![]() While Armstrong remains upbeat about Coinbase’s profitability in the long-term, short-term headaches will need to be addressed if it is to reenergize investor trust and attract new customers. “One thing we’re doing is shifting more of our revenue over time, away from trading fees to what we call subscription and services,” Armstrong said, adding that those services grew to around an 18% share of the exchange’s total revenue. Reported earnings show the exchange’s trading fee revenue fell 30% from the previous quarter, to $2.17 billion, as retail traders exited the market following the collapse of Terra and a lending crisis that sparked a liquidity crunch from overexposed crypto firms. He added that any longer-term accumulation would be a play on the exchange’s institutional, developer and Web3 products leading the market.Īnd the shakeup in diversified revenue streams couldn’t come soon enough. “Coinbase stock is trading closely to crypto and we expect any market recoveries in the short-term to continue a high-beta correlation, de Wit said. What it can affect, Armstrong said, were products, cost management, and ensuring it has enough capital to get through any down period. In November, the stock hit its highest point since its direct listing as bitcoin hovered around its own record high.Īrmstrong told CNBC that Coinbase had suffered similarly to its peers, with macroeconomic factors out of the company’s control. Indeed, the company’s valuation is somewhat correlated with bitcoin. Coinbase revenue reflects drop in crypto tradingĬoinbase reported $803 million in revenue during this year’s second quarter, missing analysts’ higher predictions by $50 million. ![]() Coinbase shares are down more than 70% in the year to date despite a healthy 60% boost inspired in part by a lucrative partnership with BlackRock announced earlier this month. That, in turn, has caused trouble for its stock price. Quarterly financial statements have shown the exchange giant has begun to slow in recent months. Though in the periods where market activity slumps - exacerbated by decreasing digital asset valuations across the board - revenue dries up. “These conditions will no doubt test all crypto firms, but especially those that struggle to diversify revenue streams.”Ĭoinbase is hoping to weather the storm by undergoing cost-cutting measures and shifting the way it generates revenue, Armstrong said, which currently hinges on fees taken from trading activity when times are good. “Crypto has had the double impact of credit defaults and a loss of confidence with the Celsius and Three Arrows Capital failures,” Jon de Wit, CIO of crypto trading firm Zerocap told Blockworks. While unemployment remains low, costs of goods have risen significantly over the last 18 months, with wage growth remaining flat in most developed economies, meaning less money in back pockets and reduced individual purchasing power. They’ve been dogged, along with equity markets, by significant macroeconomic factors including rising interest rates, inflation and the impact of war in Ukraine. “We try not to get focused on short-term ups and downs, we just zoom out.”ĭigital assets are nearing five months of price depreciation following a crash at the end of March. “It’s never as good as it seems, it’s never as bad as it seems,” Armstrong told CNBC over questions on the macroeconomic outlook. In an interview with CNBC on Tuesday, Armstrong said his company was looking to long-term prospects rather than focusing on the short-term narrative in the markets. Armstrong touted plans to shift away from its trading fee revenue model to a subscription-based oneĬoinbase is seeking ways to maintain profitability despite slumping trading activity, with CEO Brian Armstrong expecting the crypto bear market to last up to 18 months - or even more.Coinbase CEO Brian Armstrong told CNBC he’s focused on cutting costs amid a tough macroeconomic outlook and depreciating crypto prices.
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