Coinbase’s Q4 Results Anticipated to Show Strongest Trading Volume Since 2021.

Coinbase Anticipates Strong Q4 Earnings Amid Crypto Rally, But Outlook for 2025 Remains Unclear

As Coinbase (COIN) prepares to release its fourth-quarter earnings after market close on Thursday, analysts are forecasting a major jump in both revenue and earnings, driven by a strong crypto market performance in late 2024.

For Q4, analysts expect Coinbase’s revenue to reach $1.8 billion, a notable rise from $1.26 billion in Q3, with earnings per share (EPS) anticipated to soar to $1.99, up from $0.41 last quarter.

A key driver of this surge is the expected boost in trading volume, fueled by a strong rally in cryptocurrencies following the outcome of the U.S. presidential election. Analysts predict Coinbase’s trading volume for the quarter will increase to $195.9 billion, up from $185.3 billion in Q3, making it the largest quarterly volume since Q4 2021.

“We remain optimistic on Coinbase, positioning the company to benefit from the potential new phase in the cryptocurrency market,” analysts from Citi wrote in a recent note. Citi has maintained a “buy” rating on Coinbase, raising its price target to $350 from $275. At $270 per share on Tuesday, Coinbase stock is up nearly 90% year-over-year. However, Citi’s forecast for Q4 revenue stands at $1.7 billion, slightly under the $1.8 billion consensus estimate.

JPMorgan’s Ken Worthington also sees the presidential election as a key catalyst for crypto, but he remains neutral on Coinbase’s stock. He projects Q4 revenue at $1.77 billion, which would also miss the $1.8 billion estimate.

2025 Outlook: Volatility and Uncertainty for Coinbase

While the fourth quarter of 2024 benefited from several favorable factors for crypto and Coinbase, predicting the company’s performance in 2025 is more challenging, analysts say, due to the time it takes for policy changes to have an impact.

“For 2025, we expect stable crypto prices and more normalized volumes, resulting in 6% year-over-year growth in transaction revenue, compared to the consensus estimate of 3% growth,” Citi said.

Despite these expectations, Citi notes that Coinbase’s stock will likely remain volatile, driven by broader market trends and shifts in investor sentiment. “The next year or two will be critical in shaping Coinbase’s business strategy and its role in the evolving digital asset landscape,” Citi’s analysts added.

Diversification of Revenue Streams Key to Coinbase’s Long-Term Growth

One of Coinbase’s major priorities in recent years has been to diversify its revenue sources beyond trading fees, which still account for roughly 50% of its total revenue. Research from Kaiko reveals that retail trading, a key driver of higher-fee transactions, has not yet returned to pre-2021 levels. Retail trading volume now represents just 18% of total volume, a sharp decline from 40% in 2021, which has had a negative impact on transaction revenue.

Citi analysts believe Coinbase can address this issue by focusing on areas such as tokenizing assets, enhancing its Web3 capabilities, and developing smart contract applications. The company could also capitalize on blockchain technology for cross-border payments and AI-driven governance, which would help further diversify its revenue streams.

“Coinbase’s growth trajectory will depend on its ability to unlock the utility of blockchain technology, which remains a promising area but still requires clearer regulatory guidelines,” Citi concluded.

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