Do Coinbase’s recent financials mean something for other crypto-exchanges

American crypto-exchange Coinbase has revealed its performance stats from the third quarter of 2022. The numbers shared by the exchange painted a rather grim picture of its financials. 

$545 million loss in Q3

The exchange managed to bring down its losses by 50% QoQ, but the figure still remains troublesome. The 44% decline in transaction revenue was somewhat offset by a 43% hike in subscription and services revenue. However, those figures were dwarfed by the whopping $1.1 billion in operating expenditure. 

Poor macroeconomic conditions and a dramatic fall in trading volume have been identified as the reason for the exchange’s relatively poor performance in Q3. 

The lack of regulatory clarity has also been blamed for the company’s poor performance in Q3. As per the report, the lack of proper regulations is pushing retail clients towards unregulated and non-U.S exchanges. 

What is $COIN upto?

A quick glance at Coinbase’s financials yields considerable concerns about its share price. Interestingly, the stock is poised to open almost 5% higher than yesterday’s closing price. A deeper look at the aftermarket performance of the stock revealed that the initial reaction to the earnings call was negative, which led to a dip of as much as 4%. However, the stock soon recovered on the charts.

The earnings call was not all bad, however, which may have something to do with the day’s projected opening price. For example, the overall assets on the platform have gone up $5 billion, compared to Q2. 

In terms of corporate ventures, Coinbase has managed to team up with industry leading companies. The exchange had announced a strategic partnership with Google Cloud last month. This venture will enable Google customers to pay for their services via certain cryptocurrencies.

The company also announced a partnership with investment giant BlackRock earlier this year in August. This venture will provide BlackRock’s institutional clients direct access to cryptocurrencies through Coinbase Prime. 

How are other exchanges doing though?

Well, CNBC published a report in August, one which outlined the financials of fellow crypto-exchange FTX. While the company is not yet public and financial statements are hard to come by, internal documents revealed that the exchange raked in $270 million in the first quarter of 2022. 

According to CNBC, FTX was on track to bring in almost $1.1 billion by the end of this year. It is unclear how the events that transpired in Q2 have impacted this projection.