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The Crypto market has witnessed a lot of bearish trends lately, with an impact on a lot of crypto-related entities. And amidst the current constant decline in the crypto asset prices and low activity. Will Nance, the Goldman Sachs analyst has brought into the limelight two names that have suffered due to the changing market dynamics but are about to further get affected by the long and harsh crypto winter.
Coinbase, the significant crypto exchange which grew significantly after its existence in 2012, has continued to do so over the years. But things turned upside down amidst the crypto winter which is reflected in the exchange’s recent quarterly results for Quarter one 2022.
As its revenue plunged by 27% year by year to $1.17 Billion. The entity also reported a net loss of $430 Million. The quarterly trading volume came down from $547 Billion in Quarter four 2021 to $309 Billion in the recent quarter. The Monthly transacting users (MTUs) slumped by 19%.
The analyst highlighted that they think the current crypto asset levels and the trading volumes signify further degradation in the COIN’s revenue base, which they see plunging by -61% year by year this year. And that while it recently announced a considerable reconstructing, and laid off 18% of its personnel, they think more such cuts are required.
Robinhood is another trading platform but it also facilitates the trading of ETFs and stocks. The platform also saw significant growth with time, but it was not left untouched by the post-pandemic issues.
This was highlighted in the quarter one results when revenue reached $299 Million, which was lower than what Wall Street expected. Furthermore, the transaction-based revenues also fell by 48% to $218 Million which was $420 Million last year at the same time. The exchange also went public in 2021.
Nance here highlights that the basics are still quite weak for Robinhood, as is the constant falling of retail trading. And for the longer term, they think that it needs to witness progress on more recurring revenue streams and a return to users’ growth and engagement levels for the shares.
It is indeed true that this crypto winter has left a lot of entities with severe colds and cough. It is to look forward to how the impacted entities would recover amidst the constant downtrends.
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With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
