Crypto Boom: How Coinbase and Robinhood Became the New Wall Street Darling

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So, it turns out that Coinbase and Robinhood have decided to throw a little party, and guess what? They crushed all expectations during their fourth-quarter earnings calls. I mean, who knew that trading digital coins could be so lucrative? Apparently, stock analysts were just as surprised as I was, raising their price targets like they were trying to catch a runaway train. 🚂💨

In the last three months of 2024, crypto trading volumes soared higher than my hopes of ever understanding Bitcoin. Coinbase and Robinhood, the latter of which is known for its stock trading but is now diving headfirst into crypto, reported revenues and profits that made everyone do a double take. I can only imagine the analysts at JPMorgan doing a happy dance in their cubicles. 💃

Coinbase had its strongest quarter in over a year, thanks to a little thing called the U.S. election. Apparently, when Donald Trump took office, crypto prices and trading surged like a teenager’s self-esteem after a good hair day. Robinhood, not to be outdone, saw its profits beat estimates, with crypto revenue jumping a staggering 700% year-on-year. I mean, if only my bank account could grow that fast! 💸

According to the analysts, the fourth quarter was a “pivotal and consequential period for the crypto ecosystem.” I’m not sure what that means, but it sounds important, like the time I finally figured out how to use the self-checkout at the grocery store. They noted that market caps exploded, volumes jumped, and new participants entered the market like it was a Black Friday sale. 🛒

Coin Metrics chimed in, saying the surge in trading was fueled by “renewed market optimism post-U.S. election.” Trump has promised to make America “the world’s crypto capital.” I can only imagine the bumper stickers that will come out of that. “Make Crypto Great Again!”

In the past year, shares of Coinbase and Robinhood have skyrocketed by approximately 112% and 365%, respectively. I’m starting to think I should have invested in crypto instead of that artisanal cheese shop. 🧀

Raising price targets

Analysts at JPMorgan and US Tiger Securities have raised their price targets for Coinbase’s stock, COIN, to $344 and $300 per share. That’s up from $264 and $265. I guess they really believe in the power of digital coins—or maybe they just want to sound smart at cocktail parties.

Coinbase’s financial results from Feb. 13 show they hit a total revenue of $2.3 billion, up 88% quarter-on-quarter. That’s more than I’ll probably make in my lifetime, and I’m not even exaggerating. Their net income was $1.3 billion, which is far beyond what anyone expected. I can only imagine the analysts’ faces when they saw those numbers—like kids on Christmas morning. 🎄

In Q4, retail trading volumes on Coinbase surged to $94 billion, and institutional volumes hit $345 billion. That’s a three-year high! It’s like everyone suddenly remembered they had a crypto account and decided to throw caution to the wind. “Let’s trade like there’s no tomorrow!”

Coinbase also earns revenue from services like digital asset custody and facilitating crypto staking. I’m still trying to figure out what “staking” means. Is it like when I stake my claim on the last slice of pizza? 🍕

While waning regulatory barriers might increase competition, Coinbase is welcoming it. They see greater participation across crypto peers as a net positive. I guess that’s one way to look at it. “More competition means more fun!” said no one ever at a family reunion.

Meanwhile, JPMorgan raised targets for Robinhood shares, HOOD, to $45 from $39. They noted that crypto trading revenues are becoming a bigger part of Robinhood’s business. It’s like they’re saying, “Hey, remember when we were just about stocks? Well, surprise! We’re also into crypto now!”

Robinhood reported $358 million in crypto transaction revenue, which is about 35% of their total revenue. That’s the

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2025-02-14 23:21