Coinbase Q4 Earnings Expected to Surge Amid Crypto Rally, But 2025 Outlook Remains Uncertain
Coinbase (COIN), the leading U.S. cryptocurrency exchange, is set to report its fourth-quarter earnings after the market closes on Thursday, and analysts are optimistic about its performance, thanks to a strong rally in crypto markets during the quarter.
For Q4, analysts expect Coinbase to have generated $1.8 billion in revenue, up from $1.26 billion in the previous quarter, based on data from FactSet. Earnings per share (EPS) are forecasted to have climbed to $1.99 from $0.41 in the third quarter.
More importantly, following the significant crypto market rally triggered by Donald Trump’s presidential election victory, analysts predict that exchange volume for Coinbase soared to $195.9 billion during Q4, up from $185.3 billion in Q3. If accurate, this would mark the strongest quarterly volume since Q4 of 2021.
“We maintain a positive outlook on Coinbase, positioning the company to benefit as the crypto sector enters a new phase,” analysts at Citi wrote in a recent note. The firm maintains a “buy” rating on the stock and recently raised its price target to $350 from $275. Shares of Coinbase were trading at $270 on Tuesday, nearly 90% higher than a year ago. However, Citi’s analysts are projecting Q4 revenue of $1.7 billion, slightly below the consensus estimate of $1.8 billion.
JPMorgan analyst Ken Worthington also acknowledged the November election as a “game-changing catalyst for the crypto ecosystem” but remains neutral on Coinbase shares. He forecasts Q4 revenue of $1.77 billion, again falling short of the $1.8 billion estimate.
2025 Outlook: Uncertainty Looms for Coinbase’s Growth
While the final quarter of 2024 offered a series of favorable catalysts for Coinbase, the outlook for 2025 remains uncertain, as regulatory and policy changes often take time to unfold, according to Wall Street analysts.
“For 2025, we anticipate static crypto prices and more normalized trading volumes, leading to a 6% year-over-year growth in transaction revenue, compared to the consensus estimate of 3% growth,” Citi noted.
The bank further highlighted that Coinbase’s stock is likely to remain a “risk-on” asset, experiencing volatility tied to broader macroeconomic shifts and fluctuations in market sentiment. “The next 1-2 years will be crucial for Coinbase’s business model and its competitive positioning in the broader digital asset space,” Citi analysts stated.
Focus on Revenue Diversification in 2025
A key priority for Coinbase in 2024 has been diversifying its revenue sources, as trading fees still account for 50% of its income. Retail traders, who pay the highest fees, have yet to return to pre-2021 levels, according to research firm Kaiko. The share of total volume coming from retail traders has fallen from 40% in 2021 to just 18%, which has weighed on transaction revenue, Kaiko added.
Citi believes Coinbase can address this issue by leaning further into emerging areas like asset tokenization, Web3 applications, smart contract solutions, and cross-border efficiencies. The exchange could also explore using blockchain for AI governance, among other innovations.
“Coinbase’s future growth will depend on its ability to unlock utility within the crypto space, an area that holds considerable potential but still requires clearer regulatory frameworks,” Citi concluded.
