Coinbase efforts to cut costs have resulted in some streamlining, despite the fact that unfavorable market conditions caused revenues to fall in Q3.
Even though activity decreased due to a general market slump in the third quarter, cryptocurrency exchange Coinbase nonetheless managed to reduce its losses from the previous quarter by half.
The firm said that transaction revenue had dropped from $655.2 million in the second quarter to $365.9 million, a decrease of 44%, in its shareholder letter published on Nov. 3.
The company attributed the decline to weak macroeconomic conditions, with daily average crypto market value plummeting 30% and trading volumes shifting outside of the United States as a result of unclear legal frameworks.
Additionally, it attributed the data to an increase in retail client holdings during the bear market while advanced traders used other platforms and more complex products.
Brian Armstrong, the CEO and co-founder of Coinbase, seemed upbeat on the Q3 results call despite the dismal numbers, saying that the regulatory climate might be one of the “greatest unlocks” to the industry’s growth and might even let “prices go back up.”
“I think there’s an opportunity at some point for the crypto prices to potentially decouple from the broader macro environment. And we don’t know if that’s gonna happen, but I think it’s one of the possibilities and regulatory clarity is one of the things that could help kick that off.”
Haas said that it wasn’t their main priority and that they were trying to invest in development throughout the cycle while limiting losses, adding:
“When we’re in bull runs we’re going to make profit, when we’re in downturns we’re going to take prudent losses.”
Overall, Coinbase’s Q3 revenue was $576.4 million, down 28% from Q2; nevertheless, its net loss was $544.6 million, down 50% from the previous quarter.
According to Coinbase, the revenue decline was largely offset by a 43% increase in subscription and services revenue, which comes from its staking and custody services and interest income.
Coinbase shares (COIN) have decreased by more than 8% in the past day’s trading as a result of the company’s quarterly revenue coming in below the $649.2 million estimate from Bloomberg.
