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GM. This is Milk Road, the newsletter that feverishly combs through crypto earnings reports, to deliver golden nuggets of information straight to your inbox. |
Here’s what we got for you today: |
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COINBASE’S Q4 EARNINGS JUST DROPPED 👀 |
If you need a dictionary definition of “under promise and over deliver” – look no further than Coinbase’s Q4 2024 earnings report. |
Our reactions right off the bat: |
Holy hell, they 27x’d their net income in 2024! Half (half!) of that was generated in Q4 alone?? WHY THE HELL IS THE STOCK DOWN 6% TODAY??
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Ok. Now, let’s dig into the finer details across revenue & net income, product growth, regulatory wins, institutional adoption & new product offerings – but most importantly… |
The key takeaways that most people missed! |
1/ Revenue & Net Income |
Full-year revenue more than doubled to $6.6B (vs. 2023’s $3.1B)! 🔥
Thanks in large part to 2024’s Q1 & Q4 market rallies, driven by new regulatory optimism. Net Income Growth left Revenue Growth in the dust! 👋
Revenue: “I more than doubled year-on-year.” Net Income: “hold my beer.” Net income (aka: real profit) went from $95M in 2023, to $2.6B in 2024 – that’s a 27x! Q4 was the MVP for revenue. 🏆
Q4 revenue moved up 88% quarter-over-quarter to $2.3B, with trading volume up 137%.
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2/ Product Growth |
Base takes the #1 spot in multiple categories. 🥇
Base laid its claim as the #1 Layer 2 blockchain, became the #1 platform for onchain apps, and handled $25B in stablecoin payments in Q4 alone! Coinbase One surpassed 600k subs. 💪
The growth of Coinbase One (their monthly subscription that offers zero fees) helped to more than double their ‘other subscriptions and services’ revenue quarter-on-quarter. $USDC was the fastest growing major stablecoin in 2024 – and Coinbase got a solid chunk of its revenue. 📈
Coinbase’s quarter-on-quarter $USDC revenue might have been down (due to lowered interest rates) – but that didn’t stop them from locking in 31% year-on-year growth and closing out 2024 with $910.5M in revenue generated from $USDC alone!
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3/ Regulatory Wins |
New regulation should allow Coinbase to list more tokens! 📋
This is bigger than you think! There’s a phrase called “The Coinbase Effect” which references the increase in value a token sees once it’s listed on Coinbase. More listings could = more value generation. Coinbase can now look at US Mergers & Acquisitions (M&A) once again.
“M&A is legal again in the United States, sort of jokingly I'm saying that, but there's an incredible pipeline of companies out there that could make sense to purchase as well. So yes. A lot of good things on the horizon.” – Brian Armstrong, earnings call. The pro-crypto U.S. administration is looking to advance stablecoin legislation. 🤝
This is particularly important given Coinbase’s largest current revenue driver is stablecoins!
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4/ Institutional Adoption & New Product Offerings |
Assets on Coinbase now make up 12% of the total crypto market cap 😧
As of Dec 31, 2024, Coinbase had $404B in total assets on its platform – which is approximately 12% of the total crypto market cap! Real world assets (RWAs), prediction markets, greater derivatives trading and a Coinbase decentralized exchange (DEX): incoming? 🙏
Coinbase is looking at bringing RWAs (e.g. real estate & stocks) onchain, expanding its derivatives trading (especially in the U.S.), launching its own DEX, and even hinted at creating its own Polymarket-style predictions market! Institutional Transaction Revenue is up and to the right! ⤴️
Institutional revenue is up 156% quarter-over-quarter ($55M to $141M), and 283% year-on-year ($90.2M to $345.6M)!
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Ok, this sounds awesome! So why is the stock down 6% on this news? |
Honestly, we can’t for the life of us figure it out. We read the earnings report, listened to the call – hell, we even got DeepSeek to comb through the report & transcript alongside us… |
The only obvious negatives of the report were: |
$USDC revenue dropped quarter-over-quarter (which is easily explained away by interest rates lowering) Coinbase’s operating expenses rose 19% quarter-on-quarter, driven by marketing and policy advocacy costs.
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Neither of which are all that surprising ¯\_(ツ)_/¯ |
The crazy part is – the hidden takeaways that we’re about to cover in the next article will only make you more bullish on $COIN. |
(Wall Street must be smoking something). |
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WHAT EVERYONE MISSED IN COINBASE’S EARNINGS 😴 |
These are the insights within the insights (the insight-ception, if you will). |
Ready? Let’s go! |
1/ 50% of Q4 customers were either new, or dormant (i.e. hadn’t traded since the previous cycle) ✨ |
This is a great sign! New and dormant user growth helps to bridge us from the ‘growth’ phase of the bull market, to the ‘euphoria’ phase, as retail piles in. 👇 |
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2/ $BTC & $ETH trading is down quarter-on-quarter and year-on-year, while altcoin trading is up! 📊 |
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This poses a short term problem for centralized exchanges like Coinbase, because even if the regulatory environment is easing – launching new tokens ‘by the book’ still takes time. |
The secret weapon/solution here? The potential launch of a Coinbase decentralized exchange. |
By launching/integrating a DEX, Coinbase users can get access to pretty much any token they want, without Coinbase having to go through the regulatory process to list them. |
3/ Coinbase is quietly creating its own version of the ‘Apple Flywheel’ 🍏 |
The flywheel works like this: |
You take pre-existing solutions/products → and add them to your user-friendly ecosystem (giving people fewer and fewer reasons to use any product other than yours). |
RWAs, prediction markets, derivatives trading, decentralized exchanges, AI agents, institutional trading and custody… |
If people are interested in it, Coinbase is either building it, or making it very easy for others to build it within their ecosystem. |
The result: a product suite that diversifies Coinbase’s revenue streams far, far beyond trading fees. |
We said this earnings report was going to be ‘The Super Bowl Of Crypto’ – and it has not disappointed us. |
Bravo Coinbase, bravo. |
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HOW DO YOU TIME ALTCOIN SEASON BASED ON MACRO? WITH REAL VISION'S ‘STENO’ 📈 |
Andreas Steno Larsen (aka: Steno) is CIO at Steno Global Macro Fund, CEO of Steno Research, and a host on Real Vision. |
But all you really need to know right now is that: |
Steno is one of the best macro experts in the space. Yesterday he joined us on The Milk Road Show.
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It was a banger of a conversation, with a stack of golden insights – including, but not limited to: |
The three bullish macro catalysts to watch for in 2025 How you can use ISM Manufacturing and PMI data to predict altcoin rallies Why retail negativity is overstated and what interest you should actually be looking at
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Don’t miss it! Seriously. Click the video below to watch it now! 👇 |
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YouTube | Spotify | Apple Podcasts |
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BITE-SIZED COOKIES FOR THE ROAD 🍪 |
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GameStop eyes Bitcoin investment. This news caused $GME to soar 20%. The power of Bitcoin. |
Another Bitcoin bull is added to the roster. Trump has nominated former crypto firm Bitfury CLO Jonathan Gould as the country’s bank regulator. |
“Oh buddy, you really like Bitcoin, eh?” The Bank of Montreal has been quietly buying Bitcoin ETFs |
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Tracking funding rates = spotting pullbacks before they hit. Crypto pullbacks can get real ugly—that’s why you should keep an eye on funding rates. |
**This is partner content. |
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. |
