America’s biggest cryptocurrency exchange, Coinbase, has released its second-quarter revenue and reported a larger-than-expected quarterly loss of $1 billion amidst a drop in crypto prices and trading volumes.
Coinbase Records $1 Billion Loss in Q2
In its recently published second quarter performance, Coinbase reported a loss per share of $4.95 against the predicted $2.65. The exchange also missed its revenue estimates, reporting $808.3 million against the $832.2 million expected.
Coinbase’s net revenue declined from $2.033 billion in Q2 of 2021 to $802.6 million in Q2 of 2022, representing a drop of around 60%. This is worsened by a sharp increase in operational costs by over $500 million.
The decline in revenue amplified by the crypto market crash over the last eight months flipped Coinbase from an operating profit of $874.7 million in the Q2 of 2021 to a $1.04 billion operating loss in Q2 of 2022.
Coinbase’s Trading Volume Takes a Hit
While the crypto market crash played a significant role in the Q2 losses of Coinbase, a sharp decline in trading volume is another major factor.
The trading volumes at Coinbase dropped more than 50% in the second quarter to fall to $217 billion. The volume of retail trades sank by 68%, while institutional trading on Coinbase fell as much as 46%.
On the Flipside
- Coinbase’s recent partnership with Wall Street giant and iShares owner BlackRock (BLK) is predicted to change the company’s fortune and affect the broader crypto market.
Why You Should Care
Coinbase’s Q2 performance reflects the eight-month market downturn, which has cut Bitcoin’s value to one-third of its November 2021 all-time high.
Read more about the Coinbase-BlackRock partnership in:
Read about the effect of the losses on Coinbase shares below: