Aug 9 (Portal) – Coinbase Global Inc (COIN.O) reported a bigger-than-expected quarterly loss as investors worried about this year’s bet on risky assets balked at trading cryptocurrencies and their shares down the bell sent down 6% Tuesday.
Trading volume on the cryptocurrency exchange more than halved to $217 billion in the second quarter, with retail participation down 68% and institutional trading down 46%.
Coinbase said it expects trading volume to continue falling in the current quarter, underscoring the turmoil the sector has caused with the collapse of certain crypto ventures and a broader sell-off in financial markets.
That downturn has sent Bitcoin down 50% in 2022, forced several companies including Coinbase to shed jobs and raised fears of a drop in interest from small traders. Continue reading
Coinbase said its monthly transactional users declined 2% sequentially to 9 million in the April-June quarter.
“Coinbase didn’t see a mass migration from its platform during the quarter, but its users are becoming more passive in their cryptocurrency investments,” said Michael Miller, equity analyst at Morningstar Research.
That could weigh heavily on Coinbase’s revenue since the company derives most of its revenue from trading fees, Miller added.
Adjusted loss was $4.76 a share for the quarter, compared to the $2.65 analysts were expecting, according to data from Refinitiv. Sales fell 63%, missing market expectations.
Although operating expenses increased 37%, the company lowered its projected annual spend on technology, development and administration to $4.25 billion to $4.25 billion from $5.25 billion.
“The reduction is unlikely to restore profitability to current revenue generation levels,” Miller said.
Reporting by Mehnaz Yasmin in Bengaluru; Editing by Aditya Soni
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