Crypto Analytics

Coinbase Trading Volume Plunges as ‘Crypto Winter’ Hits

Coinbase’s trading volume fell more than 40 percent in the first quarter as worse-than-expected earnings and a bleak outlook underscored the fallout from the crypto bear market.

Shares of the largest U.S. cryptocurrency exchange fell more than 15 percent in after-hours trading after the company reported $430 million in net losses, far more than the $47 million expected by Wall Street analysts.

Revenue fell 35 percent year over year to $1.2 billion, falling short of analysts’ expectations of $1.5 billion.

The company, which went public in April 2021, made a “continued . . . Trend of both lower crypto asset prices and volatility that started in late 2021,” adding, “We believe these market conditions are temporary and we remain focused on the long term.”

Trading volume fell 44 percent sequentially, which was “in line with the broader crypto spot market.”

Bitcoin, the most popular cryptocurrency, has more than halved in value since its mid-November peak during what has been dubbed “crypto winter.”

The results stand in stark contrast to Coinbase’s previous gains during last summer’s bull market, when second-quarter gains outperformed those of the largest, more established exchange operators, including the CME Group of Chicago and Intercontinental Exchange.

In response, Coinbase has sought to diversify its business, launching a non-fungible token marketplace last week to challenge the lucrative marketplace set up by startup OpenSea. It has also explored other offerings such as crypto derivatives.

In its outlook, the company said that crypto asset volatility and crypto asset prices declined in April, and it expects users and trading volume to decline in the current quarter compared to the first quarter.

It signed its shareholder letter with #wagmi — an acronym for “we are all gonna make it,” popular in the crypto community.

Source: Crypto News Austria

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