Coinbase, the leading U.S. cryptocurrency exchange, experienced a 15% surge in its shares during Friday's U.S. trading session following the announcement of its first profit in two years. The company reported a net income of $273 million in the fourth quarter of 2023, marking its first positive net income since Q4 2021.

Coinbase disclosed that its net revenue for Q4 2023 reached $905 million, a notable increase of nearly 50% compared to the same period the previous year. The surge in interest and investment in cryptocurrencies in the fourth quarter of 2023 was attributed to the U.S. Securities and Exchange Commission's approval of the first spot bitcoin exchange-traded funds (ETFs).

The introduction of Bitcoin ETFs, allowing retail investors to access cryptocurrency via a regulated exchange, without direct exposure to the underlying asset, stimulated increased demand for cryptocurrencies. Coinbase emphasized that transaction revenues were the primary driver of its revenues in Q4 2023, with subscription and services revenue remaining relatively stable.

The company highlighted heightened volatility in crypto prices during the quarter, reminiscent of levels observed in Q1 2023. This volatility was influenced by the approval of the bitcoin ETF and optimistic expectations for improving macroeconomic conditions in 2024.

Consumer trading revenue for Q4 2023 amounted to $493 million, reflecting a substantial 79% increase quarter over quarter. Coinbase's Chief Financial Officer, Alesia Haas, explained that the platform did not need to adjust fees to accommodate the higher volumes, as the fee rate results were influenced by the mix of "Simple" and "Advanced" traders on the platform. Haas noted that during Q4, the increased volatility led to growth in Simple trading, but Advanced trading experienced even more significant growth.