Coinbase posts quarterly loss; revenue falls less than forecast
Selamat Sanwan
COINBASE Global, the biggest US cryptocurrency exchange, reported a fourth-quarter revenue decline that was less than forecast by analysts.
Fourth-quarter revenue was US$629.1 million, higher than the average analyst estimate of US$581 million. It had US$2.5 billion in revenue during the year-earlier period. The net loss in the quarter was US$557 million, while trading volume missed estimates. The company expects first-quarter subscription and services revenue between US$300 million and US$325 million.
“We expect 2023 to be a year of regulatory focus and we believe our strong foundation will make us a net beneficiary of this new environment,” Coinbase said in an investor letter.
While Coinbase has seen a pickup in trading volume — closely tied to its bread-and-butter trading fees — in recent weeks, as crypto prices rallied, it’s facing mounting uncertainty. Several of its newer businesses, such as stablecoin revenue and staking, in which users earn yields on coin deposits, may face regulatory scrutiny, after recent regulatory actions against rivals.
It’s also been losing market share, which dropped from 5.9 per cent in November to 4.1 per cent in February, according to CryptoCompare. The world’s biggest crypto exchange, Binance, has gained share, reaching nearly 60 per cent in February, according to the researcher.
Coinbase has laid off staff and reduce its areas of focus in the past year.
Coinbase’s shares have rallied by about 75 per cent so far this year as a crypto price rally ramped up trading volumes, according to Bloomberg data. BLOOMBERG
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