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How Coinbase will see benefits from marketing, bitcoin ETFs

Coinbase Global (COIN) shares pullback Tuesday morning after surging last week on the crypto exchange's first quarterly profit in two years. Yahoo Finance Live co-host Brad Smith breaks down his interview with Coinbase Chief Marketing Officer Kate Rouch at the NBA All-Star Weekend, taking a closer look at the company's marketing strategy and the rally around 2024's spot bitcoin ETF offerings.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[AUDIO LOGO]

BRAD SMITH: Coinbase shares are lower this morning, taking a breather after surging Friday on solid fourth quarter results. I had the chance to speak with Kate Rouch who is the Coinbase Chief marketing officer at the NBA all-Star weekend in Indianapolis. This is what Kate Rouch had to say about the role that marketing played in these results.

KATE ROUCH: So at Coinbase we've always been focused on breakthrough creativity in our marketing ever since we went with our first national television ad which was actually the Super Bowl 2 years ago.

BRAD SMITH: The QR code everybody remembers--

[INTERPOSING VOICES]

KATE ROUCH: The bouncing QR code?

BRAD SMITH: Yes.

KATE ROUCH: Exactly. And so obviously, that was a participatory campaign and ad where people could engage. And that's just really a through line we brought through to our marketing ever since, including the activation that you see behind you today.

BRAD SMITH: And again that was the CMO of Coinbase Kate Rouch. And we were speaking there really about how much the spend that Coinbase has put into marketing is actually translating into some of these figures that the company has pointed out within their highlights most recently in this past quarter where they swung to a profit investors rewarded that, I believe on the reaction we saw shares jump by about 8%.

We mentioned the breather that was taking place here today but quarterly volume traded $154 billion there and it's going to come back to retention and then also some of the other services that they continue to see customers come into namely, custodianship as well here.

- Yeah, I think that has been a theme that we've really seen play out over the last several weeks and we really saw so much hype and excitement surrounding the SEC's approval of the first spot Bitcoin ETF. We saw a lot of that being already baked into some of these prices here ahead of the actual approval. But we are starting to see more and more retail traders when you take a look at Coinbase's results.

When you take a look at Robinhood here, seeing that jump in trading activity here by individuals. They are now a bit more bullish on some of those opportunities that they're seeing within some of those bigger crypto players and then you couple that with the marketing spend.

What so many of these companies are doing names like Coinbase are getting out and they're getting more NBA fans in theory on board with crypto and investing in crypto more comfortable with that since it is still relatively new to many investors. So we're starting to see that trickle through.

And I think now the big question is whether or not they're going to be able to retain that interest given the fact that, regardless of reasons to be bullish, obviously, a lot of volatility plays out within the sector.

BRAD SMITH: Yeah. You mentioned the annexation to the NBA, of course, this was one of the first major crypto partners that the NBA saw flow in at the same time that you saw a lot of inflows into crypto back in 2021. Now some of those partnerships have waned or sunset but Coinbase that partnership still running strong.

We also had the opportunity to speak briefly about this year for global elections. Record number of people heading to the polls and Kate was optimistic, especially considering the fact that over 80% of crypto trading happens outside of the United States.

So crypto even outside of the US could be on the ballot in certain regions where there is more focus on what the future of currency looks like as a hedge against some of their own inflationary pressures that they may be seeing in certain regions.

- Yeah. Again, the surge that we saw on Friday was extremely dramatic. So some of the losses that we're seeing today just to give back of some of the optimism that we saw pushed the price higher on Friday.

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