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- Crypto exchange Coinbase managed to survive through the recent crypto winter
- Company beat many estimates and performed better, but the user base declined
Recently leading US crypto exchange Coinbase dropped its earnings release which brought the insight of several crucial factors that beat estimates. From revenue to net income to loss, the numbers turned out a bit better than expected. However it’s not like everything is fine with the crypto exchange where its user base has slightly dropped.
According to the report, the company managed to meet sales worth 605 million USD during Q4 2022. Analysts believed the stats to remain somewhere around 588 million USD, the sales numbers were better than expected though.
The company generated 2.5 billion USD revenue during the similar timeframe, which is after a hefty drop of 75% from the last year. This needs to be considered that the fourth quarter of 2021 was considered as the base year for this comparison, when the crypto market was at its peak. Overall loss during the time was about 557 million USD.
Larger part of the company’s revenue depends upon its trading volume which experienced a heavy hit. From 547 billion USD trading volume previous year, it was just 145 billion USD in the recent earnings report. The figure was about 1.67 trillion during the bull run of 2021 which dropped down to 830 billion in 2022.
One of the sectors where fall might be the concern for the crypto firm is its monthly transacting users or MTUs. CNBC reported the company had 8.3 million users during Q4 2022 which was down from previous year’s more than 8.5 million.
The company expected the revenue from subscription and services for the first quarter of this year to remain between 300 million USD to 325 million USD. In addition, the restructuring expenses were said to be 150 million USD. It took a different path with diversification in its revenue streams where it made sure subscription and services fees also have a part in revenue other than the trading fees. During the fourth quarter, the exchange products managed a revenue of 200 million USD.
Given the tough year for the broader crypto market due to the crypto winter, it was not easy for crypto companies, even the prominent ones. The struggle was so tough that some of these names disappeared in the storms. This includes major firms like crypto lenders BlockFi and Celsius, crypto hedge fund Three Arrows Capital, and once a leading crypto exchange FTX also met the similar fate.
Coinbase (COIN) stock however showed movements with a slight increase of 2% during the last trading session. Currently the stock price is trading at around 62.07 USD.
The company has a recent threat from ongoing regulatory scrutiny over companies within the crypto industry. Recently SEC banned crypto exchange Kraken from offering crypto staking.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
