Coinbase announces a drop in revenue and a loss for the third quarter as investors pull out of the cryptocurrency industry.
The cryptocurrency exchange Coinbase reported on Thursday that its third-quarter revenue missed analysts’ projections and that it suffered a greater loss than anticipated.
Revenue decreased by more than 50% from the previous year as traders and ordinary investors left the cryptocurrency market as a result of the persistent downward trend.
The corporation lost $545 million financially even though it had initially turned a profit of roughly $400 million the year prior. In a letter to investors, Coinbase stated:
“Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore”
, Throughout the year, Coinbase’s user base has shrunk. The company reported having 8.5 million monthly active users during the third quarter, down from the preceding quarter’s 9 million users and the first quarter’s 9.2 million. Analysts expected 7.54 million, according to Streetmarket.
For the full year, the cryptocurrency exchange predicts that its monthly user base will be “slightly below” 9 million. Coinbase (COIN) shares decreased 8% as of market closing then rose 5% to $58.65 in after-hours trading. The price of Coinbase shares has dropped more than 75% this year compared to the approximately 56% decline in the price of Bitcoin.
In order to keep up with the growing demand for cryptocurrency trading tools and the expanding interest in cryptocurrencies, Coinbase boosted its staff and manpower after making its stock market debut last year.
But the pattern drastically altered in 2022, forcing the company to cut back on staff. In June, Coinbase made the announcement that it would be eliminating over 1,000 full-time jobs, or 18% of its staff.
