Coinbase share price spikes 7.9% as Q1 results beat expectations

Crypto exchange Coinbase managed to significantly narrow its bottom line in the very first quarter of 2023, due in part to robust profits from retail investor trading activity.The companys bottom line fell from $557 million in Q4 2022 to $79 million in Q1, partly attributed to a 22% boost in earnings to $736 million.The outcomes beat expectations from some analysts, causing a 7% spike in Coinbases (COIN) share cost in after hours trading.Coinbases (COIN) share price. Source: Google Finance.Transaction earnings– originated from fees its charges for trades– from its institutional base increased a whopping 66% to over $22.3 million, while deal revenue from retail financiers increased14.1% to $352.1 million, according to Coinbases May 4 investor letter.Overall, income from deals increased 16% quarter-on-quarter to $375 million, though trading volumes remained relatively flat.Interest earnings and blockchain rewards from staking generated the most earnings for the quarter, which increased to $240.8 million and $73.7 million respectively from Q4 2022. Coinbases earnings for the very first quarter of 2023. Source: Coinbasewo 10/ ch 66The portion of revenue from Bitcoin (BTC) (36%) and Ether (ETH) (18%) trades remained practically identical over the quarter.The firm is inching closer to success following a troubled 2022 which saw general bottom lines of $1.16 billion, $803 million, $576 million and $605 million across each respective quarter last year.Coinbase discussed that the quarter represented a “turning point” towards building a more “effective” and “economically disciplined” firm:”We minimized expenses, doubled down on operational quality and threat management, and continue to drive product innovation and regulative clarity. Our efforts are showing significant progress.””Our groups are smaller, however more active than ever and we are pleased with the pace of development and the outcomes we are seeing,” the company added.Coinbase cut personnel by 18% in June, 2022 and then another 20% in January, 2023 in order to guarantee the company keeps an appropriate level of “functional performance,” Armstrong explained.Related: Coinbase International Exchange introduces amidst SEC crypto crackdown in the USCoinbases remarks were made due to the Wells Notice hanging over their heads from the United States Securities Exchange Commission (SEC):”We see this as a chance to continue promoting a clear rule book in the United States for crypto regulations.”The company stated it is “heartened” to see more bi-partisan assistance for incoming crypto legislation and hopes to play a function in promoting for a rules-based industry.Magazine: Crypto policy– Does SEC Chair Gary Gensler have the last say?