Coinbase Disappoints With User Forecast, Revenue Miss

Coinbase Global Inc. posted a record $1.1 billion second-quarter loss and lower-than-expected revenue as the largest US cryptocurrency exchange was battered by tumbling digital-asset prices.

Shares of the company, which were first listed last April, dropped about 6% in US premarket trading. Coinbase has slumped 65% so far this year amid what has been labeled as the latest “crypto winter.”

Revenue declined by more than 60% to $808.3 million, missing the $854.8 million estimate from analysts polled by Bloomberg. Monthly transacting users dropped to 9 million in the second quarter, a 2% decline from prior quarter. Trading volume also missed estimates, with Bitcoin’s share of trading volume rising to 31% from 24%. Total assets on platform plunged 63% to $96 billion.

“The current downturn came fast and furious,” the company said in a shareholder letter, adding that soft crypto market conditions are continuing into the third quarter. Core retail customers are “sitting on the sidelines” because of the downturn, Chief Operating Officer Emilie Choi said during a Bloomberg TV interview.

“Investors had expected a pretty ugly quarter on trading revenue,” said Owen Lau, an analyst at Oppenheimer & Co. In crypto winter, “the big theme is the diversification continues,” such as through staking and interest income, he said.