Coinbase Global Inc. could challenge expectations on Wall Street by achieving profitability for the first time in two years.

This potential success is due to the resurgence of Bitcoin and the cost-saving measures implemented during the previous downturn in the cryptocurrency market.

John Todaro of Needham & Co. anticipates that the largest US crypto exchange will report a net income of $103 million in its upcoming fourth-quarter results, which contrasted with the projections of many analysts surveyed by Bloomberg. These analysts forecast a loss of approximately $16 million, or 5 cents per share, for Coinbase.

In the last quarter, Bitcoin surged by almost 60%. Marking a 157% annual increase leading up to the launch of US exchange-traded funds focused on cryptocurrency in January. The impact of these ETFs on Coinbase’s long-term performance remains uncertain.

Owen Lau, an analyst at Oppenheimer & Co., believes that perceptions of Coinbase as an unprofitable company may be changing, especially if the exchange reports a profit. 

Despite a nearly fivefold surge in share price last year, Coinbase’s stock has declined by approximately 2.2% since December and remains below half of its record high from 2021.

Lau added, “Coinbase can be perceived to be a much stronger company in 2024 because they were just under very harsh, extreme scrutiny over the past two years from regulators and investors, I do think Coinbase comes out much stronger after this scrutiny.”

Achieving profitability again would pave the way for a potential recovery in 2024, according to Todaro. He predicts a net income of $1.2 billion for the current year, a stark improvement from the estimated $75 million loss in 2023. Despite projecting revenue growth, analysts surveyed by Bloomberg still anticipate a $27 million loss for the year.

Also Read: JPMorgan Upgrades Coinbase to Neutral Amid Crypto Surge