Summary Coinbase's FY 2024 earnings report showed a 115% YoY revenue increase, but the stock dropped 13% due to market conditions and concerns over competition from the likes of Robinhood. Robinhood's acquisition of Bitstamp and its 700% crypto revenue jump positions it as a strong competitor to Coinbase in the crypto space. Both stocks fell recently despite Bitcoin's rise, influenced by broader economic concerns over consumer spending outlook. Current price dips in Coinbase might be a buying opportunity, given its rising line item efficiency and potential fee structure rationalization. Since the release of its earnings for Fiscal Year (FY) 2024 on the 13th of February through the 19th, the stock price of global cryptocurrency exchange Coinbase Inc ( COIN ) has dropped by more than 13%. Going by line item trends, this flies in the face of overall trends. Trend Drilldown Net revenues in FY 2024 saw a solid 115% increase in year-on-year (YoY) terms, along with some interesting line item trends being confirmed. Source: Created by Sandeep G. Rao using data from Coinbase's Financial Statements Stablecoins see a retreat in revenue contributions, leading to a 11% reduction in the contribution of "Subscription and Services" to net revenue. "Transactions", meanwhile, saw a staggering 162% increase in revenues being contributed in early signs of 2022's highs hovering into sight for this segment. Despite the drop in stablecoins' contribution, this category grew 31%. However, blockchain rewards and custodial fee revenues grew to well over twice past years' numbers - a trend that underlines the fact that the crypto space continues to grow unabated. "Transactions" have climbed out of a deep slowdown to register a powerful 162% growth over last year. At $22.8 billion, overall net income showed an astonishing 2,618% growth over past year's $0.1 billion. Increased transactions and net revenue growth weren't the only tailwinds for this; lowering expenditure played a part too. Source: Created by Sandeep G. Rao using data from Coinbase's Financial Statements While transaction and sales expenses remained fixed, the company's massive expenditure on technology nearly halved, leading to total operating expenses also halving. Overall, net income grew from 3% share of net revenue in FY 2023 to nearly half in FY 2024. In the "Transactions" segment, consumers (i.e. not institutions) went from generating a little under half of net revenue in FY 2023 to a little over half at 55%. Institutions, meanwhile, remained more-or-less steady at 5% contribution. The significance of retail investors in Coinbase's transforming fortunes isn't a lesson missed by other players in the market. Competition has been growing by leaps and bounds. A Competitor and Bitcoin Correlations Of particular interest amidst a plethora of alternatives in the crowded crypto access business is Robinhood Markets Inc ( HOOD ), which announced the acquisition of crypto exchange Bitstamp in June last year. Bitstamp is the world's longest-running cryptocurrency exchange and offers crypto trading all over the world—much like Coinbase—and is expected to be completed by the first half (H1) of 2025. In its quarterly earnings release one day before that of Coinbase, Robinhood declared that over half of its $672 million of transaction-based revenue—$358 million—was crypto-based, marking an over 700% jump from the same quarter last year. The quarter's revenue of $1.01 billion handily beat analysts' consensus of $946 million, while reported earnings per share of $1.01 was more than double that of consensus estimates. In the new year, the market has already drawn correlations for both stocks with the performance of Bitcoin ( BTC-USD ). Source: Created by Sandeep G. Rao using data from Yahoo! Finance Of the two stocks, Robinhood is arguably better-diversified as it offers equities and other market instruments on its platform to its U.S. customers. However, in the crypto space, its sights are set to compete with Coinbase globally. Robinhood's adhesion among retail investors with small portfolios and an interest in established cryptocurrencies hasn't been entirely missed by the market. For retail investors, Robinhood's markups and interest earnings on balances can often work out to be substantially cheaper than the costs implied by the complex fee model Coinbase operates with. However, both stocks broke their winning streak in the year till date starting from about a week ago, with President Trump's tariff struggles intensifying. As the article describing the effects of President Trump's tariff strategy outlined: while it is entirely possible that sustained tariffs might eventually promote domestic manufacturing, it will remain a pain point for U.S. citizens and businesses alike in the interim. One interesting proxy barometer for outlook on consumption, interestingly, is Walmart's sales outlook due to its long-standing status as a darling of the value-seeking, cost-conscious American consumer. Walmart's relatively gloomy outlook for 2026 indicated that the retail giant expects sales to be lower, while the current fiscal year's sales to grow by 3-4%, which, when adjusted for real inflationary effects, could constitute a net decrease in total unit sales. The entire market, including recession favorites such as banks, dipped as a result on the 19th of February. In Conclusion If there's less money to be spent on supplies, there's bound to be less money available for investments. Given that, both Coinbase and Robinhood have had a precipitous decline over the past week despite Bitcoin rising since the 18th of February which hitherto had also led to these stocks rising. As Robinhood's Bitstamp acquisition completes and the two platforms are integrated, across-the-board usability will likely increase via the introduction of Bitstamp's advanced trading features to Robinhood's user base. If the battle for crypto dominance is framed as being between Coinbase and Robinhood, the completion of Robinhood's Bitstamp might be the impetus needed for Coinbase to begin rationalizing its fee structure and broadening its investor accessibility. On the basis of this, the current price depression might be an opportune moment for some investors to buy into Coinbase's stock: as line item trends suggest, the company's line item efficiency is rising and poised to soar higher. Of course, Robinhood's broadness of market instrument accessibility is no small thing, either. All in all, neither Coinbase nor Robinhood is definitively better or worse than the other. The weary American consumer's behavioral outlook is the trillion-dollar question.
