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Coinbase Shares Fall as Crypto Winter Collects Fees on Exchange Trading Volumes

The company has been facing earnings difficulties, although prices have stabilized recently and the company has just reached an agreement with BlackRock.

Shares of Coinbase Global (COIN) fell about 5% after the crypto exchange said trading volumes dropped significantly in the second quarter.

Customer trading activity totaled $217 billion during the period, down from $309 billion in the first quarter of this year, according to a shareholder letter published Tuesday. Coinbase’s overall revenue came in at $803 million, missing the average analyst estimate of $873.8 million, according to data compiled by FactSet.

Shares of Coinbase have tumbled since its IPO last year as shifts in the crypto and equities markets slowed retail trading, forcing the company to cut jobs and focus on control. cost. Even so, even in the current crypto winter, Coinbase continues to push towards its goal of being a one-stop shop for crypto trading. Last week, it announced a partnership that will allow customers of BlackRock — the world’s largest asset manager, with $10 trillion — to trade cryptocurrencies through Coinbase.

While we do not take the drop in volume market share lightly, the Q2 volume shift towards high-volume retail traders, market makers, and exchanges High-frequency translation has not generated a corresponding revenue impact for Coinbase, as these customers trade high volumes but generate low fees,” the company said.

Wall Street analysts don’t expect a boom in the past quarter from Coinbase, although crypto prices have stabilized recently, which may lead some to ponder whether the second quarter marks a low point. for cryptocurrency exchanges or not.

Q2 was a test of endurance for crypto companies and a complicated quarter,” Coinbase said.

The exchange posted a net loss of $1.1 billion in the second quarter, compared with a loss of $430 million in the first quarter. Additionally, Q2 adjusted Ebitda posted a loss of $151 million compared to a gain of $20 million in Q1.

Coinbase said the results were “heavily influenced by non-cash loss fees” stemming from crypto and venture capital investments.

Regarding the SEC’s securities investigation, Coinbase said it was uncertain whether it would translate into a formal investigation. “[We] are committed to productive discussions with the SEC on crypto assets and securities regulation, and work together with all policymakers to develop a workable regulatory framework for The crypto-economy aims to address any area of ​​risk, while enabling the development and adoption of digital innovation for the benefit of wider society.”