Market Commentary

Coinbase Struggles Continue Amid Crypto Winter

Huzaifa Waseem · 1 minute read

Coinbase (COIN:US) shares have moved lower in recent days after the crypto exchange reported its fourth-quarter results.

Coinbase reported an adjusted Ebitda loss of $124 million, better than the expected $201.8 million loss. For comparison purposes, Coinbase reported a profit of $1.21 billion in the year-ago period. Revenue fell 75% to $629.1 million, better than the $588.2 million.

“We managed the company through a tumultuous year. Our Q4 results were consistent with our outlook, including coming in well within our full-year Adjusted EBITDA loss guardrail we conveyed in February 2022. In the latter half of 2022, we pivoted and began reducing expenses which has culminated in a materially lower expense run rate beginning in Q1 ’23,” the company stated in a shareholder letter.

Trading volume plunged 9% to $145 billion - retail and institutional trading volume tumbled by 89% and 6%, respectively. The company said it generated $120 million of transaction revenue in January 2023. Coinbase also said it is making progress toward the goal of improving adjusted Ebitda in 2023 as it undertook a set of cost-saving actions.

Investors were also disappointed that the crypto exchange didn’t offer guidance, which highlights the low visibility in the currency crypto ecosystem.

Congress members were mostly selling Coinbase shares given a sharp selloff since 2021. Representatives Shri Thanedar and Marie Newman sold the stock in the closing months of 2022. The latter has been an active trader of Coinbase stock since 2021, mostly selling previously-accumulated shares.