Coinbase Revenue Could Plunge More Than 75% Amid Crypto Slump

Coinbase International, Inc. (COIN), the second-largest cryptocurrency alternate by buying and selling quantity, doubtless logged a fourth consecutive quarter of losses as transaction income plummeted and crypto costs stagnated for nearly a 12 months.

Key Takeaways

  • Coinbase will doubtless report EPS of -$2.48 vs. $3.33 for a similar interval within the prior 12 months.
  • Income most likely plunged greater than 75% to $588.6 million.
  • Coinbase’s buying and selling quantity fell all through 2022 amid a hunch in cryptocurrency costs and the collapse of the FTX alternate.
  • The agency additionally confronted regulatory challenges, together with a $100 million tremendous levied by U.S. regulators over compliance points.

Coinbase most likely posted a lack of $568.1 million for the fourth quarter after posting a revenue over the identical interval within the prior 12 months, in line with estimates compiled by Seen Alpha. Earnings per share (EPS) is predicted to be -$2.48. Income doubtless plunged by greater than three quarters to $588.6 million, the bottom in two years.

Buying and selling quantity on Coinbase’s alternate platform fell every quarter of 2022 as buyers shied away from cryptocurrencies amid a market hunch. The high-profile collapse of the FTX alternate in November exacerbated investor reluctance over issues that their cash may very well be completely misplaced in comparable conditions at different exchanges.

Coinbase additionally confronted mounting regulatory issues late final 12 months. In January, the agency reached a settlement with New York regulators together with a $100 million tremendous for compliance and know your shopper (KYC) points.

A silver lining for Coinbase is that, as one of many largest exchanges with a popularity amongst prospects for trustworthiness, declines in buying and selling quantity slowed within the last months of the 12 months within the midst of the FTX debacle. Quantity has elevated on Coinbase’s platform this 12 months whereas rivals like Kraken and Gemini have faltered, although this won’t be mirrored within the upcoming monetary report.

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Shares of Coinbase rallied early in 2023 as the worth of cryptocurrencies rose, however the inventory stays down 66% during the last 12 months, in contrast with a ten% drop for the S&P 500 Info Expertise Index.

Supply: TradingView.
Coinbase Key Stats
  Estimate for This fall FY 2022 Precise for This fall FY 2021 Precise for This fall FY 2020
Earnings Per Share ($) -2.48 3.33 0.86
Income ($M) 588.6 2,498.5 585.1

Supply: Seen Alpha