Coinbase Shares Surge 20% on 'Bitcoin Bottom' Talk, Shrugging Off Earnings Shock

Shares of Coinbase Global, the largest cryptocurrency exchange in the US, surged nearly 20% on the 14th despite the headwind of weak earnings. Investors moved in to buy on expectations that cryptocurrencies have bottomed out and will rebound, and on the view that negative performance indicators were already priced in.

In New York trading on the 13th (local time), Coinbase at one point during the session jumped 19% from the previous close to around $167. It marked the biggest intraday gain since May last year. Coinbase shares fell about 8% the prior day and are down roughly 45% over the past year.

The results actually released were weak, as the market had expected. In a filing after the previous session’s close, Coinbase said fourth-quarter revenue fell 20% year on year to $1.8 billion. With cryptocurrency prices falling, trading activity cooled and fee income plunged; on top of that, valuation losses from declines in the value of cryptocurrencies it holds piled up, pushing the company into the red with a net loss of $667 million (about 970 billion won).

Behind the rebound in the stock price is a belief that crypto asset values will recover. Bitcoin, which had fallen for five consecutive trading days, rose 5.5% on the day to reclaim the $69,000 level.

Moves by deep-pocketed investors also fueled the rally. According to overseas media including Cointelegraph, ARK Invest led by Cathie Wood—known as the “Money Tree Sister”—bought newly about $15.2 million worth of Coinbase shares last Friday through three actively managed exchange-traded funds (ETFs). The decision reversed the recent trend, after ARK had reduced its exposure by selling about $39 million worth of shares just days earlier.

Reporter Kim Young-eun kye0218@hankyung.com