Coinbase surpasses expectations with $605 million net revenue

Leading cryptocurrency exchange Coinbase revealed fourth-quarter results came in hotter than expected, exceeding Wall Street forecasts.

Coinbase released its quarterly financial report after Tuesday’s market close. Net sales came in at $605 million, exceeding the $589 million estimated by analysts.

Despite a 5% increase in net revenue over the prior quarter, transaction revenue, which accounted for $322 million of the total, declined 12%. The majority of the exchange’s revenue in Q4 came through a 34% growth in Coinbase’s subscription revenue.

Interest revenue from USDC increased a whopping 79% quarter-on-quarter, reaching $182 million – a robust increase. Coinbase said this is due to the agreement with Circle, the company that issues USDC. In other words, the figure comes due to rising interest rates and a split revenue scheme on a pro-rata basis between the two companies.

Coinbase reported a reduction in revenue in Q4 while seeing a surge in staked balances on its platform during that quarter. At the conclusion of the prior year, ETH2 staking had the highest staked balance, totalling nearly $3 billion. However, staking has recently generated controversy due to the SEC’s crusade against staking services provided by exchanges like Kraken.

Coinbase said that it will “happily defend” the fact that its own staking services are not securities in court, if necessary. The announcement followed the US Securities and Exchange Commission’s order for Kraken to stop providing cryptocurrency staking services and pay a $30 million penalty.

The exchange expects more regulation is in the pipeline for the crypto sector.

While acknowledging that FTX’s demise in November 2022 served as a catalyst for increased attention, Coinbase also said that certain measures had been punitive instead of reactive.

According to Coinbase, the US has adopted a more “disjointed” approach to cryptocurrency regulation, which could help drive the industry overseas.