According to the financial results report published on February 21 for the fourth quarter of last year, the largest American crypto exchange Coinbase recorded a net loss of $ 557 million, and for the whole year — $2.625 billion. For comparison, in 2021, Coinbase’s net profit amounted to $840 million and $3.624 billion, respectively.
According to the report, Coinbase’s revenues have more than quadrupled over the past year. So, over the past three months, the crypto exchange has earned $ 605 million, while in the same period of 2021 – $ 2.49 billion.
The annual income of the crypto exchange decreased by 57%. For the whole of last year, Coinbase earned $3.1 billion, which is more than half the $7.3 billion received a year earlier.
The Coinbase report says that the past year has been difficult for crypto companies, on the one hand, due to macroeconomic factors such as high inflation and rising interest rates, and on the other – due to two “unique” events in the industry itself. The first is the collapse of the LUNA token, which contributed to a decrease in the capitalization of the cryptocurrency market by about 60% and revealed inefficient practices in managing cryptocurrency risks, which ultimately led to the bankruptcy of Three Arrows Capital, Voyager and Celsius. The second event is the collapse of FTX, which was the result of fraud and caused a number of more bankruptcies in the industry.
At the same time, Coinbase notes that the situation on the crypto market has improved in the current first quarter compared to the expired fourth. And this led to the fact that the company received $120 million in transaction revenue in January. But Coinbase warned investors not to extrapolate these results for the future, as last year showed how quickly the market situation can change.
At the beginning of last December, the head of Coinbase, Brian Armstrong, stated that the company’s revenues would be halved or even more in 2022, because the decline in cryptocurrency prices and the collapse of FTX undermined investor confidence. According to his estimates, the exchange’s revenue should have decreased to about $ 3.2 billion.