Cryptocurrency trading is booming, Robinhood's financial report shines, is Coinbase the next riser?

The online brokerage Robinhood has released its fourth-quarter financial report, showing a significant 87% increase in cryptocurrency revenue from the previous quarter and a 10% increase year-over-year, reaching $43 million. CEO Vlad Tenev believes that 2024 will be a better year. Following the announcement, Robinhood's stock price surged more than 10% after hours, also boosting the stock price of Coinbase, which will announce its earnings on 2/15.

The Fourth Quarter Sees Active Crypto Trading, EPS Turns Positive

With the stock market and cryptocurrency market picking up in the fourth quarter, Robinhood reached trading revenue of $200 million. The significant growth came from cryptocurrency trading, with fourth-quarter cryptocurrency revenue up 87% from the previous quarter and 10% year-on-year, reaching $43 million.

Benefiting from the substantial increase in interest income brought by the Federal Reserve's rate hike and the rebound in trading volume, fourth-quarter net income reached $30 million, with earnings per share (EPS) at $0.03.

Expecting a Better 2024, Stock Price Surges 10% After Hours

Robinhood also expects to gain more market share in cryptocurrency trading this year and expand internationally. At the end of last year, Robinhood launched its cryptocurrency trading app in the European Union, offering investors 25 cryptocurrencies including Bitcoin, Ethereum, and SOL. Robinhood also provides trading rebates and referral bonuses in the form of Bitcoin to reward users.

Robinhood CEO and co-founder Vlad Tenev stated in a declaration:

We are set for a better start in 2024 as the funding clients and net deposit levels introduced in the early first quarter have already exceeded those in the fourth quarter of 2023.

After Robinhood released its financial report, the stock price surged over 10% in after-hours trading.

Will Coinbase be the Next to Rise?

Coinbase, which is set to announce its financial report on 2/15, also reversed its decline under optimistic market expectations, slightly rising 0.9% in after-hours trading to $141.

10x Research recently expressed optimism about Coinbase's performance, indicating that Coinbase, highly correlated with Bitcoin in the statistics of cryptocurrency-related stocks, still has significant upside potential.