Coinbase shares to open lower after 75% drop in net income in Q3
Coinbase posted total net revenue of $1.235 billion in Q3 falling 30% short of FactSet estimates of $1.614 billion.
Trading volume in Q3 was down 29% compared to Q2. Although the performance by Coinbase in Q3, was rather underwhelming. Coinbase said in the report that it had been a “strong quarter” for the firm, pointing toward deeper investor engagement on the platform and the development of new products, such as its upcoming nonfungible token marketplace. The firm also emphasized that it is focused on the long term as opposed to quarter-to-quarter:
“Coinbase is not a quarter-to-quarter investment, but rather a long-term investment in the growth of the crypto economy and our ability to serve users through our products and services. We encourage our investors to take this point of view.”
With a stand-up CEO like Brian Armstrong who has built an outstanding product which has brought so many people into this space, it’s hard to really think the worst after one not so great quarter. Although the SEC threatened to sue Coinbase if they launched the lending protocol they have been working on. Armstrong and Coinbase have went above and beyond to try to keep their operations as transparent as possible, however they are just another crypto company who has become a casualty of the lack of regulatory clarity here in the United States.
Trading volume on the platform tallied at $327 billion in Q3, down 29% compared to Q2, with institutional investors representing the lion’s share of trading with $234 billion, while retail traders accounted for $93 billion.
Ether (ETH) outperformed Bitcoin (BTC) in terms of trading volume for the second quarter in a row, with the former totaling 22%, while the latter equated to 19% of total volume. “Other crypto assets” accounted for 59% of trading volume, which was up 18% compared to Q2.