Coinbase's (COIN) shares are continuing their upward trend in pre-market trading following the announcement of the company's first quarterly profit since 2021. The strong performance is attributed to surpassing both top and bottom-line earnings estimates, coinciding with Bitcoin (BTC-USD) rising above $52,000 amid excitement around spot ETFs. Ark Invest CEO Cathie Wood praised Coinbase, stating the exchange is "executing brilliantly."
Oppenheimer Analyst Owen Lau, in an interview with Yahoo Finance, discussed Coinbase's fourth-quarter results and its standing in the cryptocurrency space. Lau highlighted a crucial question he posed to Coinbase's management regarding their investments in anti-money laundering efforts. The CFO indicated substantial investments in this area, emphasizing the importance of regulatory compliance in the crypto industry.
The video transcript further includes insights from Cathie Wood, who commended Coinbase for being the most compliant exchange from a regulatory standpoint and emphasized its strategic position.
When asked about potential competition and the impact of compliance budgets, Lau expressed confidence in Coinbase's commitment to anti-money laundering measures. He believes the company's status as a public entity underscores its dedication to compliance.
Additionally, Lau addressed Coinbase's role as the custodian for spot Bitcoin ETFs, acknowledging the potential pressure from the SEC and lawmakers on traditional banks. Despite potential regulatory changes, Lau emphasized Coinbase's first-mover advantage and established trust with large issuers, suggesting the company's position remains robust.
Regarding market share, Lau noted the challenges for newcomers to the crypto space, citing past attempts by FTX and others to compete with Coinbase through low fees, which did not yield successful outcomes. Lau anticipates additional entrants but deems it difficult to take significant market share from Coinbase in the current landscape.