Coinbase’s trading volume fell more than 40% in the first quarter as its earnings fell short of expectations and its outlook dimmed, underscoring Crypto Bear Market.
Shares in the largest U.S. cryptocurrency exchange fell more than 15 percent in after-hours trading after the company reported a net loss of $430 million, well above the $47 million expected by Wall Street analysts.
Revenue fell 35% year over year to $1.2 billion, missing analysts’ expectations of $1.5 billion.
the company, which listed In April 2021, it blamed the “continued . . . trend of lower crypto asset prices and volatility from late 2021,” adding: “We do not believe these market conditions are permanent and we remain focused on the long-term.”
Compared to the previous quarter, trading volumes were down 44 percent, which it said was “in line with the broader crypto spot market.”
Bitcoin, the most popular cryptocurrency, has more than halved in value since its peak in mid-November, dubbed the “crypto winter.”
The results stand in stark contrast to Coinbase’s gains during last summer’s bull market, when its profits surpassed those of the largest, more established exchange operators, including Chicago’s CME Group and Intercontinental Exchange, in the second quarter.
In response, Coinbase sought to diversify its business, launching non-fungible token market Last week tried to challenge the lucrative market established by startup OpenSea. It has also been exploring other products, such as crypto derivatives.
In its outlook, the company said that crypto-asset volatility and crypto-asset prices declined in April, and that users and trading volumes are expected to decline this quarter compared to the first quarter.
It signed the shareholder letter with #wagmi, an acronym for “We All Succeed” popular in the crypto community.