By
Steve Muchoki
April 19th, 2024
Per the filing, the October trading volume was $47 billion. Meanwhile, revenue from retail transactions amounted to $346.1 million.
Coinbase (NASDAQ: COIN) has published a financial statement detailing its Q3 2022 earnings and revenue. According to the report, the company has been severely impacted by macroeconomic and geopolitical conditions which have made the crypto market bleed.
Consequently, the trading volume of top earners like Bitcoin and Ethereum has gone down. In the concluded quarter, Bitcoin accounted for 31% of the trading volume whereas Ethereum accounted for 33%.
According to the report, Coinbase’s monthly transacting users (MTUs) in the quarter exceeded the estimates. After 9.2 million users in the first quarter and 9 million in the second quarter, analysts estimated $7.84 million, according to StreetAccount. However, the company pulled 8.5 million MTUs for the quarter. Coinbase projects that its average MTU at the end of the year will be below 9 million.
Per the filing, the October trading volume was $47 billion. Meanwhile, revenue from retail transactions amounted to $346.1 million. While the company’s revenue was only $590 million as against an estimated $654 million by analysts, it amounted to a 50% loss from its equivalent last year. Also, the firm lost $2.43 per share as against $2.40 by analysts.
Following another poor quarter, Coinbase chief product officer Surojit Chatterjee announced he was stepping down. While Chatterjee will continue to advise the CEO Brian Armstrong, product directors will now report directly to the CEO.
Coinbase to Be More Cautious
After the setback earlier in the year, Coinbase admitted the firm grew too fast, ending 2021 with over 3700 staff. However, after the market nosedived in 2022, the company scaled back on recruitment. It also cut a fifth of its workforce, resulting in about 1000 job cuts.
Coinbase said that in the fourth quarter “we expect lower trading volume and a similar number of MTUs compared to our Q3 results.”
For next year, the company noted that it was going to be conservative in its approach as it expects the macroeconomic conditions that have dragged down the market to continue. While the company remains optimistic, it plans to approach with caution, operating within its $500 million ‘loss guardrail’ determined for the year.
Despite the setbacks, Coinbase partnered with BlackRock in August to allow seamless market entry for institutional investors. There are suggestions that institutional interest remains strong in the market despite the current downturn.