Coinbase May Say Losses Narrowed on Cost Cuts, Higher Interest Rates

investopedia.com:

Coinbase (COIN), the largest U.S.-based crypto exchange, likely will say losses narrowed in the first quarter of 2023 as aggressive cost cuts offset tumbling revenue.

Coinbase is expected to report a first-quarter net loss of $329 million, or $1.38 per share, compared with a $429 million loss, or $1.98 a share, in the same quarter a year ago, according to analysts' estimates compiled by Visible Alpha. Total revenue at the company is forecast to slip to $651 million from $1.16 billion as demand for crypto assets slows.Coinbase will report its first-quarter earnings after markets close on Thursday.

Investors will be interested in the impact of Coinbase's cost-cutting measures, including its decision in January to lay off 950 employees, or about 20% of its workforce.Analysts expect the company to report it incurred $155 million in restructuring costs last quarter as a result of the layoffs. The company's total cost of operations is forecast to fall 42% from last year.

Investors will also be looking for signs of any damage from the panic that gripped regional banks last quarter. When Silicon Valley Bank collapsed on Friday, March 10, USDC stablecoin issuer Circle disclosed that it had $3.3 billion of funds backing the stablecoin deposited at the failed bank.Subsequently, USDC lost its peg to the U.S. dollar as investors made for the exits.

Coinbase paused redemptions over the weekend and by Monday USDC had regained its USD peg, but USDC redemptions continued.The stablecoin's market capitalization has fallen to $30 billion from $44 billion at the beginning of the year.

Dwindling USDC deposits could hurt Coinbase's interest income, which has been something of a saving grace through this crypto winter. In the fourth quarter,