Coinbase Set for Strong Q4 Earnings as Crypto Market Surges, But 2025 Remains Uncertain

Coinbase (COIN), one of the leading cryptocurrency exchanges in the U.S., is poised to report solid fourth-quarter earnings after the market closes on Thursday. Wall Street analysts are optimistic, anticipating a notable increase in earnings driven by a bullish crypto market in the final quarter of 2024.

Analysts project Coinbase’s Q4 revenue to reach $1.8 billion, a significant rise from the $1.26 billion reported in Q3. Earnings per share (EPS) are expected to jump to $1.99, up from $0.41 in the previous quarter.

More importantly, the exchange is likely to see a substantial increase in trading volume due to a crypto rally following Donald Trump’s election victory. Analysts predict Q4 trading volume will hit $195.9 billion, an increase from $185.3 billion in Q3, marking the highest quarterly volume since Q4 2021.

“We remain bullish on Coinbase, as the company is well-positioned to benefit as the crypto market transitions into a new era,” analysts at Citi wrote in a note. Citi has maintained a “buy” rating on the stock, increasing its price target to $350 from $275. Shares of Coinbase were trading at $270 on Tuesday, up nearly 90% from a year ago. However, Citi’s analysts are forecasting Q4 revenue of $1.7 billion, slightly below the $1.8 billion consensus estimate.

JPMorgan analyst Ken Worthington also views the November election as a pivotal event for the crypto market but remains neutral on Coinbase’s stock. He expects Q4 revenue to come in at $1.77 billion, missing the $1.8 billion estimate.

Looking Ahead to 2025: A Year of Uncertainty for Coinbase

While Q4 2024 was buoyed by multiple crypto catalysts, predicting Coinbase’s performance in 2025 remains difficult, as policy changes often take time to impact the market, according to analysts.

“For 2025, we expect stable crypto prices and more normalized volumes, which should lead to transaction revenue growth of 6% year-over-year, compared to the consensus growth estimate of 3%,” Citi analysts noted.

Despite this, Citi warns that Coinbase’s stock could remain volatile, driven by broader macroeconomic trends and shifts in market sentiment. “The next 1-2 years will be critical for Coinbase’s business strategy, as well as for the evolution of the broader digital asset ecosystem,” Citi added.

Revenue Diversification Remains a Key Focus for Coinbase

Coinbase has focused on diversifying its revenue streams in recent years, as its reliance on trading fees remains significant, accounting for approximately 50% of total revenue. However, according to research from Kaiko, retail trading—historically the biggest driver of higher-fee transactions—has not fully recovered to 2021 levels. The proportion of trading volume from retail investors has dropped to just 18%, down from 40% in 2021, which has affected transaction revenues.

Citi suggests that Coinbase could mitigate this by focusing on the tokenization of assets, expanding into Web3 applications, and further developing its smart contract capabilities. The exchange could also explore using blockchain for cross-border transactions and AI governance, which would diversify its revenue base.

“Coinbase’s future growth will depend on its ability to harness the utility of blockchain technology, an area that holds vast potential but requires clearer regulatory guidelines,” Citi concluded.

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