Coinbase Q4 financial report explodes! Q4 and Annual Financial Report Overview Yesterday, the US stock market closed with a rare divergence between Strategy and COIN prices. Strategy closed down 0.58%, COIN rose 8.44%, and the Q4 2024 interest rate cut was related to Trump's trading theme. Cryptocurrency trading volume surged, and institutions bet on Coinbase's financial performance. After the market closed, Coinbase released its Q4 financial report with a satisfactory answer Overall performance In 2024, Coinbase achieved strong growth with a total annual revenue of $6.6 billion, more than doubling from last year (a year-on-year increase of 111%). Net profit was $2.6 billion, and adjusted EBITDA was $3.3 billion. Q4 total revenue was $2.3 billion, a month on month increase of 88% Trading business Significant increase in transaction revenue: The annual transaction revenue reached 4 billion US dollars, a year-on-year increase of 162%. Q4 trading revenue was $1.6 billion, a significant increase of 172% compared to the previous quarter. This is mainly attributed to the soaring market trading volume, with an annual trading volume of $1.2 trillion. Retail investors and institutions are working together: Retail trading volume reached $94 billion in Q4, a month on month increase of 176%, while institutional trading volume reached $345 billion, a month on month increase of 128%. This shows that Coinbase has attracted a large number of new users and successfully won the favor of large institutions. Q4 altcoin trading volume increases: The proportion of Q4 Alt Coin trading volume is as high as 48%, up 15% year-on-year, indicating that retail investors are more inclined to trade altcoins in the bull market. Subscription, service, and other revenue Overall performance: Subscription and service revenue in 2024 was $2.3 billion, a year-on-year increase of 64%, which is about 4.5 times the level of the 2021 bull market. Stable coin business: The annual stable coin revenue reached 910 million US dollars (a year-on-year increase of 31%), with a slight decrease of 9% compared to the previous quarter; But the market share of USDC stablecoins is constantly increasing Blockchain reward income: Q4 reached 215 million US dollars, an increase of 39% compared to the previous quarter, due to the rise in cryptocurrency prices and the increase in protocol reward rates (mainly SOL); Interest and financial expense income, as well as custodial service income, maintained steady growth, thanks to the record high balance of Prime Financing loans and the expansion of custodial assets. In Q4, custodial income reached $43 million, an increase of 36% compared to the previous quarter. Costs and expenses The annual operating expenses were $4.3 billion, a year-on-year increase of 30%, while the total expenses for technology research and development, sales and marketing, and administration increased by 25%. Q4 operating expenses were $1.2 billion, an increase of 19% compared to the previous quarter, with a significant increase in transaction costs (reaching $317 million, an increase of 85% compared to the previous quarter), mainly due to a surge in transaction volume. Q4 transaction fees were $317 million, accounting for 14% of net revenue, lower than Q3 and unchanged from the full year. Outlook for Q1 2025 Revenue expectation: It is expected that Q1 subscription and service revenue will be between 685 million and 765 million US dollars; As of February 11th, transaction revenue has reached approximately $750 million. Costs and inputs: Transaction costs are expected to account for a mid to high proportion of net income; Technical, administrative, and research and development expenses are expected to remain between $750 million and $800 million; Sales and marketing expenses are expected to be between $235 million and $375 million, and may vary due to market fluctuations Key drivers: The revenue growth in Q1 will mainly rely on the strong performance of the stablecoin business, the continued increase in Coinbase One users, and the rise in cryptocurrency prices summary In 2024, Coinbase showed explosive growth: total revenue reached $6.6 billion, net profit was $2.6 billion, trading revenue surged 162% year-on-year, and subscription and service revenue also achieved a 64% growth. However, it is worth noting that Q4's outstanding performance was largely driven by interest rate cuts and Trump's trading theme, which gave rise to a cryptocurrency bull market and significantly boosted trading volume and revenue. However, after entering Q1 2025, the cessation of interest rate cuts and the gradual cooling of the market may make it difficult to sustain the high-speed growth of core businesses, especially trading revenue, in Q4. On the other hand, in terms of subscription and service revenue, due to the impact of the President's MEME and the expected increase in stablecoin revenue, this portion of revenue may maintain some resilience. However, it should be noted that the current revenue from blockchain rewards largely depends on the rise in cryptocurrency prices. With the market experiencing varying degrees of correction in Q1 2025, the level of blockchain rewards in Q4 may be difficult to maintain. Overall, although Coinbase's 2024 financial report data is impressive, changes in the market environment indicate new challenges and adjustments for future growth, and investors need to maintain a cautious and optimistic attitude.