Cryptocurrency platform Coinbase saw its revenue and user base drop off quite significantly late last year. And the signs of recovery seen in early 2023 are not enough to mask the uncertainties.
Coinbase, the world’s second largest cryptocurrency exchange, unveiled its financial results for the fourth quarter of 2022 on February 21. If they are not worse than what analysts and other economic experts feared, they confirm the very bad year 2022 of the platform, which lost both money and users.
Coinbase widened its losses late last year
In the fourth quarter, Coinbase generated revenue of $629 million. While this result is above expectations, it is four times weaker than in the last quarter of 2021 ($2.49 billion). And while the group had generated nearly $840 million in profit in the same period in 2021, Q4 2022 was marked by losses, amounting to $557 million.
Transaction volume fell 9% last quarter to $145 billion. Coinbase had also suffered in the second and third quarters of 2022. And this is reflected in the turnover delivered for the whole year: 3.1 billion dollars, against 7.3 billion in 2021.
Users have fled the platform, which wants to get out of total dependence on trading
In addition to a revenue crisis, Coinbase also faces the flight of its users. The base of the platform, which was 8.5 million users at the end of the third quarter last, fell to 8.3 million at the end of the year. Imagine that as of December 31, 2021, Coinbase had 11.4 million users. The difficult year 2022 for crypto-currencies obviously did not spare the platform, which was also forced to reduce its workforce by around 20% (nearly 1,000 employees).
So, Coinbase continues its diversification exercise to try to get out of its trading addiction. In the last quarter, it saw its flow management, custody and custody activities grow to $200 million. A beginning.
The platform expects to reach revenues from transactions of between 300 and 325 million dollars in the first quarter of 2023, which would allow it to somewhat break the poor dynamics of recent quarters. $150 million of restructuring expenses are expected to be incurred.
Source : CNBC
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