Coinbase has posted a staggering $1.1 billion loss in the 2nd quarter of 2022. This is the company’s biggest since it got listed on Nasdaq in 2021 April. The reasons for such a huge loss are cited as the quick and furious downturn taken by the crypto markets. Due to the precipitous downturn, Coinbase also saw a big dip in trading volumes. This in turn, led to falling revenues.
This is a consecutive loss of revenues in 2 quarters. Coinbase did agree that Q2 was a tough one to get through because of a 30% fall in trading and 35% loss of transaction revenue. Both of these metrics were heavily influenced by market activity and customer activity shifts. The drivers for these shifts were crypto credit and macroeconomic factors.
Even though transaction revenues dipped, Coinbase didn’t experience mass migration from its platform. Its users are now more passive and don’t invest in crypto as much. For the 2nd quarter, Coinbase reported its revenues as being $802 million. This is a 45% drop from the first quarter and more than a 150% drop from the same time last year.
Coinbase stated that despite the fall in revenues, the company is doing all it can to adjust to the market conditions which have been fluctuating. To improve profit margins and cut back on expenses, Coinbase laid off 18% of its workforce. It has deferred its product development activities for a while as well.
A Coinbase spokesman also said it expects current market conditions to bleed into 2022 Q3. It expects to experience a further fall in trading volumes along with user transaction revenues. At the time of this publication, Coinbase shares are worth 10.5% less and their price stands at $87.6.
