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Coinbase loses profits as Bitcoin (BTC) and Ethereum (ETH) trading volumes decline

Wed 10 Nov 2021 ▪ 7h11 ▪ 3 min read — by Rudy Bauer

Popular cryptocurrency exchange Coinbase has summarised its third quarter results for this year. It turned out that the company’s net income fell by 75% due to a drop in Bitcoin (BTC) and Ethereum (ETH) trading volumes. Third-quarter total net revenue was $1.235 billion (~£910 million), 30% below analysts’ estimates of $1.614 billion (~£1.19 billion).

Decline in crypto spot trading

Coinbase, the largest cryptocurrency exchange in the United States, published a report with the results of the third quarter of this year. According to the data, net income for the reported period amounted to $406 million (~£300 million). This is much less than the second quarter, when the company’s revenue amounted to $1.6 billion (~£1.18 billion). Despite this, Coinbase shares are growing and compared with the third quarter of 2020 their value has increased by 500%.

In the third quarter of 2021, the cryptocurrency exchange made $1.235 billion in revenue, which was about 30% less than analysts’ expectations of $1.614 billion.

Alesia Haas, Coinbase’s chief financial officer, reported that trading volume is down across the cryptocurrency spot market. For example, Square, a payment company that provides the ability to trade BTC, reported third-quarter revenue 23% lower than the previous reporting period. According to fxstreet.com, Robinhood performed even worse, with revenue from crypto transactions down 78%.

BTC and ETH no longer dominate trading

According to the Coinbase report, leading cryptocurrencies Bitcoin and Ethereum have ceased to dominate trading volume and transaction revenues. This is apparently because the exchange has expanded the list of digital assets available to users. While in the second quarter of this year BTC and ETH each accounted for 26% of the revenue, in the third quarter this figure dropped to 21% and 22%, respectively. Other altcoins account for 57% of the transaction revenue and 59% of the trading volume.

Despite the decline in performance, Coinbase believes the third quarter was quite strong for the company. The exchange is gearing up to expand its product line, provide new services to customers, and launch its NFT marketplace. This implies Coinbase investors should concentrate on the long term rather than quarter-to-quarter.

Compared to other cryptocurrency exchanges, Coinbase is performing well and showing solid numbers. Let’s keep an eye out for new products and services, as well as other opportunities they are preparing for their customers.

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Rudy Bauer avatar
Rudy Bauer

Photographe, Vidéaste, webdesigner et enfin rédacteur pour CoinTribune: l'image, le digital et la blockchain sont mon dada.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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