Shares of Coinbase (NASDAQ: COIN) shot up 65% in November, according to data from S&P Global Market Intelligence. The cryptocurrency platform and market exchange posted disappointing earnings but saw its share price rise after the Trump victory in the United States presidential election. Crypto prices soared, an action that usually coincides with trading volume and leads investors to pile into Coinbase stock.

Here's why Coinbase stock soared in November.

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Weak earnings, saved by a crypto election

Third-quarter earnings were underwhelming for Coinbase. The company posted $1.21 billion in revenue and earnings per share (EPS) of just $0.28, both of which were below analyst expectations. Revenue is still below the $7.5 billion peak in 2021, with cryptocurrency prices down below highs for most of 2022, 2023, and 2024.

That all changed with Trump's victory in the recent presidential election. The incoming president and his administration are seen as beneficial to Coinbase. Why? Because there have been indications that they will loosen regulations within the crypto market, Trump is being considered a pro-crypto president. Bitcoin and other cryptocurrencies soared on the result, with Bitcoin skirting a price of $100,000 a coin. Coinbase earns revenue when people trade cryptocurrencies, buy its stablecoin, and generally engage with the platform. As crypto prices rise, there is usually a correlation to customers' usage on the platform, which is why Coinbase stock rose so much in November.

What's more, the head of the Securities and Exchange Commission (SEC), Gary Gensler, said that he will be retiring from his role in 2025. Gensler was very stringent on the crypto industry, meaning his departure could bode well for companies like Coinbase.

A big bet on future growth

With a market cap of $77 billion, buying shares of Coinbase today is a bet on future growth for the company. The stock currently trades at a price-to-earnings ratio (P/E) of 52, which is close to double the S&P 500 average of 30. Earnings should grow if this crypto rally continues, but they will assuredly fall if crypto prices fall (as has happened before).

At the end of the day, buying Coinbase stock means that you believe cryptocurrency prices will keep rising -- especially with its elevated market cap and P/E ratio. I personally don't have a conviction on what direction cryptocurrency prices will go, but if you do, you might want to buy the stock.