In June, Coinbase shared an earnings report that worried investors, citing market conditions as the primary reason behind the drop in figures.
At the time, Coinbase representatives assured investors that the company faces no major issues. And that it will focus on consolidation to ensure that future business prospects take a turn for the better.
Unfortunately for Coinbase, Q2 recently drew to a close – and its business report shows nothing less than the biggest quarterly net loss since the company went public on the NASDAQ stock exchange.
Coinbase Loses $1.1 Billion In Q2
The major cryptocurrency exchange recorded a record loss of $1.1 billion in the second quarter of 2022. This is the second consecutive quarter loss and the largest since the company listed on the Stock Exchange. Nasdaq stock (Nasdaq) in April 2021.
“The current downturn came fast and furious, and we are seeing customer behavior mirror that of past down markets.” Coinbase said The exchange also saw a 30% drop in trading volume and a 35% drop in trading revenue in a row. “Both metrics were influenced by a shift in customer and market activity, driven by macroeconomic and crypto credit factors alike,”
The crypto exchange reported $802.6 million in revenue, which was a 45.1% drop from the preceding quarter. It reported a staggering 153.1% drop from the prior-year quarter. Its net loss, which amounted to $1.1 billion, was mainly driven by $446 million in non-cash impairment charges caused by lower crypto asset prices in Q2.
However, Coinbase wrote that despite the economic downfall, the company is doing its best to adjust to fluctuating market conditions. In order to cut expenses and improve profit margins, Coinbase cut 18% of employees in June, and has also taken a “pause, maintain and prioritize” approach toward product development.
“Overall, it will take some time to fully realize the financial impact of our actions, but we have lowered our full-year expense range for Technology & Development and General & Administrative expenses.”
Looking ahead, Coinbase said it expects the “soft crypto market conditions” from the second quarter to continue into Q3 2022. The company said it expects a further fall in total trading volume and average transaction revenue per user. Though it said it may see some revenue growth from subscription and service fees.
