Coinbase Stock Soars Ahead of Earnings, Bitcoin Futures Offering on the Horizon; Bankman-Fried Verdict Looms


Coinbase (COIN) stock surged nearly 9% Thursday prior to the release of its Q3 results after the close. The publicly-traded crypto exchange announced Wednesday evening that eligible customers in the U.S. can now trade futures contracts tied to bitcoin and ether, the token for ethereum, through Coinbase Financial Markets. Futures contracts allow investors to speculate on future price movements, with contracts representing 1/100th of a bitcoin for bitcoin futures and 1/10th of ethereum for ether contracts.

Analysts polled by FactSet expect Coinbase to report a loss of 55 cents per share, improving from a loss of $2.43 per share last year. Adjusted losses are seen narrowing to 21 cents per share from 59 cents in 2022. FactSet expects a 10.4% increase in revenue, to $651 million, to end a six-quarter streak of double-digit declines. Wall Street also predicts trading volume of $80.1 billion, down from $92 billion in Q2 and $159 billion a year ago.

Retail trading volume is seen dropping to $11.6 billion, down 17.1% from last quarter and down more than 55% from the same period last year. Institutional trading volume is also guided down 17.4% quarter over quarter to $64.4 billion. Coinbase reported $133 billion in institutional trading volume in 2022. Monthly Transacting Users (MTUs), or those that make at least one transaction per month, are seen increasing to 7.55 million from 7.3 million in Q2. Coinbase reported 8.5 million MTUs in Q3 2022.

The price of bitcoin and other cryptocurrencies have risen on a string of regulatory court wins and hopes a spot bitcoin ETF will launch soon. Bitcoin traded around $34,600 Thursday after rallying to $35,938 overnight — its highest level since May. Ethereum hovered below $1,800 Thursday, down from its Wednesday night peak of $1,874. Grayscale Bitcoin Trust (GBTC), which Grayscale Investments hopes to convert into a spot bitcoin ETF, rose modestly Thursday. Bitcoin miner Marathon Digital (MARA) jumped more than 10%.

Elsewhere, a verdict in the trial of FTX founder Sam Bankman-Fried could come as early as Thursday afternoon. SBF faces several fraud charges for his role in the collapse of the exchange last year. The trial included testimony from FTX co-founder and CTO Gary Wang, director of engineering Nishad Singh and Alameda Research CEO Caroline Ellison. Ellison testified that SBF knowingly ordered Alameda Research to commit crimes. Bankman-Fried potentially faces up to 115 years in prison if convicted.

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