Coinbase has announced its financial returns for the second quarter of 2022. In the financial statement, the crypto exchange posted a loss of more than $1 billion to end the quarter. According to its statement, the second quarter was fast and furious as the major crypto market witnessed a drastic fall. This is largely thanks to the massive fall in the price of numerous digital assets, with most registering double-digit losses.
Coinbase sees a 30% drop in trading volume
Aside from the cryptos in the market registering losses, there has been little enthusiasm from traders, as evidenced by the trading volume and revenue from transactions recorded by firms. Also, this is the second quarter in a row that Coinbase’s earnings will take a tumble in the red.
Notably, this is the most significant loss the crypto exchange will experience since it went public on Nasdaq over the last year. According to the company, the results of this second quarter were largely different from what analysts predicted. The shareholder letter the company sent noted that Coinbase had a hard time coping with the market downturn as the company saw little or no consumer patronage since it started.
Analysts give an opinion on the platform’s financials
In the letter, Coinbase noted that trading volume took a massive downturn by 30%, with trader transactions following, in the same way, to register a fall of 35%. The letter mentioned that the behavior was influenced mainly by the market factors, which have remained that way until now. Although the firm has seen a massive drop in user transactions, analysts believe things could change for the best in the coming months. This is because most of the users on Coinbase are not withdrawing their funds but rather hedging them during this period.
Coinbase recorded an $800 million revenue, which meant it saw a sharp 45% fall compared to the last quarter. The exact figure represents a massive fall of 153% compared to the yearly quarter. However, the firm has assured stakeholders that all is in place to cushion the effect of the market fall. In order to achieve that, the firm has cut a part of its staff amid other efforts in the last few months.
Coinbase also mentioned that it would take other approaches like lowering expenses in the next year as it remains unknown whether the dwindling market will have or when it will be over. However, analysts have maintained that although the firm is trying to enter back into the green zone, it will take more than cutting costs in the nearest months.
Source: https://www.cryptopolitan.com/coinbase-records-1-billion-loss-in-q2/