Crypto Analytics

Coinbase Stock Plunges as Crypto Exchange Posts $430M Loss

  • Coinbase missed analyst estimates for first-quarter revenue
  • The exchange said broader market conditions were to blame, but it wasn’t afraid of a bear market

Cryptocurrency exchange Coinbase reported revenue of $1.17 billion in the first quarter, missing analyst estimates. Shares fell 12% in after-hours trading.

“It’s worth just addressing the elephant in the room, which is that the broader markets are naturally down,” Coinbase CEO Brian Armstrong said during the company Result call Tuesday.

“We tend to do our best work in downturns, so ironically I’ve never been more optimistic about where we stand as a company.”

Coinbase monthly active users fell to 9.2 million, below the Street’s consensus of 9.5 million.

Total trading volume in the first quarter was $309 billion, down 44% from the fourth quarter of 2021, which the exchange attributed to market conditions. The company said it expects transactions to decline further in the second quarter, but its outlook for 2022 is “broadly unchanged.” shareholder letter Tuesday.

Of Coinbase’s Q1 revenue, $1 billion came from the exchange cutting trading fees, down 56% from the fourth quarter. The exchange has said it wants to diversify away from trading fee revenue through futures and derivatives products, prime brokerage offerings and, most recently, a subscription model with no-fee transactions.

Coinbase raised $152 million in revenue from subscriptions and services in the first quarter.

“We believe we are well capitalized with our balance sheet resources to support our operations and as Brian said, we remain focused on creating great product experiences, building our user base and preparing for the return of the market,” Coinbase said CFO Alesia Haas on the call.

The first quarter showed a continuation of a trend of lower crypto prices and increased volatility that began in the fourth quarter of 2021, Armstrong said, something the company has partially addressed.

“You can expect volatility in our finances given the price cycles of the cryptocurrency industry,” Coinbase’s 2021 prospectus states. “That doesn’t worry us because we’ve always viewed crypto adoption from a long-term perspective.”

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The post “Coinbase Stock Crashes as Crypto Exchange Posts $430M Loss” is not financial advice.

Source: Crypto News Austria

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