Coinbase’s loss narrows while revenue rises more than forecast

COINBASE Global’s third-quarter loss narrowed and revenue increased more than forecast as the largest US crypto exchange sought to weather an industrywide decline in trading activity.

Revenue increased 14 per cent to US$674 million, compared with a forecast of US$654.7 million by analysts surveyed by Bloomberg. Trading volume was US$76 billion, lower than a forecast of US$80.4 billion. The net loss narrowed to US$2.3 million from US$545 million in the year-ago period, the exchange said in a shareholder letter on Thursday (Nov 2).

Coinbase benefitted in part from greater contributions from its partnership with Circle in the USDC stablecoin, which earned more interest income on its reserves thanks to rising interest rates. It was still a seventh consecutive quarterly loss in the wake of the collapse in crypto prices from the highs seen in late 2021. The US Securities and Exchange Commission (SEC) sued the firm in June for allegedly running an illegal exchange, broker and clearing agency.

With trading volume down, Coinbase chief executive officer Brian Armstrong has sought to to provide a variety of services to customers, including those seeking to offer exchange-traded funds (ETFs) that invest directly in Bitcoin. The company is also expanding its derivatives business, letting eligible US customers trade crypto futures for the first time this week.

Coinbase’s shares have more than doubled this year, tracking the rebound in Bitcoin that is largely being spurred by expectations the SEC will sign off on ETFs in the coming months. BLOOMBERG