Categories: Crypto NewsNews
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2022-05-11 12:18 PM

Coinbase CEO says the exchange platform ‘never been more bullish’ even after a $430M(R6.9B) Q1 loss

By Nonhlanhla

On the earnings call, Coinbase CEO Brian Armstrong explained, “There are so many customers beating a path to our door that we have to have all hands on deck just to keep everything running.”

Coinbase, a cryptocurrency exchange, reported a $430 million(R6.9B) net loss in Q1, but CEO Brian Armstrong said on an earnings call that he’s “never been more bullish on where we are as a company.”

Coinbase reported a 27 % drop in revenue to $1.17 billion(R18.8B) in the first quarter of 2022, down from $1.6 billion(R25.7B) in the first quarter of 2021 and a long way from its Q4 2021 revenue of $2.5 billion(R40 B). Monthly transacting users fell by 19% to 9.2 million, down from 11.4 million in the previous quarter.

Coinbase’s shares had already dropped over 16% on the day to close at $73(R1 173), and after the earnings announcement, after-hours trading saw the price fall even lower to $61 (R981)at the time of writing. Since November 2021, when it almost achieved the $380(R6 110) high from its initial public offering in April of last year, Coinbase’s shares have been steadily declining.

On an earnings call, Armstrong explained why he was still hopeful despite the numbers: “There are so many customers beating a path to our door that we have to have all hands on deck just to keep everything running, so the down periods are often sometimes kind of a welcome change from that in the sense that we get to focus on building the next layer of innovation that will benefit us in the next cycle.”

According to Armstrong, the corporation was “greedy while others were afraid,” accumulating expertise and focusing on future projects and infrastructure. He addressed the “elephant in the room” of the company’s profitability decline, saying:

“The broader markets are down. We’re seeing a downmarket for growth tech stocks and risk assets, Coinbase and crypto is no exception to that. The good news is as a crypto company we’ve lived through many different cycles in crypto, including major drawdowns, which I think make us well suited to operate through these environments.”

He reminded shareholders of the company’s prospectus, which stated that it aimed to grow crypto adoption over time while operating at a rough break-even.

Coinbase mentioned in its shareholder letter that it was focusing more on its recent non-fungible token (NFT) market launch in order to become a market leader in the space, as well as its ambition to develop its platform as an “on-ramp to the crypto-economy.”

Armstrong said that 54% of the platform’s active users are engaged in activities other than crypto trading, but he didn’t specify what those activities are or mention the new NFT marketplace in his opening remarks.

When asked if the firm is pleased with activity in its NFT marketplace, Armstrong stated the company does not reveal “numbers on any of our new projects,” but that “there’s a lot to build and the opportunity in the NFT sector is enormous.”

According to on-chain data, only $75,000(R1.2M) in transaction volume occurred over 150 transactions on the first day of the marketplace’s public launch, a small percentage of the approximately 8 million email addresses that signed up for the waitlist.

Finishing his initial remarks, Armstrong stated that the industry is in its infancy and that Coinbase sees potential ahead, adding that “we’re going to keep expanding regardless of whether the market is up or down.”

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Nonhlanhla

Nonhlanhla P Dube is a senior news reporter. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her on: Email: nonhlanhla@rateweb.co.za