Ah, Coinbase! The cryptocurrency exchange that has recently decided to throw a party, and guess what? The guest of honor is none other than pro-crypto President Donald Trump, who, in a stunning twist of fate, has managed to send trading volumes soaring to heights not seen in two years. Yes, you heard that right! According to the ever-reliable cryptocurrency researcher Kaiko, we’re talking about a trading frenzy that would make even the most seasoned Wall Street brokers raise an eyebrow.
Now, if you’re wondering what sparked this sudden enthusiasm, it’s Trump’s election win in November. Apparently, the mere thought of a pro-crypto administration is enough to make investors giddy with excitement. And why not? Coinbase’s stock, affectionately known as COIN, has jumped a whopping 40% since Trump’s victory on November 5. It’s like watching a toddler discover sugar for the first time—pure, unadulterated joy! 🍭
However, before you start picturing a bustling marketplace filled with retail investors, let’s pump the brakes. It seems that while institutional investors are throwing money around like confetti, retail traders are still on a coffee break. Kaiko reports that retail traders, who are usually the highest fee payers, have shrunk to a mere 18% of trading volume, down from 40% in 2021. Talk about a disappearing act! 🎩✨
As if that wasn’t enough, several other crypto bigwigs are also gearing up to report their earnings around February 10, including Bitcoin miners like Hive Digital and Hut 8, as well as exchanges like CME Group and Robinhood. It’s like a crypto family reunion, but without the awkward small talk.
Growth in new revenue streams
Now, let’s talk about Coinbase’s revenue. It seems that while retail trading has taken a nosedive, Coinbase is trying to diversify its income streams. In 2024, they’ve made strides in subscriptions and services, but let’s be honest: they’re still a trading platform at heart. Trading accounts for more than 50% of their revenue. It’s like trying to convince your friends you’re a gourmet chef when you can barely boil water. 🍳
Kaiko also pointed out that subscriptions and services are tied to the crypto market’s activity, which means they don’t really act as a safety net during market downturns. So, if you were hoping for a lifebuoy, you might want to rethink that strategy.
Post-election euphoria
As we bask in the post-election glow, it’s clear that trading volumes are reflecting a renewed enthusiasm for crypto. Trump has promised to make America “the world’s crypto capital,” which sounds like a tagline for a really ambitious reality show. 📺
On November 5, Galaxy Digital, a cryptocurrency trading firm, had its biggest trading day of the year, all thanks to Trump’s victory. It’s like the Super Bowl for crypto enthusiasts, and Coinbase, which was waving Trump’s flag during the campaign, is in a prime position to cash in on this excitement.
According to Michale Miller, an equities researcher at Morningstar Inc., Coinbase is likely to benefit from the election results, especially since they’ve been under the regulatory microscope from the SEC. With Trump’s administration expected to be more lenient, Coinbase’s staking business might finally catch a break. It’s like getting a free pass in a game of Monopoly—who wouldn’t want that?
Coinbase operates the second-largest Ether (ETH) staking business after Lido, a decentralized finance (DeFi) protocol. However, they did see a net outflow of nearly 1.3 million ETH in Q4, which is a bit like losing your wallet at a concert. Oops!
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2025-02-10 23:14