Coinbase Falls Despite Q1 Earnings Beat: ETFs in Focus

Coinbase Global COIN reported solid first-quarter 2043 earnings results on May 2, after the closing bell. It surpassed estimates on both earnings and revenues, benefiting from the wave of revival in digital coin trading largely due to the launch of a series of new bitcoin ETFs in January.

Yet, COIN shares dropped as much as 4% in the after-market hours on elevated trading volumes. This has put ETFs with double-digit exposure to this largest U.S. cryptocurrency exchange in focus. These include First Trust SkyBridge Crypto Industry & Digital Economy ETF CRPT, Global X Blockchain ETF BKCH, Fidelity Crypto Industry and Digital Payments ETF FDIG, ARK 21Shares Blockchain and Digital Economy Innovation ETF ARKD and ARK Fintech Innovation ETF ARKF.

Coinbase's earnings per share were $4.40, which beat the Zacks Consensus Estimate of $1.04 by a huge margin. The bottom line improved from a loss of 34 cents per share reported in the year-ago quarter. The strong earnings were attributable to a boost in transactions, thanks to the wider crypto market’s upswing and the launch of a series of new bitcoin ETFs in January. Revenues climbed 72% quarter over quarter and 112% year over year to $1.64 billion and beat the consensus estimate of $1.26 billion.

Trading volume jumped to $312 billion from $154 billion in the previous quarter and $145 billion in the year-ago quarter. The improvement was attributed to a strong interest in crypto (read: Spot Bitcoin ETFs Smash Records With $1B Inflows).

Total transaction revenues surged 104% from the fourth quarter to $1.07 billion. Consumer transaction revenues jumped to $935 million, nearly doubling from the fourth quarter, whereas institutional transaction revenues shot up 113% quarter over quarter to $85 million. Total subscription and services revenues climbed 36% from the previous quarter to $510.9 million.

The cryptocurrency exchange expects second-quarter subscription and services revenues in the range of $525-$600 million.

ETFs in Focus

First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT)

First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge believes are driving cryptocurrency, crypto assets and digital economies-related innovation. SkyBridge identifies securities primarily via “bottom up” research focused on finding companies leading in the crypto industry ecosystem. First Trust SkyBridge Crypto Industry & Digital Economy ETF holds 30 stocks in its basket, with Coinbase occupying the top position at 22.5% share.

First Trust SkyBridge Crypto Industry & Digital Economy ETF charges 85 bps in fees per year from investors. It has amassed $47 million in its asset base and trades in an average daily volume of 90,000 shares (read: Top ETF Stories of March to Be Watched in April).

Global X Blockchain ETF (BKCH)

Global X Blockchain ETF seeks to invest in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain and digital asset transactions, blockchain applications, blockchain and digital asset hardware, and blockchain and digital asset integration. Global X Blockchain ETF follows the Solactive Blockchain Index and holds 25 stocks in its basket. Here also Coinbase is the top firm, accounting for 21.9% of assets.

Global X Blockchain ETF has gathered $122 million in its asset base and trades in an average daily volume of 41,000 shares. It charges 50 bps in annual fees (read: Top ETF Stories of March to Be Watched in April).

Fidelity Crypto Industry and Digital Payments ETF (FDIG)

Fidelity Crypto Industry and Digital Payments ETF offers exposure to companies engaged in activities related to cryptocurrency, blockchain technology and digital payments processing. It tracks the Fidelity Crypto Industry and Digital Payments Index and holds 47 stocks in its basket. Coinbase takes the top spot with a 15.8% share.

Fidelity Crypto Industry and Digital Payments ETF has accumulated $82.6 million in its asset base and trades in an average daily volume of 99,000 shares. It charges 39 bps in annual fees.

ARK 21Shares Blockchain and Digital Economy Innovation ETF (ARKD)

ARK 21Shares Blockchain and Digital Economy Innovation ETF is one of the first actively managed ETFs to invest in digital asset futures (bitcoin and ether) and public equities of companies engaged in the blockchain industry and/or digital economy, providing holistic exposure to growth of blockchain technology. ARKD focuses on a concentrated, high-conviction portfolio of equities through a proprietary valuation model. It holds 11 stocks in its basket, with Coinbase taking the third spot at 17% share.

ARK 21Shares Blockchain and Digital Economy Innovation ETF has amassed $3.9 million in its asset base and charges 90 bps in annual fees.

ARK Fintech Innovation ETF (ARKF)

ARK Fintech Innovation ETF is an actively managed fund that invests in companies with the theme of Fintech innovation. The Adviser defines Fintech innovation as the introduction of a technologically-enabled product or service that potentially changes the way the financial sector works, which, ARK believes, includes transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer-facing platforms and new intermediaries. The ETF holds 26 stocks, with COIN occupying the top position at 10.8% of the assets.

ARK Fintech Innovation ETF charges 75 bps in annual fees and trades in an average daily volume of 474,000 shares. It has managed assets worth $971 million.

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ARK Fintech Innovation ETF (ARKF): ETF Research Reports

Global X Blockchain ETF (BKCH): ETF Research Reports

Coinbase Global, Inc. (COIN) : Free Stock Analysis Report

First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT): ETF Research Reports

Fidelity Crypto Industry and Digital Payments ETF (FDIG): ETF Research Reports

ARK 21Shares Blockchain and Digital Economy Innovation ETF (ARKD): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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