Coinbase, the largest cryptocurrency exchange in the United States, reported a 63% drop in revenue on Tuesday, as it staved off a larger downturn in the crypto market.
The company said second-quarter revenue was $808 million, down from $2.2 billion a year earlier. Its monthly customer count rose to 9 million from 8.8 million last year, but was down from 9.2 million the previous quarter. Coinbase also posted a net loss of $1.1 billion, compared with a profit of $1.6 billion a year ago.
This is the second consecutive quarter Coinbase has seen a decline in revenue and users compared to the previous quarter.
The results underscore the serious challenges facing Coinbase at a tumultuous time for the crypto industry. Prices of Top Cryptocurrencies crashed in May and June like a series Experimental crypto venture collapses, pushing investors into financial ruin. The crash led to staff layoffs and cost cuts across the industry, dampening the excitement that spiked last fall when Bitcoin prices hit record highs.
As part of an industry meltdown, Coinbase’s share price has fallen about 75% since November. The company’s success is largely tied to the volatility of the broader crypto market. During the first quarter, about 90% of its revenue came from transaction fees it charges customers to buy and sell cryptocurrencies like Bitcoin and Ether.
In June, Coinbase laid off 18% of its employees, or about 1,100 employees. Brian Armstrong, chief executive officer, said the company was “hiring too much”.
Coinbase’s recent struggles have raised concerns that it could squander its lead industry, as competitors like Binance and FTX continue to expand during the downturn.
Although new, Coinbase has never had a strong foothold in the international market and it recently made an expansion attempt in India. Its most hyped product launch of the year — a marketplace for digital collectibles known as unusable tokens, or NFTs — was seen by many as a misstep. . A hiring spree last year led to overspending and bloat.
The company has also come under regulatory scrutiny. Last month, the Justice Department filed insider trading allegations against a former Coinbase employee. In a related action, the Securities and Exchange Commission said it considers certain cryptocurrencies traded on Coinbase’s exchange to be securities and, therefore, subject to the same regulation as stocks or bond – the stance the company has opposed.
Coinbase’s competitors seem to be doing better. FTX, another crypto exchange, has seen financial results “similar to last year,” according to its chief executive, Sam Bankman-Fried. Binance, the world’s largest exchange, announced in June, it is looking to fill 2,000 positions.
Still, Coinbase remains one of the most recognized and trusted crypto brands in the United States, known for its memorable Super Bowl ads featuring QR codes on. Last week, the company announced a partnership with BlackRock, the world’s largest asset manager, to help institutional investors trade Bitcoin.
