Coinbase blames sagging crypto volumes as revenue plummets
Coinbase suffered sharp declines in revenues and trading volumes in the third quarter, as the washout in bitcoin and other digital assets have reversed the fortunes of the once fast-growing cryptocurrency exchange.
The US-listed company acknowledged “another tough quarter” as it reported net revenue of $576mn, down from more than $1.2bn a year before and from $803mn in the previous quarter. Coinbase lost $545mn in the quarter, compared to a net profit of $406mn a year before.
The plunge in crypto markets earlier this year continue to take their toll on trading venues such as Coinbase. Tokens like bitcoin and ether have lost about 70 per cent of their value since their all-time high last year. Trading volumes and monthly transacting users at Coinbase dropped by 27 per cent and 6 per cent, respectively, from the second to the third quarter.
Earlier this week Coinbase chief product officer Surojit Chatterjee said he was stepping down, saying “now it’s time to get off the ride and catch my breath”. Chatterjee will continue to serve as an adviser to Armstrong.
Coinbase also cited “macroeconomic factors” and “geopolitical factors” — including the war in Ukraine — as weighing heavily on financial and crypto markets.
“Crypto tried to distance itself from the mainstream economy, making claims that bitcoin was a hedge against inflation and that crypto would continue to exist almost in its own bubble,” said Charley Cooper, managing director at blockchain group R3. “I do think it’s important to put into context that the crypto world is increasingly impacted by the broader world of economics.”
This story originally appeared on: Financial Times - Author:Scott Chipolina
