Coinbase revenue higher than expected, but trading dries up

Like any business, crypto exchanges have revenue. These trading platforms derive an important part of their revenue from the trading commissions they charge for each transaction, which means they earn more when the prices of cryptocurrencies are high. Ook Coinbase is having a hard time, according to the latest quarterly figures.

Coinbase keeps losing, volume drops

Yesterday, the company has been quarterly figures of the fourth quarter and all of 2022. The company lost in the fourth quarter $557 million, and lost $2.625 billion in 2022.

In 2022, turnover halved, which we can blame on the sharp drop in prices. Still, fourth quarter sales increased from $576 million to $605 million. Investors expected a loss of $2.52 per share, but in reality it turned out to be $2.46 per share. The fall is therefore less hard than expected.

The trading volume and turnover from this also decreased compared to the third quarter, by 12% to be precise. Compared to the same period in 2021, volume was down 50%, and revenue from trading volumes was down 66% last year.

The crypto exchange’s subscription services accounted for half of its revenue in Q4, when this segment grew by 34%. So the problems at FTX did not only bring bad news.

Coinbase Complains About Poor US Regulation

The company is also suing US regulators. Their policies would backfire. For example, Coinbase CEO Brian Armstrong has already warned policymakers against banning crypto staking, which he would be “delightful” to defend.

This is reflected in the latest letter to shareholders. “Coinbase’s staking services are none [ongeregistreerde] securities, USD Coin (USDC) is not a security. The list is long,” the company statement reads. Coinbase co-designed USDC with Circle, and its quarterly figures show it has quite a few USDC tokens on its balance sheet.

Armstrong also criticizes the US government for its lack of clear regulation during its quarterly earnings presentation. Elsewhere worldwide there is increasing clarity, according to the CEO, including in Europe, the United Kingdom and Brazil. Lobbying will be his top priority, the CEO hints.

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