Brian Armstrong, the chief executive officer of Coinbase crypto exchange, is showing a pessimistic point of view about the revenue of the company in the current year. The chief executive officer says the earnings of Coinbase may be minimized by up to half proportion because of the persistent crypto winter and trembling investor trust.
He specified that the revenue of the current year seems to be low as compared to the previous year. He added that specifically, a fifty percent decrease would likely take place in the exchange’s profits this year in comparison with 2021.
Armstrong explained this by saying that in the last year the revenue collected by Coinbase was nearly $7 billion. As per him, their positive EBITDA worth was approximately $4 billion.
Transaction Revenue of Coinbase Plummets Considerably
Nonetheless, the current has been witnessing a lot of decline in everything. In the CEO’s words, approximately half of the total revenue earned during the recent year would be cut off from this year’s.
This miserable condition is taking place at the point when a severe crypto bear market is suffocating the cumulative market capitalization of the whole crypto industry. Consequently, the market has touched the bottom of its bearish trend.
On the 22nd of November this year, the total market capitalization of the industry plummeted to its long-term lows at almost $821 billion (equaling up to seventy-three lower than its all-time high). In addition to this, the crypto exchange is considered to be among the entities which implement the top trading charges across the industry.
Back in the 3rd quarter of 2021, the firm reported revenue of $1.2 billion and nearly eighty-eight percent of that was coming from transfer fees.
After that, in the 3rd quarter of 2022, the revenue of the company dropped to a significant extent – by nearly 50% – paving the way toward a $545 million loss. The scenario of the 4th quarter of this year is also expressing a gloomy picture.
The cumulative revenue for the current year is anticipated to be lower than even 50% of the previous year. While the traders have become reluctant due to the prolonged bearish trend, the crypto exchange is getting decreased profit because of the fewer transfers.
According to the prediction of analysts, the lower volatility will be persistent for some time. This indicates that there are considerably lesser trading opportunities in the future.
The Coinbase CEO moved on to offer remarks on the downfall of FTX. He mentioned that the respective event had a huge fraud working at its back. Armstrong dismissed the justifications made by Sam Bankman-Fried regarding the accounting mismanagement.
COIN Shows a Bad Performance, Traders Perceive It as a Buying Opportunity
The stock of Coinbase has taken a plunge by eighty-one percent in 2022. The cumulative slump since its all-time high accounts for nearly eighty-six percent. The native token of the crypto exchange, COIN, has expressed the weakest performance among the prominent crypto tokens being traded on Coinbase.
Additionally, COIN is much closer to the all-time low thereof that occurred in the previous month at $40.64. Stock traders are presently looking at the dramatic low of COIN as a “generational buying opportunity” as the prices thereof would potentially rebound with the overall crypto market recovery. Nevertheless, this may take till 2023’s mid or some more time.