Coinbase posts third-quarter profit on trading strength
Coinbase Global posts Q3 profit vs year ago loss
Quarterly trading volumes more than double
Transaction revenue nearly doubles
Adds comments in paragraph 5, 6 and custodial fee revenue in paragraph 9
By Pritam Biswas
Oct 30 (Reuters) -Coinbase Global COIN.O posted a third-quarter profit on Wednesday, helped by strong trading volumes at the exchange as cryptocurrency increasingly becomes a part of the mainstream investment industry following a string of regulatory clearances.
Crypto markets have been volatile this year, with some of the key assets gaining after the U.S. Securities and Exchange Commission approved an exchange-traded fund to track the spot price of bitcoin and ether, only to lose steam later on economic uncertainties.
The volatility in the asset class has helped third-quarter trading volumes grow to $185 billion from $76 billion at the largest cryptocurrency exchange in the world, giving a boost to transaction fees.
In the last few weeks, sentiment towards the industry has shifted in lockstep with the odds of a Republican win in the presidential election, as Donald Trump has positioned himself as the pro-bitcoin candidate.
"The upcoming 2024 elections are the next major milestone in our ongoing work to drive regulatory clarity for crypto," the company said in a shareholder letter.
"Both presidential candidates are now courting the crypto voter in their statements. Over 350 politicians running for federal office have now adopted pro crypto stances," Coinbase CEO Brian Armstrong said on a conference call.
Coinbase's total transaction revenue nearly doubled to $572.5 million in the third quarter, helping the exchange post total revenue of $1.21 billion, up from $674.15 million a year earlier.
Revenue from Coinbase's subscription and services unit, which houses businesses outside of trading, rose to $556.1 million in the quarter from $334.4 million a year earlier.
Quarterly custodial fee revenue climbed to $31.7 million from $15.8 million last year, benefiting from inflows tied to spot bitcoin ETFs.
Coinbase is the custodian for several of the spot bitcoin ETFs, including BlackRock's iShares Bitcoin Trust IBIT.O.
Net income attributable to shareholders came in at $75.46 million, or 28 cents per share, for the three months ended Sept. 30, compared with a loss of $2.27 million, or 1 cent per share, a year earlier.
Reporting by Pritam Biswas in Bengaluru; Editing by Anil D'Silva
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