Coinbase Could See Sliding Revenues as Crypto Market Struggles


Coinbase Global, Inc. (COIN) is the second-largest cryptocurrency exchange in terms of trading volume. Recently, it seems to have faced a loss in revenue during the fourth quarter as a result of a drop in transaction revenue and a lack of movement in crypto prices for almost a year.

Key Takeaways

  • Coinbase It is expected to report an EPS of -$2.48, down from $3.33 in the same period the previous year.
  • Revenue Most likely fell more than 75%, dropping to $588.6million.
  • Coinbase’s Due to a slump in cryptocurrency prices, and the collapse of FTX, trading volume decreased throughout 2022.
  • The The company was also dealing with regulatory issues, including a $100m penalty from U.S. regulators due to compliance issues.

Coinbase According to estimates, it is likely that the fourth quarter will see a loss in value of $568.1million. This is a decrease compared to the previous year’s profit. Visible Alpha. Earnings Per share (EPS) is forecast to be at -$2.48 Revenue The likely dropped by more than three quarters, to $588.6 millions, the lowest in two decades.

Trading volume on Coinbase’s The exchange platform decreased each quarter in 2022 because investors stayed away from cryptocurrency during a market downturn. The High-profile crash of the FTX Exchange in November This caused investor anxiety to spike over the possibility that their money could be gone for good if other exchanges were to experience similar catastrophes.

Coinbase Towards the end of last year, there were also growing regulatory concerns. In JanuaryThe firm reached an agreement with New York For compliance issues and Know Your Client (KYC), regulations, they were fined $100,000,000.

Coinbase There is one positive aspect, however. Despite being a major exchange with a good reputation for trustworthiness and trading volume, the decline in trading volume slowed down in the last months of the year during the FTX crisis. Volume It has increased on Coinbase’s Platform this year, while other exchanges like Kraken Gemini The company has been negatively affected, but this will not be reflected in the financial report.

Shares Of Coinbase rallied early in 2023 as the price of cryptocurrencies rose, but the stock remains down 66% over the last year, compared with a 10% drop for the S&P 500 Information Technology Index.

Source: TradingView.

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