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Netflix Add Subscribers As Bitcoin Falls Amid Fed and DOJ

In the fourth quarter of the year, Netflix saw a surge in subscriber growth, exceeding expectations set by Wall Street analysts. This led to a significant increase in the company’s stock prices in the stock market, despite a shortfall in earnings. 

The company’s Co-CEO, Reed Hastings, announced that he will be stepping down from his role and will be appointed as executive chairman. 

As a result, Greg Peters, the current COO, will take on the role of co-CEO along with Ted Sarandos.

The company reported EPS of 12 cents per share, missing the expected 45 cents per share according to Analysts. However, revenue was in line with expectations, coming in at $7.85 billion as per analysts survey. 

The highlight of the earnings report was the addition of 7.66 million global paid net subscribers, which was significantly higher than the expected 4.57 million subscriber additions as per StreetAccount estimates.

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Company’s Margins Increase

The company’s EPS fell short due to a loss stemming from debt denominated in euros. However, the company’s margins of 7% exceeded expectations set by Wall Street. 

The decline in value of the U.S dollar relative to the euro in Q4 did not affect the company’s operations and should not be considered as an operational loss.

This earnings report marked the first time that Netflix’s new ad-supported service was included in its financial results. 

The company introduced a lower-priced tier in November, but has not yet revealed the proportion of new subscriptions that have opted for this service. During the pre-recorded earnings call, Netflix stated that it has observed similar levels of engagement from the users of its new ad-supported service as it has from its regular subscribers. 

Furthermore, the company noted that it has not seen a significant number of users switching from its more premium and expensive plans to the cheaper ad-supported option. 

This suggests that those who subscribe to Netflix’s premium offerings are not frequently opting for the cheaper ad-supported model, and may not be affected by the changes in the fore market.

Bitcoin Price Hovers Around $20,000

The price of Bitcoin (BTC) experienced a significant drop on Wednesday, falling from a four-month high of around $21,550 to $20,600, a decline of nearly 2.6%. 

This rapid decline in the value of Bitcoin has caused more than $107 million to be liquidated across crypto derivatives markets. 

The main causes for this drop were attributed to several factors. Firstly, the U.S. Department of Justice (DOJ) announced a major international crypto enforcement action, which may have caused uncertainty in the market. 

Secondly, comments from St. Louis Federal Reserve President Jim Bullard, who suggested that the central bank should hike interest rates by 50 basis points at its next meeting in February, higher than market expectations for a 25 basis point move, also contributed to the decline. 

Additionally, the decline in Bitcoin’s value also coincided with a decline in the major U.S. stock market indices, with the Dow Jones Industrial Average leading the decline with a 1% drop. 

Other cryptocurrencies such as Ether (ETH) also experienced a decline, falling by 4% to $1,511. 

Companies in the crypto-related stocks also saw decline, with Coinbase (COIN) down 4%, Marathon Digital (MARA) down 17%, and MicroStrategy (MSTR) down 11%.

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.