Why Coinbase’s Global Stock Surged Today
Cryptocurrency exchange actions Coinbase Global (PIECE OF MONEY -0.44%) were up on Wednesday, on renewed hopes that speculative investments like cryptocurrency could see improved returns in the year ahead. And it’s also thanks to insight into Coinbase’s potential growth outside of its core business activities. As of 2:45 p.m. ET today, Coinbase stock was up 5%.
The Federal Reserve raised interest rates by 0.75% today, giving investors greater hope that the committee is getting inflation under control. The market thinks this is good for speculative investments like cryptocurrency, and it looks like Coinbase investors are slightly more bullish today than yesterday because of that.
Perhaps the most important thing today for Coinbase was its blog post regarding Coinbase Cloud. Cloud computing allows businesses to leverage incredible hardware and software without creating their own infrastructure. And that’s what Coinbase offers in the field of cryptocurrencies.
One of Coinbase’s cloud products is called Node, and it’s been available for Web3 businesses for quite some time. However, it now offers a free version of Node to developers. This allows more people to adopt Coinbase Cloud. And if those developers are successful and need a little more power, they can upgrade to an enterprise account.
Coinbase Cloud is a priority for Coinbase because it can diversify its revenue away from cryptocurrency transaction fees. Revenue from this segment of the business is recorded in Coinbase’s Other Subscriptions and Services Revenue segment. In the second quarter of 2022, this segment generated revenue of $21.8 million, up 66% year-over-year and a clear testament to its progress. However, it also accounted for less than 3% of total revenue, showing that Coinbase still has a long way to go.
Jon Quast has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Coinbase Global, Inc. The Motley Fool has a Disclosure Policy.