Coinbase, a compliance exchange in the United States, released its third-quarter financial report, showing a decrease in profits in the third quarter. Although the board of directors approved a $1 billion stock buyback plan, the price of COIN fell nearly 5% after hours. Additionally, Coinbase has also demonstrated optimism and confidence in the future of cryptocurrencies in the United States after the presidential election.
Source: CNBC
Profit Decreases in Third Quarter, Stablecoin to be Core Strategy
Coinbase’s total revenue for the third quarter was $1.205 billion, a 17% decrease from the previous quarter’s $1.45 billion. The adjusted EBITDA for the third quarter was $449 million, down from $596 million in the previous quarter.
Compared to the second quarter, stablecoin revenue was one of the only two improved revenue sources. Coinbase reported stablecoin revenue of $247 million, slightly up from $240 million in the previous quarter, and its trading volume also increased from 10% to 15% of the total cryptocurrency volume. Corporate interest and other income also saw slight increases.
In a statement, Coinbase said, “We see stablecoin trading volume growing quarter over quarter. We believe this growth is driven by product updates, and while we charge almost no fees for stablecoin trading pairs, the increasing popularity of stablecoins (especially USDC) is at the core of our strategy as we tokenize USDC through commercial arrangements with USDC issuers.”
Board of Directors Approves $1 Billion Stock Buyback Plan
In October 2024, the Coinbase board of directors authorized and approved a stock buyback plan, allowing for the repurchase of up to $1 billion of issued Class A common stock outstanding. The timing and amount of any repurchases will depend on market conditions, and the plan may be modified, suspended, or terminated at any time.
Publicly traded companies in the United States often use stock buyback plans to boost their stock prices because repurchasing shares reduces the number of shares available in the market, increases earnings per share (EPS), and consequently raises stock prices. Additionally, stock buybacks are interpreted by the market as a sign of confidence in the company’s future development.
Confidence in Cryptocurrency Future After U.S. Presidential Election
Coinbase, which has long advocated for clear regulation in the United States, has also expressed optimism and neutrality ahead of the upcoming presidential election.
Coinbase believes that as the 2024 U.S. election approaches, cryptocurrencies have clearly come into the spotlight. Both presidential candidates and politicians from various political factions have taken a more favorable stance on cryptocurrencies, marking a significant shift from previous years.
Looking beyond the election, we remain committed to improving regulatory transparency. Regardless of the election outcome, we are optimistic about the future. The growing influence of the crypto community, coupled with bipartisan support in Congress, makes the path to supporting crypto legislation clearer than ever before. We are excited to collaborate with any administration in 2025 and believe that the future will bring meaningful regulations for cryptocurrencies.