Nasdaq-listed cryptocurrency exchange Coinbase has significantly exceeded analysts' expectations in the fourth quarter of last year as it reported earnings of $1.04 per share, surpassing the expected $0.02 per share.

Leading trade groups are urging the U.S. Securities and Exchange Commission (SEC) to modify accounting rules that currently increase the cost for U.S. banks to hold digital assets on behalf of their customers.

In the final quarter of 2023, venture capital investment in crypto-related startups reached $1.9 billion, marking a slight increase of 2.5% from the previous quarter, according to PitchBook data.

Top stories in the Crypto Roundup today:

• Coinbase Smashes Q4 Earnings Estimates
• Banks Urge SEC to Ease Crypto Accounting Rules
• Crypto VC Investments Rebound in Q4 2023 With $1.9 Billion Invested
• Crypto Market Movers – VET, LCX, UMA

Coinbase Smashes Q4 Earnings Estimates

Nasdaq-listed cryptocurrency exchange Coinbase has significantly exceeded analysts' expectations in the fourth quarter of last year as it reported earnings of $1.04 per share, surpassing the expected $0.02 per share.

The company reported revenue of $953.8 million in the last quarter of 2023, topping forecasts of $826.1 million. These results come after a year in which cryptocurrency prices surged, partly in anticipation of the launch of spot Bitcoin exchange-traded funds (ETFs)in the United States.

The launch of these ETFs last month was reflected in Coinbase's performance, with the exchange witnessing a 100% increase in trading volume compared to the third quarter, reaching $154 billion and surpassing expectations of $142.7 billion. Furthermore, Coinbase revealed an adjusted EBITDA of $964 million for 2023.

Looking ahead, Coinbase anticipates generating between $410 million and $480 million in subscription and service revenue in the first quarter of this year, having already earned $320 million as of February 13.

Banks Urge SEC to Ease Crypto Accounting Rules

Leading trade groups are urging the U.S. Securities and Exchange Commission (SEC) to modify accounting rules that currently increase the cost for U.S. banks to hold digital assets on behalf of their customers.

This plea comes amid bipartisan pressure from Congress for the SEC to reconsider these guidelines and comes from a coalition comprising organizations like the Bank Policy Institute, the American Bankers Association, the Securities Industry and Financial Markets Association, and the Financial Services Forum, which requested the changes in a letter to the SEC.

The coalition argues that the current rules, which mandate that public companies including banks classify cryptocurrencies they hold in custody as liabilities, force these institutions to earmark equivalent assets to meet capital requirements, thereby making it prohibitively expensive to offer digital asset custody services.

The adjustments the banks are calling for include excluding certain assets from the broad definition of cryptocurrency, especially traditional assets managed or transferred via blockchain technology, and an exemption for regulated lenders from having to record these assets as liabilities, while necessitating the disclosure of their crypto activities in financial reports.

The SEC justifies the current guidance by highlighting the risks and uncertainties crypto assets present compared to traditional assets. However, banks argue that this stance effectively hampers their ability to expand digital asset services for customers due to the associated high costs.

Crypto VC Investments Rebound in Q4 2023 With $1.9 Billion Invested

In the final quarter of 2023, venture capital investment in crypto-related startups reached $1.9 billion, marking a slight increase of 2.5% from the previous quarter, according to PitchBook data.

This growth signals the first uptick in venture capital (VC) investments in the crypto sector since early 2022, ending a period of decline that began with rising interest rates triggering a withdrawal from riskier investments such as tech stocks and cryptocurrencies.

The crypto industry faced significant challenges in 2022, notably from the collapse of high-profile entities like Terra, led by Do Kwon, and Sam Bankman-Fried's FTX. Despite these setbacks, recent venture funding has focused on innovative crypto solutions, including the tokenization of assets like real estate and stocks, as well as advancements in decentralized computing infrastructure.

The largest deal of the quarter was a $225 million investment in Wormhole, a company specializing in open-source blockchain development.

Crypto Market Movers – VET, LCX, UMA

Several tokens are leading the charge in the last 7-day period. Some of these are well-known cryptocurrencies with more liquid trading pairs, so we’ll be focusing on these over low-cap cryptos that may have higher percentage changes.

VeChain (VET) - VeChainThor is a public blockchain designed for mass adoption of blockchain technology by enterprise users of all sizes. It is built on the essential building blocks of Ethereum, such as the account model, the EVM, the modified Patricia tree, and the RLP encoding method.

LCX (LCX) - The LCX token operates as an ERC20 token on the Ethereum blockchain. LCX, an abbreviation for Liechtenstein Cryptoassets Exchange, distinguishes itself as a cryptocurrency and digital asset trading platform situated in the crypto-friendly European nation of Liechtenstein.

UMA (UMA) - UMA is an open-source blockchain protocol that enables the creation, management, and settlement of decentralized financial contracts, also known as synthetic assets or derivatives. UMA allows users to create and customize their own financial contracts, providing a permissionless and decentralized way to create and trade synthetic assets on the blockchain.

State of the Crypto by Top Tier Exchange Volume

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