Coinbase trading volumes drop as ‘crypto winter’ approaches

Coinbase’s trading volumes fell more than 40 percent in the first quarter, as worse-than-expected earnings and a bleak outlook shed light on the fallout from the cryptocurrency’s bear market.

Shares on the largest US cryptocurrency exchange fell more than 15 percent in after-hours trading after the company reported a net loss of $430 million, far more than the $47 million expected by Wall Street analysts.

Revenue, most of which comes from trading fees, fell 35 percent year-over-year to $1.2 billion, missing analyst expectations of $1.5 billion.

which company audience went In April 2021, he blamed “the continuation… of the downward trend in crypto-asset prices and the volatility that started in late 2021,” adding: “We believe these market conditions are not permanent and we remain focused on the long-term.”

Trading volumes were down 44 percent from the previous quarter, which it said was “in line with the broader cryptocurrency market.” Monthly transacting users — who had an active or passive transaction in the past month — fell to 9.2 million, nearly 20 percent less than the previous quarter.

Bitcoin, the most popular cryptocurrency, has More than half in value Since its peak in mid-November during what has been dubbed the “crypto winter”.

The turmoil came as recent interest rate increases have prompted investors to flee from the most dangerous corners of global financial markets. As the enthusiasm for speculative investment has cooled, the market capitalization of the top 500 digital assets has halved from the record reached in November 2021 to $1.6 trillion, according to CryptoCompare data compiled by the Financial Times.

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Coinbase’s results stood in stark contrast to previous earnings during bull market last summerwhen its earnings surpassed those of the largest and most established exchange operators including CME Group of Chicago and Intercontinental Exchange in the second quarter.

The company said in its forecasts that volatility of crypto-assets and prices of crypto-assets decreased in April, and expected a decline in users and trading volume in the current quarter compared to the first quarter.

In response, Coinbase sought to diversify its business, launching a file Non-fungible tokens market In an effort to challenge the profitable model created by the startup OpenSea. Other offerings have also been explored, such as Cryptographic derivatives and “staking products” – a way to earn rewards for owning certain cryptocurrencies – and invest heavily in Coinbase Wallet.

Despite the bleak outlook, company executives insisted on a call with analysts that they remain unfazed by the downturn.

“We tend to see downturns as a huge opportunity because we are greedy when others are afraid,” said Brian Armstrong, CEO of Coinbase. “We tend to be able to pick up great talent during those periods—others get pivotal, distracted, and discouraged—and so we tend to do our best in the lower periods.”

The company signed its shareholder letter with #wagmi – a common acronym among the crypto community for “we’ll all make it happen.”

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