08-11-2022, 08:02 AM
Coinbase Posted over $1 Billion Losses in Q2 2022
<p>Coinbase crypto exchange reported significant losses in Q2. The exchange posted a loss of over $1 billion while missing analysts' forecasts.</p><p>- Loss of $4.98 per stock vs a forecasted loss of $2.65</p><p>- Revenue of $808.3 million vs a forecasted revenue of $832.2 million</p><p>The US exchange revenue dropped 64% with retail transactions revenue at $616.2 million, which is down 66%. Trading volumes (in $B) were significantly lower across in Ethereum and other <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/" target="_blank" id="b091101e-6e02-4b36-aa0e-7c972dfdd6ed_1" class="terms__main-term">cryptocurrencies</a>, however, Bitcoin's volumes have increased as well as BTC revenue.</p><p>In a letter sent to shareholders, Coinbase stated the following:</p><p>"Q2 was a test of durability for crypto companies and a complex quarter overall. Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue but also highlighted the strength of our risk management program.</p><p>"We are focusing on our top business priorities and more tightly managing expenses. As a result, we have included more information in our shareholder letter this quarter, which we have organized into chapters, summarized below, to help investors better understand our results."</p><p>Coinbase expects between 7 and 9 million monthly transaction users, which is down from the 5 to 15 million range only 3 months ago. The company has reduced its spending budget, less paid media and other incentives as the focus shifts to nonpaid traffic.</p><p>Expenses and infrastructure spending were also reduced to accommodate the current conditions of the <a href="https://www.financemagnates.com/terms/e/exchange/" target="_blank" id="b5da6e64-2afe-421d-9b81-16404b7d59d6_4" class="terms__secondary-term">exchange</a>.</p><p>Ark Invest Is Bullish on Coinbase</p><p>Despite the poor quarter Ark Invest are still bullish on the company. An Analyst at Ark Invest, Yassine Elmandjra explains that <a href="https://www.financemagnates.com/cryptocurrency/coinbase-to-connect-blackrocks-aladdin-institutional-clients-to-crypto/" target="_blank">Blackrock's partnership</a> with Coinbase is a significant milestone.</p><p>"This is I’d say by far [BlackRock's partnership] the strongest signal we’ve seen around institutions considering crypto as a new asset class, and that Wall Street is finally ready to make the leap here. I think a partnership of this caliber could usher trillions of dollars into the crypto asset class in the coming years.”</p><p>Based on Ark's simulations, institutional funds allocations of between 2.5% and 6.5% may lift BTC price by $200,000 to $500,000.</p><p>It is worth noting that at the end of July, Ark Invest sold around 1.4 million stocks of Coinbase that were worth $79 million at the time.</p>
This article was written by Matti Williamson at www.financemagnates.com.
https://www.financemagnates.com/cryptocu...n-q2-2022/
<p>Coinbase crypto exchange reported significant losses in Q2. The exchange posted a loss of over $1 billion while missing analysts' forecasts.</p><p>- Loss of $4.98 per stock vs a forecasted loss of $2.65</p><p>- Revenue of $808.3 million vs a forecasted revenue of $832.2 million</p><p>The US exchange revenue dropped 64% with retail transactions revenue at $616.2 million, which is down 66%. Trading volumes (in $B) were significantly lower across in Ethereum and other <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/" target="_blank" id="b091101e-6e02-4b36-aa0e-7c972dfdd6ed_1" class="terms__main-term">cryptocurrencies</a>, however, Bitcoin's volumes have increased as well as BTC revenue.</p><p>In a letter sent to shareholders, Coinbase stated the following:</p><p>"Q2 was a test of durability for crypto companies and a complex quarter overall. Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue but also highlighted the strength of our risk management program.</p><p>"We are focusing on our top business priorities and more tightly managing expenses. As a result, we have included more information in our shareholder letter this quarter, which we have organized into chapters, summarized below, to help investors better understand our results."</p><p>Coinbase expects between 7 and 9 million monthly transaction users, which is down from the 5 to 15 million range only 3 months ago. The company has reduced its spending budget, less paid media and other incentives as the focus shifts to nonpaid traffic.</p><p>Expenses and infrastructure spending were also reduced to accommodate the current conditions of the <a href="https://www.financemagnates.com/terms/e/exchange/" target="_blank" id="b5da6e64-2afe-421d-9b81-16404b7d59d6_4" class="terms__secondary-term">exchange</a>.</p><p>Ark Invest Is Bullish on Coinbase</p><p>Despite the poor quarter Ark Invest are still bullish on the company. An Analyst at Ark Invest, Yassine Elmandjra explains that <a href="https://www.financemagnates.com/cryptocurrency/coinbase-to-connect-blackrocks-aladdin-institutional-clients-to-crypto/" target="_blank">Blackrock's partnership</a> with Coinbase is a significant milestone.</p><p>"This is I’d say by far [BlackRock's partnership] the strongest signal we’ve seen around institutions considering crypto as a new asset class, and that Wall Street is finally ready to make the leap here. I think a partnership of this caliber could usher trillions of dollars into the crypto asset class in the coming years.”</p><p>Based on Ark's simulations, institutional funds allocations of between 2.5% and 6.5% may lift BTC price by $200,000 to $500,000.</p><p>It is worth noting that at the end of July, Ark Invest sold around 1.4 million stocks of Coinbase that were worth $79 million at the time.</p>
This article was written by Matti Williamson at www.financemagnates.com.
https://www.financemagnates.com/cryptocu...n-q2-2022/