Coinbase Up Ahead of Earnings Release

Coinbase shares have jumped 37% over the past week amid Bitcoin price rally. The cryptocurrency exchange is set to report its fourth quarter 2022 earnings on Thursday, February 16. Analysts expect strong results. 

According to aggregated data, analysts estimate Coinbase's revenue increased 22% from Q3 to Q4 2022. They predict revenue rose from $825 million to $1.42 billion.

Some of the growth is expected to come from higher trading volumes. Analysts forecast volumes almost doubled from $76 billion in Q3 to $142.7 billion in Q4.Estimates also show Coinbase earnings-per-share swinging from a $0.01 loss in Q3 to $0.02 profit in Q4.  

Bitcoin Price Fuels Optimism 

The price of Bitcoin has jumped 16% in the past week. This likely drove increased trading activity on Coinbase.

On February 13, rival Robinhood reported a 24% year-over-year rise in quarterly revenue. Crypto trading revenue gained 10%.

Concerns Over Future Growth 

Some analysts are skeptical Coinbase can sustain momentum into 2024.In January, JPMorgan predicted Coinbase shares would fall this year. They cited an "underwhelming" launch of spot Bitcoin ETFs.

However, flows into Bitcoin ETFs have picked up recently. On February 13, BlackRock's IBIT saw $493 million in inflows.Coinbase is the custodian for 8 of the 10 spot Bitcoin ETF providers.

SEC Lawsuit Looms  

Coinbase faces a significant challenge in its ongoing lawsuit with the SEC, which alleges the exchange sold unregistered securities. Crypto lawyer James Murphy argues that the SEC has overreached in its claims, but the legal status of various crypto assets remains a complex and disputed issue.

The outcome of the lawsuit could have significant implications for both Coinbase and the broader crypto industry.

Fueled by Bitcoin's surge, Coinbase shares skyrocketed 14% on Valentine's Day. But will upcoming earnings results offer investors true love, or just a market mirage?