Coinbase shares rose 7% as investors bet on the crypto after the Fed cut rates

The recent rise in Coinbase’s share price represents a significant rebound from last September, when shares fell as low as $76 ahead of the criminal trial of cryptocurrency fraudster Sam Bankman-Fried.

Despite falling 13% in June and suffering its worst week of the year in August, Coinbase has bounced back, in part, thanks to increased trading revenue. In the first quarter of 2024, Coinbase reported $1.2 million in transaction revenue, nearly equivalent to the entire year of 2023. Trading volume increased significantly on the platform compared to last year, signaling a resurgence of users.

It remains unclear whether Coinbase will be able to maintain these gains, but as of Friday, shares remain around $169.

Much of Coinbase’s revenue comes from trading fees, which often makes it a good indicator of the crypto-economy as a whole. Microstrategy, a cybersecurity firm whose CEO pivoted to make the firm the largest corporate holder of Bitcoin, saw its stock gain this week, rising about 8% and holding steady. Meanwhile, the price of Bitcoin has risen about 10% in recent days, briefly reaching $64,000 on Friday morning.

All this comes a day after Jerome Powell, head of the Federal Reserve, announced long-awaited cuts in benchmark interest rates. The decision to cut rates by half a percentage point exceeded the expectations of some analysts who assumed the Fed would opt for a more modest cut.