The crypto industry has been in the dog house for the last year, but it’s waking up — and there’s only one dog still barking: Coinbase, the US-based exchange, which is up 355% this year.

Ask for permission, not forgiveness: Coinbase’s slow and steady regulatory approach, led by CEO Brian Armstrong, has not only shielded it from the global crackdown on the crypto sector, but positioned it for unprecedented gains in the market as Armstrong’s once biggest rival sits in prison trading fish:

• FTX CEO Sam Bankman-Fried was found guilty of all charges in the collapse of the $32B exchange — which destroyed hundreds of billions in market value.
• Binance was fined a historic $4B for money laundering, including criminal charges for Founder and CEO Changpeng Zhao, who resigned as a result.

Binance’s market share has collapsed from 55% at the start of the year to 30.1% in December. Still, it remains the largest international centralized crypto exchange, even with the decline.The industry’s angst has helped Coinbase cement its US dominance and capitalize on the vacuum left by crypto’s most visible entrepreneurs.

Taking advantage of the weak

With Bitcoin up nearly 150% this year, the crypto industry will have a lot to cheer for going into 2024, including the widely-anticipated launch of the spot Bitcoin ETF and the Halving in April. And Coinbase may be best positioned to make the most of both:

• In May, Coinbase went global with the launch of its international exchange and recently rolled out spot crypto trading on Bitcoin and Ether to non-US customers.
• The exchange — which custodies nine of the 12 proposed ETFs in the US — will also directly benefit from crypto ETF approvals next year.

Forward-looking: If crypto can stay hot in 2024, renewed consumer interest and a rebound in trading activity could boost the exchange’s fortunes — but JPMorgan is cautioning that the 2024 optimism might be priced in and thinks Ethereum could outperform Bitcoin.