Podcast Summary

In this episode, Alyssa Choo from Bitwise joins the host to discuss the recent performance of Coinbase, its Q4 2023 earnings, and the potential opportunities in crypto equities. The podcast also delves into the dynamics of Bitcoin mining and the future of crypto companies in the public trading space.

Key Takeaways

Coinbase’s Q4 2023 Earnings

  • Profitable Quarter: Coinbase reported Q4 2023 earnings, booking a profit for the first time in two years. Revenues were $954 million, up 41% quarter over quarter, beating Wall Street estimates by 14%.
  • Stock Performance: The stock price of Coinbase has been on a tear, driven by cost control, increasing trading volumes, and high interest rates.
  • Trading Volumes: Retail trading volumes on Coinbase’s platform are slowly coming back, accounting for 19% of total trading volume in Q4.

Coinbase’s Future Prospects

  • Derivatives Market: The global crypto derivatives market represented 75% of total crypto trading volume worldwide in Q4. If Coinbase can capture a portion of this market, it has the potential to continue beating revenue estimates.
  • Staking Business: Coinbase’s staking business is popular among customers, with over $7.4 billion worth of assets staked by institutional customers through Coinbase Prime as of December 31st.
  • Infrastructure Goals: Coinbase aims to own the infrastructure for the future rails of finance, similar to Amazon’s trajectory from an online bookstore to Amazon Web Services.

Bitcoin Mining and Crypto Equities

  • Bitcoin Miners: Evaluating Bitcoin miners as an investment opportunity requires considering factors such as power contracts, hardware costs, and maintenance fees. Bitcoin miners are seen as producing cash flows and can be valued using a DCF (Discounted Cash Flow) model.
  • Future IPOs: The potential for future IPOs in the crypto equity space is mentioned, with a focus on Circle’s IPO plans and Coinbase’s stake in Circle.

Sentiment Analysis

  • Bullish: The podcast expresses a bullish sentiment towards Coinbase, highlighting its profitable Q4 2023 earnings, increasing trading volumes, and potential to capture a portion of the global crypto derivatives market. The discussion on Bitcoin miners also reflects a bullish outlook, emphasizing their potential as an investment opportunity.
  • Neutral: The sentiment towards the future of crypto companies in the public trading space is neutral. While there is optimism about future IPOs, particularly Circle’s, there is also recognition of the challenges and uncertainties in this space.

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