Coinbase has released its quarterly report and it has been a disappointing one.
The exchange’s trading volumes fell nearly 44% between January and March.
Crypto markets were largely range-bound for the first quarter with low opportunity for short-term traders, which resulted in FX volume falling. Coinbase generates up to 85% of its revenue from transaction fees, which are above the industry average, so this drop directly affected its profit for the period.
According to the Financial Times, the Company reported a net loss of $430 million.
Coinbase Revenue Slump
Revenues fell 35% year-on-year to $1.16 billion, well below analysts’ expectations of about $1.5 billion. The firm blamed falling crypto markets and increased volatility in 2022. The firm is still quite optimistic.
We believe these market conditions are not permanent and we remain focused on the long term.
Revenue from transaction fees continues to make up the lion’s share of 87% overall. The rest came from subscriptions and services.
The monthly transaction user (MTU) figure has dropped to 9.2 million. Even lower than analyst expectations. CEO Brian Armstrong said that there will be one billion crypto users in the next decade.
Transaction volume on the platform fell from $547 billion in the fourth quarter of 2021 to $309 billion for the first quarter of 2022. Only 24% of this total were retail traders and the vast majority were institutional. It reported that corporate trade volume was $235 billion, down 37% from Q4.
The number of assets on the platform also fell 8% from $278 billion to $256 billion for the period. “The sequential decline was driven by lower crypto-asset prices and was partially offset by billions of dollars in net inflows,” the report said.
COIN Slumps to ATL
Coinbase stock slumped to an all-time low. COIN is down 16% in after-hours trading on Tuesday, after falling nearly 13% in the regular session.
The share price fell 84%. It fell from $400 to $61.55.
Crypto markets have lost 50% of their value. Its total market cap is now at $1.47 trillion, a ten-month low.