On Thursday, the cryptocurrency exchange Coinbase revealed its third-quarter revenue fell short of analysts’ expectations and had a larger-than-expected loss.
As traders & retail investors abandoned the crypto market due to the ongoing bearish trend, revenue fell more than 50% from a year earlier. Financially, the company suffered a loss of $545 million but initially, it had made a profit of almost $400 million the year before.
Coinbase in its investor letter said:
“Transaction revenue was significantly impacted by stronger macroeconomic and crypto market headwinds, as well as trading volume moving offshore”
The number of users on Coinbase has decreased throughout the year. In comparison to the prior quarter’s 9 million users and the first quarter’s 9.2 million, the company reported having 8.5 million monthly active users during the third quarter. 7.54 million were anticipated by analysts, according to StreetAccount. As per Coinbase, its monthly user count will be “just below” 9 million for the entire year.
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At the time of market close, the Coinbase (COIN) stock fell by 8% but increased by 5% to $58.65 in after-hours trading. Compared to Bitcoin’s nearly 56% decrease, the price of Coinbase shares has fallen by more than 75% this year.
After making its stock market debut last year, Coinbase increased its employees & manpower to keep up with the burgeoning interest in cryptocurrencies and the need for crypto trading tools.
But in 2022, the trend dramatically changed, requiring the business to reduce its headcount. Coinbase announced in June that it would be slashing more than 1,000 full-time positions or 18% of its workforce.
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