The cryptocurrency exchange Coinbase is cutting costs and shifting its focus toward subscriptions and services in a crypto-winter environment. CEO Brian Armstrong said this in an interview with CNBC.
For the second quarter, the platform posted a loss twice as high as forecasts. The company attributed this to a decline in digital-asset prices — trading volume on the platform stood at $217 billion versus $462 billion a year earlier.
Trading commissions formed 82% of net revenue. The remaining portion came from revenues grouped under subscriptions and services.
In an interview, Armstrong spoke of efforts to boost the share of the latter direction as cash flow from trading dries up in periods of weak market conditions.
“We understand that trading commissions will be an important part of our business ten years from now, even twenty years from now. I would like to achieve a situation where more than half of our revenue comes from subscriptions and services”, he explained.
The head of the exchange said Coinbase is developing a product lineup, including стейкинговый сервис. The platform offers cloud services and the Coinbase One service. The latter is still in beta testing but provides a higher level of customer support and other advantages.
Armstrong said there was a need to move away from a US-centric approach.
“Looking back, perhaps we were too focused on the requirements of American regulators. … Perhaps that was a mistake. We are changing that”, he explained.
The Coinbase CEO noted that the exchange has endured four bear markets and is well prepared for the current one. He estimates the current crypto winter will last 12–18 months. On June 14, it was revealed that around 18% of the exchange’s staff would be cut.
Armstrong did not rule out further optimizing the workforce in the future, though the steps already taken were intended as a one-off event.
Earlier in August, S&P Global downgraded Coinbase’s corporate rating from ‘BB+’ to ‘BB’, keeping a negative outlook.
Earlier Coinbase agreed to cooperate with BlackRock. The latter’s clients will gain direct access to trading digital assets via the Aladdin portfolio-management system.
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