Coinbase (COIN) shares has plummeted 8% when the company announced negative earnings report. This is the first earnings report since its IPO.
- Revenue: $1.80 billion versus $1.81 billion expected
- Earnings per share: $3.05 versus $3.09 expected
According to Coinbase’s shareholder letter,
Our strong Q1 2023 results reflect the strength of the crypto price cycle we entered in Q4 2020. We saw many crypto assets reach all time high prices, high levels of volatility, and increased interest across the entire cryptoeconomy. Crypto market capitalization reached nearly $2 trillion at the end of Q1 2023 compared to $782 billion at the end of Q4 2020. By the end of Q1, the price of Bitcoin had nearly doubled to approximately $59,000 compared to the end of 2020, and the price of Ethereum more than doubled during this same period to approximately $1,900.
This market environment drove strong engagement with the Coinbase platform, reflected in retail, institutional and ecosystem partner growth across all key metrics including our Verified Users, retail Monthly Transacting Users (MTUs), Trading Volume, and Assets on Platform.
Coinbase Shareholder Letter
The firm, though, says it welcomes the competition.
Coinbase’s earnings follows news on Thursday that rival exchange Binance is under investigation by both the Justice Department and Internal Revenue Service for potential.
In addition, the trading volume and assets on the Coinbase platform continues to increase rapidly with Bitcoin leading and Ethereum coming in as the second largest asset.
Coinbase (COIN) Q2 and its outlook
Coinbase is looking forward for Q2, the company says that it sees a continuance of strong crypto price cycle with high interest in crypto across retail and institutional users. The company is obviously planning to meet or exceed the current quarters result.
The company expects total trading volume to meet or slightly exceed Q1 results and MTUs strengthen by continued interest in crypto markets.
