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Coinbase Shares Continue To Fall After The Company Reports $430 Million In Losses

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Coinbase’s share continues to fall, between January and March, the exchange’s trading volumes dropped by roughly 44% as it announced lower-than-expected earnings.

For the first quarter of 2018, crypto markets were mostly range-bound, with few chances for short-term traders, resulting in a drop in exchange volume. Because Coinbase earns up to 85% of its income from transaction fees that are higher than the industry norm, the drop has had a direct impact on its profit for the quarter.

According to the Financial Times, the company posted net losses of $430 million on May 10, much exceeding the $47 million projected by Wall Street experts.

Revenues plummeted 35% year on year to $1.16 billion, falling far short of analyst estimates of approximately $1.5 billion. The corporation blamed plummeting cryptocurrency markets and increasing volatility in 2022, but remained upbeat about the future:“We believe these market conditions are not permanent and we remain focused on the long term.”

Transaction fees still accounted for the lion’s share of total revenue, accounting for 87 percent. The remaining funds came from subscriptions and services.

Its critical monthly transacting users (MTU) figure has dropped to 9.2 million, approximately 20% lower than in Q4 2021. This was also less than the 9.5 million expected by analysts. CEO Brian Armstrong projected earlier this month that there will be a billion cryptocurrency users over the next decade.

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The platform’s trading volume declined from $547 billion in Q4 2021 to $309 billion in the first quarter of 2022. Only 24% of this total were retail traders, with the vast bulk being institutional. It claimed that institutional trading activity was $235 billion, a 37% decline from the previous quarter.

The quantity of assets on the platform also decreased by 8% throughout the period. The platform’s funds were $256 billion at the end of Q1, down from $278 billion at the end of Q4. “The sequential fall was driven by lower crypto asset values, countered in part by billions of dollars in net inflows,” according to the research.

Coinbase stock has reached an all-time low as a result of the earnings announcement that was worse than expected. COIN was down 16% in after-hours trading Tuesday, after falling approximately 13% during the regular session.

According to MarketWatch, the stock is currently trading at $61.55. It has already dropped 84% from its all-time high of moreover $400 when it went public in April 2021.