Coinbase Announces 1 Billion Stock Buyback Plan Expressing Strong Confidence in PostElection Crypto Outlook
Coinbase, the U.S. compliance exchange, has released its financial report for the third quarter, showing a decline in profits. Despite the board’s approval of a $1 billion stock buyback plan, COIN’s stock price fell nearly 5% in after-hours trading. Additionally, Coinbase has expressed optimism and confidence regarding the future of cryptocurrencies following the U.S. presidential election.
Source: CNBC
Third Quarter Profit Decline, Stablecoins at the Core of Strategy
Coinbase’s total revenue for the third quarter was $1.205 billion, a 17% decrease from $1.45 billion in the previous quarter. Adjusted EBITDA for the third quarter was $449 million, down from $596 million in the prior quarter. Compared to the second quarter, stablecoin revenue was one of the two sources of revenue that improved. Coinbase reported stablecoin revenue of $247 million, a slight increase from $240 million in the previous quarter, with the trading volume of stablecoins rising from 10% to 15% of total cryptocurrency trades. Interest income from enterprises and other revenue also saw a small increase.
In a statement, Coinbase said, “We have seen stablecoin trading volume grow quarter over quarter. We believe this growth is driven by product updates. Although we charge almost no fees on stablecoin pair trades, the increasing popularity of stablecoins (especially USDC) is central to our strategy as we monetize USDC through commercial arrangements with USDC issuers.”
Board Approves $1 Billion Stock Buyback Plan
In October 2024, Coinbase’s board authorized and approved a stock buyback plan that allows for the repurchase of up to $1 billion of outstanding Class A common stock without a set expiration date. The timing and amount of any buybacks will depend on market conditions, and the plan may be modified, suspended, or terminated at any time. U.S. publicly traded companies often use stock buyback programs to boost their share prices, as repurchasing shares reduces the number of shares outstanding, increasing earnings per share (EPS) and, in turn, raising stock prices. Additionally, stock buybacks are often interpreted by the market as a sign of the company’s confidence in its future.
Confidence in Cryptocurrency Outlook After the U.S. Presidential Election
Coinbase, which has long called for clearer U.S. regulations, has expressed an optimistic and neutral tone ahead of the upcoming presidential election. The company believes that as the 2024 U.S. election approaches, cryptocurrencies have clearly emerged into the spotlight. Both presidential candidates and politicians from various political factions have adopted a more favorable stance toward cryptocurrencies, marking a significant shift from previous years.
Looking beyond the election, we remain committed to enhancing regulatory transparency. Regardless of the election outcome, we maintain an optimistic outlook for the future. The growing influence of the cryptocurrency community, coupled with bipartisan support in Congress, has made the path for supporting cryptocurrency legislation clearer than ever before. We are eager to collaborate with any administration in 2025 and believe that the future will yield meaningful foundational regulations for cryptocurrencies.
