Following the consequential effects of the bear market, Coinbase cryptocurrency exchange has reportedly recorded losses of $500 million in 2022 thereby dragging down its revenue by more than 50%.
In an exclusive interview with Bloomberg on Dec. 7, Coinbase CEO Brian Armstrong revealed that the exchange’s trading revenue has dwindled by more than half in comparison with last year’s records.
Armstrong further disclosed that the company recorded $7 billion in revenue and $4 billion in earnings in 2021, which could be regarded as half or less of what was recorded in 2022.
Meanwhile, Coinbase had earlier projected in a letter to investors that it envisages to have approximately $500 million loss in overall earnings before removal of taxes, interest, depreciation or amortization (EBITDA) for 2022.
In the course of the interview, Armstrong was asked by David Rubenstein if he thinks FTX collapse will have damaging effects on the crypto industry, he acknowledged that the negative effects are inescapable.
He further clarified that the FTX case is quite different from traditional financial scandals such as Bernie Madoff and Enron.
Speaking on crypto regulation, Armstrong believed it is a welcome development as it will enhance deeper transparency and accountability. But cautioned that a single regulatory body cannot regulate all crypto exchanges because different cryptocurrencies have different use cases.
Crypto Exchanges Struggle for Survival
There is no mincing word that crypto exchanges have not been spared of the fair share of the market turmoil. From FTX collapse to TerraUSD (TUSD) depegging to the U.S. dollar among others, 2022 has been a tough year for the crypto industry.
Recall that one of the crypto exchanges Bitfront shutdown on Nov. 27 as a result of the crypto winter occasioned by bear market. In the same vein, Crypto Firm Nexo also announced a partial shutdown due to unclear regulations.
Meanwhile, leading crypto exchanges like Gate.io, Huobi, Kucoin have been under fire over their proof of reserve disclosure. In fact, Kucoin’s proof of reserve is set to be audited shortly. The bear market will likely bring a new vista to crypto space.
