According to Bloomberg News, Coinbase Global Inc. shares fell following the first-quarter revenue missed the estimates. After the biggest US cryptocurrency exchange has warned that the total trading volume in the present quarter might be lower than what it was in the first.
More on the fall
The company’s shares have dropped by about 16% after the closing of regular trading. Every month, the users transacting declined to 9.2 million, much below an estimate of 9.5 million. Revenue in the first quarter slid to $1.17 billion, whereas the analysts had anticipated revenue of $1.48 billion as per Bloomberg data.
Results of Coinbase poured in amidst speculation of the sell-off of assets ranging from stocks to the cryptos across the global markets. Bellwether Bitcoin is down by more than 50% since it peaked in November, causing many traders to get pushed to the sidelined.
The bulk of revenue earned by Coinbase is from its trading fees, and the shares of the company had plunged to an all-time low, which is down by more than 70%, from the point where it traded when the company became public one year ago.
Coinbase dwindles
Coinbase made its debut one year ago, in the junk bond market witnessed its notes dropping secondary. According to Trace pricing, the $1 billion of bonds fell 5.5 cents due in 2031 to 66.5 cents on the dollar.
Coinbase expects that the total trading volume and the number of users transacting every month in the second quarter might be lower than in the first quarter. However, its outlook for 2022 will remain largely the same. A prolonged bear market will also see the company continue managing its full-year potential adjusted Ebitda losses to approximately $500 million, as stated in an investor letter.
Bloomberg News reports that Coinbase is diversifying its business and minimizing its dependence on trading fees. Its staking product allows users to put their coins into special yielding accounts and has continued to gain traction. The company is working to introduce crypto derivatives. Last week, the company opened the new marketplace for nonfungible tokens, which is essentially digital art connected to blockchain, to all users.
There is increasing pressure in the crypto market. Blockchain.com is considering going public. Decentralized exchange Uniswap is seeing volumes that are pretty close to Coinbase. Binance, which is the largest cryptocurrency globally, had agreed to provide $500 million in Elon Musk’s Twitter Inc funding.
Coinbase is expecting to re-launch in India soon after encountering problems, as revealed by Brian Armstrong, the Chief Executive Officer, in a call.
