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Coinbase claims that Q1 is already showing improvements over Q4.
Despite recording a 5% increase in its Q3 earning, crypto exchange Coinbase Global Inc (NASDAQ: COIN) still has some negative reports to take away from its Q4 revenue. According to its earnings report, Coinbase made $605 million in revenue in the third quarter of 2022. While that is ahead of the $588 million that analysts projected, it also signals that the exchange did better than it did in the third quarter when it made $590 million in net revenue, says FactSet.
But even after beating expectations, the Q4 earnings report also shows Coinbase being lackluster in some other areas.
Coinbase Transaction Volume Drops in Q4 as User Base Continues Shrinking
According to the report, the exchange saw its transaction volume fall by over 12% to hit $322 million. And there’s more.
Coinbase’s user base has also continued to decrease in recent times. Going by the report, Coinbase claims that there were 8.3 million monthly transacting users (MTUs) on its platform during the fourth quarter. That is a massive drop from the 8.5 million MTUs it saw in the previous quarter.
Overall, revenue is down nearly 75% from what it was a year ago even as the so-called crypto winter continues to snuff the life out of crypto prices. Also, it might be surprising to know how far Coinbase has come in just a year. That is, from recording a net income of $840 million at the height of crypto adoption last year, to a net loss of $557 million.
Hope on the Horizon?
Meanwhile, it appears that Coinbase may now have something to cheer about and look forward to in the new year. Just like Bitcoin (BTC) prices, Coinbase shares have surged by significant amounts in 2023 so far. As of publication, they are up 78% in the year running already.
Sharing its anxiety, Coinbase disclosed in its shareholder letter that crypto markets are picking up. The firm also claims that Q1 is already showing improvements over Q4 as the company has been able to make $120 million in transaction revenue. That is for January alone.
Nonetheless, the firm warned investors to not be too drawn by these results. The exchange reminded investors how last year taught everyone that markets can change at any time.