Coinbase Q2 2022 Financial Report Shows $1.1 Billion Loss Due to Crypto Market Decline

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2022-08-13 14:46:40

This is the largest quarterly net loss for the crypto company since listing on the Nasdaq Stock Exchange in April 2021.

The negative fluctuations of the crypto market during the second quarter of 2022 contributed greatly to the financial situation of the cryptocurrency exchange. Coinbase. Throughout the period, the company has seen a dramatic drop in trading volume and revenue.
With the results falling short of analysts’ expectations, management had to explain in a letter to shareholders on Tuesday:

“The current downturn is rapid and intense and we are seeing customer behavior mirroring the behavior of past bear markets. Q2 was a tough quarter with a 30% drop in trading volume and a 35% drop in trading revenue in a row. Both indices are affected by changes in customer and market activity. They are driven by macroeconomic factors and crypto credit.”

Quarterly financial reports of cryptocurrency exchange Coinbase

Despite the drop in transaction revenue, the number of wallets and users on the exchange platform Coinbase not much change. Their customers are becoming more passive in crypto investments.

The company reported second-quarter revenue of $802.6 million, down 45.1% from the previous quarter and down 153.1 percent from the same period in 2021. Coinbase’s net loss now amounts to a whopping 15.1% QoQ. $1.1 billion with mostly $446 million from crypto asset price drop in Q2.

Coinbase said the company is doing its best to adjust to volatile market conditions. To cut costs and improve margins, Coinbase cut its staff by 18% in June and has also taken a “pause, hold, and prioritize” approach to product development:

“Overall, it will take some time to realize the full financial impact of our actions, but we have reduced the full-year cost ranges for Technology & Development and General & Administration. .”

Coinbase Asset Catalog

Among those prioritized products include Coinbase’s retail app, Coinbase Prime, Staking, Coinbase Cloud, and other Web3 apps. The company forecasts total transaction volume and average transaction revenue per user to drop further if the situation continues as it is. Revenue will be focused on customer service and registration fees.

Coinbase’s share price fell 10.55% on Tuesday following the release of its Q2 results and was priced at $87.68 at press time.

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