Coinbase shared a June earnings report, which worried investors. It cited market conditions as the main reason for the decline in figures.
Coinbase representatives stated that there were no major problems at the company and that they will concentrate on consolidating to improve future prospects.
Coinbase was disappointed to see Q2 close. Its business report shows the largest quarterly net loss since Coinbase went public on NASDAQ.
$1.1 Billion in Lost Trades, Traders Go Passive
Coinbase reported a net loss in the amount of $1.1 billion and an EBITDA loss in the amount of $151 million. This was due to customers being more likely to hedge their bets. Coinbase has seen an increase in operational costs despite having laid off 18% of its employees in June.
It is possible that the operational costs for the platform could be higher than expected since downsizing should have resulted in a significant reduction in costs.
Subscriptions up, trades down
Partially, the report attributed the poor bottom line to a 30% drop in trading volume over Q2 leading to a 35% decrease in overall transaction revenue.
The document suggests that future prospects may not be so grim. Coinbase lost 2% of its user base in quarter one, but that isn’t a reason for the decline in trading volume. This is despite the bear market. The drop in trading volume could be due to the passive stance of HODLers. They are able to decline riskier trades and instead prefer to hedge their bets with cryptocurrencies they already own.
Coinbase has a silver lining: the fees for subscriptions and services have increased 44% since the start of the fiscal year.
Coinbase representatives are optimistic despite the difficult circumstances faced by the company and assure investors that they have the resources necessary to continue operations.
“Down markets can be seen as builder’s markets. This is where most casual competitors fall back. Coinbase is optimistic and focuses on creating great products and services. We are extremely proud of how quickly our products have been deployed and the feedback that we have received from customers. We are confident that we can emerge stronger if we keep focusing on building the right products, and services.
Coinbase’s leadership must recoup losses as markets stabilize.
CryptoPotato’s first post, Coinbase Reports More Than $1 Billion in Losses during Q2, appeared first on CryptoPotato.
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