Coinbase posts $1.1B loss in Q2 on 'fast and furious' crypto downturn
Crypto exchange giant Coinbase has cited a "fast and furious" downturn of the crypto markets as the reasons behind a staggering $1.1 billion net loss in the second quarter of 2022, which also saw trading volume and transaction revenue tumbling.
It's the second consecutive quarter of loss for the crypto company and the largest loss since its listing on the Nasdaq Stock Exchange (Nasdaq) in April 2021.
The results, which also missed analyst expectations, were shared in a Q2 2022 Shareholder Letter from Coinbase on Aug. 9, stating:
Coinbase said that Q2 was a “tough quarter” with trading volume falling 30% and transaction revenue down 35% sequentially.
“Both metrics were influenced by a shift in customer and market activity, driven by macroeconomic and crypto credit factors alike," it wrote.
Despite the drop in transaction revenue, Morningstar equity analyst Michael Miller told Reuters in a report that while “Coinbase did not see a mass migration off its platform [...], its users are becoming more passive in their cryptocurrency investing”.
The crypto exchange reported $802.6 million in revenue, which was a 45.1% drop from the preceding quarter and a staggering 153.1% drop from the prior-year quarter. Its net loss, which amounted to $1.1 billion, was mainly driven by $446 million in non-cash impairment charges caused by lower crypto asset prices in Q2.
However, Coinbase wrote that despite the economic downfall, the company is doing its best to adjust to fluctuating market conditions:
In order to cut expenses and improve profit margins, Coinbase cut 18% of employees in June, and has also taken a “pause, maintain and prioritize” approach toward product development:
Among those products being prioritized include Coinbase’s Retail
Read more on cointelegraph.com
