Crypto exchange Coinbase published its third quarter reports on Thursday. The company cut its losses by 50% to $545 million. In the second quarter, this value was still USD 1.1 billion. However, the transaction volume fell significantly. At the same time, the exchange experienced an increase in subscriptions and services.
A weak overall market is noticeable at Coinbase
“Subscriptions and services revenue increased 43% sequentially to $211 million, driven by higher interest income,” write the report’s authors. However, transaction revenues continue to decline. They are currently being weakened by the headwinds from the crypto market. Transaction revenue was $366 million in the third quarter, down 44% from the second quarter of this year. This reduction can be explained by the currently low trading volume:
The Coinbase team also assumes that the negative overall development is caused by the bear market.
“We believe this shift in volume is due in part to perceptions of uncertainty that certain digital asset issuers may have about the development of a regulatory framework aimed at our industry, whether by Congress or regulators. Third, as retail volume pulls back, the competition for market makers and active traders, who are price and leverage sensitive, heats up.”
Coinbase’s total net revenue was $576 million in the third quarter. Here, too, a decline can be observed. In the second quarter, that figure was 28%.
Coinbase stock forecast – positive development in sight?
Coinbase shares have declined since Tuesday, hitting $57.00 on Thursday. However, after small volatile movements, the price has returned to $59.91.
Capital.com published a chart showing forecasts from analysts. The experts at TipRanks therefore see the stock rising to a value of $305. According to the calculations, Coinbase can even go up to 405 USD within the next 12 months.
The analysts at CNN Money also see a positive development for the upcoming stocks, but express themselves much more cautiously. According to their analysis, the price could rise to $296 over the next few months. This is an average of the experts. The highest value reported was $600 and the lowest was $200.
The forecasts from Wallet Investor, on the other hand, look a bit more positive again. The calculations show values between 162 and 405 USD.
But the share’s development depends on a number of factors. On the one hand, from the figures that Coinbase regularly publishes. The report for the third quarter shows a smaller loss than last quarter. Nevertheless, it also shows how dependent the exchange is on the crypto market.
Coinbase – one of the largest exchanges on the market
The current numbers from the last report give hope that the bear market for Coinbase will soon be a thing of the past. Both the stock and the platform appear to be slowly recovering. The task now is to create a stable base to be able to rise again in the future.
Despite everything, Coinbase is looking forward to the end of 2022 and the year to come. In the published report they write:
“For 2022, we remain cautiously optimistic that we will operate within the $500 million adjusted EBITDA loss guidance that we previously communicated. This assumes that crypto market capitalization and volatility do not deteriorate significantly below October levels and that we see no changes in customer behavior. We prepare for 2023 with a conservative bias and expect the current macro headwinds to continue and potentially intensify.”
The American joint-stock company focuses on the trading of cryptocurrencies. The company was founded in 2012 by Brian Armstrong. There are currently over 4,900 employees. Coinbase went public in June 2018.
Not only coins can be bought or exchanged on the platform. Traders can also trade in official currencies such as the US Dollar, Euro and British Pound. In the so-called “safe storage”, retailers can secure their purchases.
The developers of the platform are apparently currently working on a marketplace for NFTs and offer a popular service with Coinbase Staking.
Coinbase is available in over 100 countries and is used by over 108 million verified traders. Trades are protected by Coinbase insurance. In addition to the headquarters in the United States, since 2018 the company has had another office in Japan. In August 2021, Coinbase also became active in Germany and has since traded in the country under the name Coinbase Germany GmbH.
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