- Coinbase reported net revenue of US$576mn in the third quarter, down from over US$1.2 billion a year before, and US$803 million the previous quarter.
- The lack of price action has placed renewed pressure on Coinbase, which described cryptocurrency price volatility as a “key driver of our retail trading volume” in a letter to shareholders.
The washout in Bitcoin and other digital assets has reversed the fortunes of the U.S.-listed cryptocurrency exchange Coinbase as it suffered sharp declines in revenues and trading volumes in the third quarter.
Coinbase reported net revenue of US$576mn in the third quarter, down from over US$1.2 billion a year before, and US$803 million the previous quarter.
The U.S. cryptocurrency exchange lost US$545 million in the latest quarter, a sharp reversal from the US$406 million profit a year earlier against a backdrop of interest rate hikes, policy tightening and rising inflation.
While Bitcoin and Ether have both lost about 70% of their value since their all-time high last year, trading volumes and monthly transacting users at Coinbase have dropped by around 27% and 6%, respectively, from the second to the third quarter.
According to data provider CryptoCompare, average annualised volatility for Bitcoin has hit its lowest point since October 2020.
The lack of price action has placed renewed pressure on Coinbase, which described cryptocurrency price volatility as a “key driver of our retail trading volume” in a letter to shareholders.
In June, Coinbase announced it would cut nearly a fifth of its workforce, which amounts to over 1,000 employees and the exchange also rescinded job offers as part of the sharp pullback and worsening market conditions.
But it’s not all doom and gloom as the crypto industry weathers what could be a prolonged winter as Coinbase inked a deal with asset management giant BlackRock in August to give the latter’s clients more seamless access to digital asset markets.
Despite lower crypto prices, growing institutional interest in the digital asset class could provide a light at the end of the tunnel for Coinbase and the BlackRock deal could possibly help to make up for flagging retail flows.
