Coinbase Toggles To Quarterly Loss As Crypto Winter Hits Trading Volume

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Feb 21 (Reuters) – Coinbase Global Inc (COIN.O) reported a fourth-quarter loss on Tuesday as trading volume on the cryptocurrency exchange came under pressure from a world-wide slowdown. industry triggered by a series of high-profile bankruptcies.

The digital asset market has suffered from dour sentiment over the past year, but the biggest blow to the sector came from the bankruptcy of leading crypto exchange FTX by Sam Bankman-Fried in November.

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“Following the failures of FTX and other crypto companies, we have seen increased regulatory scrutiny,” chief executive Brian Armstrong said in a call with analysts, but added that the development will ultimately benefit Coinbase.

Amid the market downturn, trading volume on the crypto exchange plunged to $145 billion in the fourth quarter from $547 billion a year earlier.

Retail merchants were also down significantly, with their trading volume in the quarter dropping nearly 89% to $20 billion.

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A bright spot was subscription and services revenue, which rose about 33% to $282.8 million in the fourth quarter, benefiting from sharp increases in interest rates.

Coinbase shares edged higher in volatile trading after the bell.

The crypto exchange is forecasting first-quarter subscription and services revenue of between $300 million and $325 million, above Wall Street estimates of around $285.7 million, according to Refinitiv data.

“I think it’s a pretty good report with an encouraging outlook. We’ll see how the stock stabilizes,” Oppenheimer analyst Owen Lau told Reuters, adding that the forecast was supported by spending controls. and improving revenue trend.

The company reported net revenue of $605 million in the quarter, up from $2.49 billion a year earlier.

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Coinbase posted a net loss of $557 million in the three months ended Dec. 31, compared with a profit of $840 million a year earlier.

Reporting by Manya Saini in Bangalore; Editing by Krishna Chandra Eluri

Our standards: The Thomson Reuters Trust Principles.

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