Coinbase (COIN) stock fell to $295.18 per share in premarket trading on Friday despite a stronger-than-expected earnings report. However, analysts believe the stock’s muted reaction may be due to investors missing the bigger picture.
The crypto exchange reported its highest transaction revenue since 2021, with $1.55 billion generated in the fourth quarter. Retail and institutional trading volumes also reached three-year highs of $94 billion and $345 billion, respectively.
Coinbase executives expressed optimism about the Trump administration’s support for cryptocurrency regulations, citing potential benefits such as stablecoin legislation and market structure reforms. CEO Brian Armstrong stated that a pro-crypto Congress is leading the charge on these issues, which could drive growth in the industry.
Analysts from Jefferies and JPMorgan also praised Coinbase’s performance, with Jefferies predicting a “sea change” in regulatory certainty and JPMorgan expecting revenue to double by 2025. Despite some volatility in the near term, analysts remain bullish on Coinbase’s potential for long-term growth.
The stock’s guidance for the first quarter has been mixed, but analysts believe this may be due to increased marketing spending rather than a decline in profit margins. As one analyst noted, the post-election surge in crypto asset prices and retail trading volume suggests that another strong quarter is possible.
Source: https://finance.yahoo.com/news/coinbase-earnings-get-boost-from-the-trump-sea-change-what-wall-street-is-saying-111505550.html