May 2 (Reuters) - Coinbase Global (COIN.O) opened a new tab by posting a first-quarter profit of more than $1 billion from a year-earlier loss, helped by a slight rise in cryptocurrency exchanges after launching its first US-listed company. business. Exchange-traded funds (ETFs) follow Bitcoin in January.
The company on Thursday reported net income of $1.2 billion, or $4.84 per share, for the quarter ended March 31, compared with a loss of $79 million, or $0.34 per share, it a year ago.
Coinbase shares fell 2.5% after hours, after ending the trading session up almost 9%.
“Despite a very strong report, the stock traded lower after hours on concerns of lower trading volumes due to bitcoin's bearish movement,” said Paul Marino, Director of the income of the investment company GraniteShares.
Cryptocurrency prices rose after the U.S. Securities and Exchange Commission approved the launch of a series of exchange-traded funds (ETFs) tied to the spot price of bitcoin in January, after a decade of struggle with the industry.
Coinbase is the custodian for several Bitcoin ETFs, including BlackRock's iShares Bitcoin Trust (IBIT.O).
ETF enthusiasm propelled Bitcoin to a new record high above $72,000 in March and renewed investor enthusiasm for digital assets. Trading volume at Coinbase in the first quarter was $312 billion, up from $145 billion a year earlier.
“Keeping our cost structure low while continuing to innovate really pays off,” CEO Brian Armstrong said on a call with analysts.
However, in recent weeks, Bitcoin has faced challenges as investors recalibrate their interest rate expectations.
The US Federal Reserve kept interest rates high on Wednesday after tightening monetary policy at an unprecedented pace. He said he still favored possible reductions in borrowing costs, but pointed to recent disappointing inflation figures which could delay further interest rate cuts.
Higher rates have allowed Coinbase to increase its interest income. Coinbase earns interest on reserves of USD Coin (USDC), a stablecoin it jointly governs with cryptocurrency company Circle. USDC, a token designed to have a relatively stable price, is backed by the dollar and similar assets held at banks and other financial institutions.
Coinbase reported interest and finance fee income of $66.7 million in the first quarter, up from $43.3 million a year earlier.