Aug 10, 2022 12:00AM ET
By: AnalysisWatch
Crypto exchange giant Coinbase pointed to the "fast and furious" decline of crypto markets as the cause of a staggering net loss of $1.1 billion in the second quarter of 2022, which also saw trading volume and transaction revenue plummet.
This is the second consecutive quarter of losses for the crypto company and its biggest loss since listing on the Nasdaq stock exchange in April 2021.
The results, which also fell short of analysts' expectations, were shared in a letter to shareholders for the second quarter of 2022 from Coinbase on Tuesday, stating Coinbase said the second quarter was "difficult," with trading volume down 30% and transaction revenue down 35% sequentially.
The crypto exchange reported $802.6 million in revenue, down 45.1% from the previous quarter and a staggering 153.1% drop from the year-ago quarter. Its net loss, which amounted to $1.1 billion, was mainly due to non-cash impairment charges of $446 million caused by lower crypto asset prices in the second quarter.
However, Coinbase writes that despite the economic downturn, the company is doing everything it can to adapt to changing market conditions.
To cut costs and improve profit margins, Coinbase laid off 18% of its staff in June and also took a "pause, maintain, and prioritize" approach to product development:
Looking ahead, Coinbase said it expects the "soft crypto market conditions" of the second quarter to continue into the third quarter of 2022. The company said it expects a further decline in total trading volume and average transaction revenue per user, although it said it may see some growth in revenue from subscriptions and service fees.
Coinbase's share price dropped 10.55% on Tuesday following the release of its second-quarter results and, at the time of writing, was trading at US$87.68