Coinbase publishes results even worse than expected
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The volatility of Coinbase results is on a par with that of cryptocurrencies. The main US crypto exchange posted a record loss of $1.1 billion in the second quarter. A year ago, it posted a profit of 1.6 billion. The spectacular deflation of the 2.0 financial asset bubble has caused valuations and trading volumes to plummet.
The platform’s revenue plunged 61% last quarter to $808 million, disappointing market analysts who had expected stronger activity. Coinbase also spent a record amount of writedowns ($446 million) on its investments in the crypto sector.
The number of users continued to fold , to 9 million per month on average in the second quarter. In decline compared to its competitors, the company does not foresee a return to better fortune in the immediate future. It estimates that for the full year, the average number of monthly users should remain between 7 and 9 million.
Excess
In a letter to its shareholders, the company called the market downturn “fast and furious”. The rise in interest rates purged the excesses of recent years in a few months. The bottom of the market was reached in mid-June, after the system collapsed Terra Luna and the specialized hedge fund Three Arrows Capital . Bitcoin and ether (the two main cryptos) have lost more than 70% in 7 months, falling respectively from records around 67,000 and 4,800 dollars in November 2021 to 18,000 dollars and 900 dollars in mid-June.
This crypto “winter,” as the company calls it, led to Coinbase cutting its workforce by 18% last June. At that time, the share price had fallen by more than 85% since the IPO in April 2021. Very volatile, the Coinbase share rebounded by 34% in July thanks to the summer “rally”. steps. And even took more than 20% in a single session, at the beginning of August, on the announcement of a partnership with BlackRock . The announcement of disappointing first-half results was accompanied by a drop in share prices of more than 10%.
Coinbase’s reputation was damaged recently by the indictment of a former executive in a case of insider trading . The platform has also confirmed that the US market watchdog, the Securities and Exchange Commission (SEC), has sent a request for information about its listing process, but the company does not know if this will lead to a formal investigation. It is suspected of offering unregistered securities for trading.
S.Ro.
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