, they often start with basic trading before exploring other services like payments, lending, and even corporate use for managing finances. Currently, cryptocurrency only represents about 1% of the global GDP; however, Armstrong believes that this figure could grow significantly over the next decade. This potential underscores Coinbase’s goal of evolving into a primary financial account for users navigating the changing economic landscape.

While this conversation provides insights into Coinbase’s strategies and the evolving regulatory landscape, it also illustrates the broader context of how digital currencies continue to shape modern finance.

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Coinbase’s Future: Embracing Change in the Crypto Landscape

Emilie Choi — President and Chief Operating Officer

At Coinbase, we recognize a diverse range of competitors, from crypto-native companies to traditional finance (TradFi) institutions. We take pride in our focus on regulatory compliance, security, and user experience. Brian, our CEO, understood early on that being a crypto-native firm is crucial—similar to how digital natives like Amazon outperformed traditional retail companies that merely added digital features.

Our unique position allows us to cater to a wide range of users, from those curious about Bitcoin to others exploring crypto staking or other native features. We provide essential tools like Base, Wallet, and USDC, which strengthen our competitive edge over time.

Operator

The next question is from Patrick Moley of Piper Sandler. Your line is open.

Patrick Moley — Analyst

Good evening and thank you for taking my question. Brian, a few weeks ago, you noted on X that Coinbase needs to rethink how it lists tokens given the increasing numbers, many of which are meme-related. Could you elaborate on your thoughts regarding the future of your listed token offerings?

Brian Armstrong — Co-Founder and Chief Executive Officer

Thank you for highlighting that. The crypto industry is experiencing significant growth, with more tokens emerging daily—about a million per week, many of which may lack quality. This surge reflects the varied use cases for cryptocurrency, similar to the early Internet days when all major websites could fit into a single directory.

As the crypto space expands, we at Coinbase must integrate decentralized exchanges into our offerings. For customers, the distinction between centralized and decentralized exchanges should be seamless. They want to easily find and trade assets while also being protected through clear disclosures regarding the authenticity of those assets. Achieving that balance is essential.

Operator

The next question comes from John Todaro with Needham. Your line is open.

John Todaro — Analyst

Thank you for the opportunity, and congratulations on a great quarter. Brian, can you share your broader vision for Coinbase, aiming to evolve beyond just a crypto brokerage? What are your thoughts on stablecoins and tokenizing real-world assets?

Brian Armstrong — Co-Founder and Chief Executive Officer

Absolutely, that’s the direction we’re heading. Initially, crypto was viewed primarily as a tradeable asset class. However, it has evolved to encompass much more. Last year, stablecoin transactions reached about $30 trillion—three times the previous year—and this could become a significant part of global GDP.

We foresee a future where real-world assets, such as real estate and debt, are tokenized on the blockchain, streamlining value transfers with real-time settlement capabilities. Our intent is to build trustworthy and user-friendly products, which differentiates Coinbase in the market. Surveys show a strong trust in our brand due to our compliance and customer support history.

This year, we’ve actively pursued partnerships with companies like Stripe and Yellow Card to promote global adoption of stablecoins. We’ve introduced new trading pairs on our platform and incentivized USDC holdings—essentially creating a more rewarding banking experience for our customers. Our goal is to eventually serve as a main financial account for many users worldwide, encompassing elements of brokerage, banking, and payments along the way—a promising and exciting journey ahead.

Operator

The next question comes from Dan Dolev…

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Coinbase Leadership Discusses Future Insights with Analysts

Dan Dolev — Analyst

Hey, team, congratulations on the strong results. I wanted to ask about global contracts. Your competitor mentioned a significant market within political and other forms of betting. Do you see Coinbase being utilized as a platform for similar global endeavors? Thank you.

Brian Armstrong — Co-Founder and Chief Executive Officer

You’re mentioning prediction markets, and while we don’t have any announcements to make today, I find these markets very intriguing. This recent election served as a wake-up call regarding their potential. Some of the top downloaded apps were prediction markets, which successfully forecasted the election outcome well before traditional sources got it wrong. This highlights a critical issue in today’s society — how to discern what is true amid rising misinformation and bias.

The beauty of prediction markets is that they encourage participants to have real stakes in outcomes. I believe they can serve as a more reliable source of truth than many conventional media outlets, particularly as trust in these institutions dwindles. This could be another area where cryptocurrency presents a fascinating solution that we are eager to explore in the future.

Emilie Choi — President and Chief Operating Officer

At Coinbase, we’re not always the first to launch groundbreaking products, and we are fine with that. We observe international markets that are less regulated. Once we see what resonates there, we adapt those ideas here, especially given our favorable regulatory environment. This approach is why we’ve invested heavily in Coinbase Ventures — to plant multiple seeds and later cultivate the most promising opportunities through buying, building, or partnering.

Operator

The next question comes from Bo Pei of U.S. Tiger Securities. Your line is open.

Bo Pei — Analyst

Thanks for taking my questions, and congratulations on your robust performance. I have two inquiries. First, regarding retail trading fee rates: Historically, these rates have dropped during periods of increased trading volume. Yet, this quarter, while trading volume nearly tripled, the retail fee rate actually saw a slight sequential increase. Can you elaborate on this trend? Was it mostly due to growth in derivatives revenue, stablecoin trading fees, or other factors?

Alesia Haas — Chief Financial Officer

Bo, this quarter, we experienced significant growth in both simple and advanced trading. There wasn’t any substantial contribution from either type, which is why the fee rate remained relatively stable from the previous quarter. The growth occurred across the board.

Bo Pei — Analyst

Great, thank you. My second question relates to competition. An online trading platform recently reported a 400% year-over-year increase in crypto trading volume. How do you perceive the competitive landscape in this situation, especially regarding peers that provide a broader range of trading products beyond crypto?

Brian Armstrong — Co-Founder and Chief Executive Officer

This is Brian. We encourage everyone to enter the crypto space. Our goal is to modernize the global financial system and drive a larger portion of global GDP through cryptocurrency. This, we believe, fosters a fair and efficient world, promoting economic freedom.

We envision a future where every bank, payment provider, and brokerage integrates crypto into their offerings. Coinbase aims to be the most trusted financial counterparty while also facilitating these transitions for others. We’re not overly concerned about the competitive environment; we prioritize addressing our customers’ needs through direct engagement, rather than fixating on competitors. The entrance of new companies into the crypto arena ultimately expands the Total Addressable Market (TAM) for Coinbase.

Emilie Choi — President and Chief Operating Officer

Our experience as a crypto-native company gives us a significant competitive edge. We welcome new entrants to the space, believing it promotes overall industry growth. The validation of the market through traditional finance (TradFi) competitors benefits everyone. As Brian mentioned at the IPO roadshow, we have our unique strategies while also looking at how we can differentiate ourselves.

Brian Armstrong — Co-Founder and Chief Executive Officer

In regard to trading products, we’ve discussed the tokenization of traditional securities or real-world assets. It seems inevitable that various categories within the financial system will be tokenized and placed on-chain. We’re dedicated to enhancing the on-chain economy and inclusion of broader financial assets.

Anil Gupta — Vice President, Investor Relations

Sarah, we will take one more question.

Operator

Thank you. Our final question comes from Alex Markgraff of KBCM. Your line is open.

Alex Markgraff — Analyst

Thanks. I will try to include two questions if I can. First off, regarding the sales and marketing outlook, I’ve noted the wider-than-usual range. Is this a new forecasting approach for that line, or…

Coinbase’s Future: Insights from the Latest Earnings Call

Market Conditions Influence Outlook

Alesia Haas — Chief Financial Officer

Alesia Haas explained that the company’s current outlook is largely shaped by market conditions. Following the election, they’ve noticed expanded opportunities for deploying marketing resources. However, fluctuations have occurred weekly over the past eight weeks, leading them to anticipate potential volatility in the upcoming six weeks of the quarter.

Haas emphasized the importance of remaining flexible. The outlook aims to avoid any restrictions, allowing the company to capitalize on opportunities to acquire new customers as they arise.

Expanding Beyond Crypto: Corporations Using On-Chain Solutions

Brian Armstrong — Co-Founder and Chief Executive Officer

Brian Armstrong discussed the current landscape for companies embracing on-chain solutions, noting that early adopters are primarily startups. These companies are exploring innovative applications, including AI and payouts. However, Armstrong also emphasized the growing interest from larger, non-crypto native corporations.

He envisions that Fortune 500 companies will first turn to cryptocurrencies for traditional financial benefits, like managing treasuries and mitigating inflation risks by holding a portion of their assets in Bitcoin, which could eventually become a best practice.

Additionally, firms might evaluate their B2B payment fees and explore more efficient payment methods, such as cross-border transactions, where cryptocurrency solutions could excel.

As time progresses, Armstrong anticipates further integration into large companies, where rewards programs might be issued on-chain or early users of digital platforms might receive governance rights. This shift could transform how companies engage with their customers and leverage their digital assets.

Closing Remarks

Anil Gupta — Vice President, Investor Relations

Anil Gupta concluded the call, thanking participants and expressing anticipation for the next quarter’s conversation.

Operator

[Operator signoff]

Duration: 0 minutes

Call Participants:

Anil Gupta — Vice President, Investor Relations

Brian Armstrong — Co-Founder and Chief Executive Officer

Alesia Haas — Chief Financial Officer

Owen Lau — Analyst

Devin Ryan — Analyst

Benjamin Budish — Analyst

Ken Worthington — Analyst

Paul Grewal — Chief Legal Officer

Peter Christiansen — Analyst

Emilie Choi — President and Chief Operating Officer

Patrick Moley — Analyst

John Todaro — Analyst

Dan Dolev — Analyst

Bo Pei — Analyst

Alex Markgraff — Analyst

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