Coinbase’s net loss in Q1 2022 was $429.7 million, or $1.98 per share, nearly double analysts’ expectations. In after-hours trading, the stock fell 20% after a 12.6% drop in regular trading.
Q1 ’22 financial results are in.
Check out our letter to shareholders here 👉https://t.co/4oxQcGt4yh
— Coinbase (@coinbase) May 10, 2022
In Oct–Dec, Coinbase posted net income of $840 million, while in Q1 2021 it was $771 million.
Net revenue in January–March declined from last year’s $1.6 billion to $1.17 billion. This was driven by reduced trader activity — trading volume on the platform stood at $309 billion versus $335 billion. Analysts had expected a more modest decline in net revenue to $1.5 billion, according to Wall Street Journal.
Compared with Q4, asset value declined from $278 billion to $256 billion, and the number of monthly active users fell from 11.4 million to 9.2 million.
\”The first quarter of 2022 continued the trend of both declining crypto asset prices and volatility. This affected our results. We do not consider the prevailing market conditions to be permanent; we remain focused on the long term.\”, — according to the letter to shareholders.
Coinbase reiterated plans to develop its own wallet and NFT-related services.
The quarterly results publication raised questions about the custody of client funds in light of the SEC requirement. Coinbase CEO Brian Armstrong assured that client assets are securely protected even in a \”black swan\” scenario.
3/ We believe our Prime and Custody customers have strong legal protections in their terms of service that protects their assets, even in a black swan event like this.
— Brian Armstrong — barmstrong.eth (@brian_armstrong) May 11, 2022
Bitcoin exchange shares fell further before the earnings release, despite a rebound in the tech sector — the Nasdaq Composite finished May 10 up 0.98%. Since the IPO Coinbase’s stock has fallen 81.8%. On May 11, those losses were set to widen at the open.
Crypto and mining stock shares overall continue to underperform the market amid concerns of Bitcoin breaking below the $30,000 level. On May 9, sector equities fell between 13.2% and 26.3%.
Earlier, Galaxy Digital founder Mike Novogratz signaled further downside for digital gold.
In April, the executive noted that pausing Fed tightening would be a condition for Bitcoin’s resumed growth.
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