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Earlier this week, leading US crypto exchange – Coinbase – released their Q2 earning reports. Although the report showcased that the crypto exchange lagged behind many predictions, including Wall Street estimates for Coinbase. Yet, several crypto analysts are optimistic regarding the further approaches of crypto exchange. After reviewing the balance sheet of the company, some even estimated that it is likely to easily survive through the ‘crypto winter’ conditions.
Wall Street estimated from crypto exchange that the revenue, trading volume and holding of assets like factors to perform well. However, the reports suggest that Coinbase suffered a heavy loss of overall 1.1 billion USD. A significant portion out of this loss, which is about 453 million USD, comes in the form of drop in crypto assets holdings of the balance sheet of Coinbase.
MoffettNathanson partner Lisa Ellis said during June, when crypto space was dealing with the liquidity crisis and different mentions of crypto winter until Coinbase’ Q2 earning reports release, the stock price of crypto exchange was depended upon the fact that if it has enough cash reserves or not.
Further Ellis also mentioned that the leading crypto exchange reported approx 5.68 billion USD worth cash and equivalent holdings by the quarter end. In addition to its cash reserves, it has 500 million USD worth of USDC stablecoin. Overall including all the holdings and assets, the cash reserves for crypto firms equates to 6.2 billion USD. Coinbase has no concerns around liquidity or cash crunch, she added.
Ellis also pointed out the cash burn rate of the crypto exchange where it fell by 200 million USD during every other quarter. This came after burning 1 billion USD worth cash during the first half of this year. She added that overall, the conclusion is that no matter how long the crypto winter would stay, even after the typical assumption of a couple of years, Coinbase would still be having 5 billion USD worth holdings in case.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
