Coinbase reports $667 million net loss, revenue slumps 20% amid crypto meltdown

Coinbase Global Inc. demonstrated how quickly even one of the most diverse exchanges in the industry can be affected by a cooling cryptocurrency market.
As declining token prices reduced trading activity across digital assets, revenue in the fourth quarter fell more than 20% to $1.8 billion.

The business reported a net loss of $667 million after recording an unrealised loss to deduct the value of its cryptocurrency assets and investments, as opposed to a $1.3 billion profit at the same time the previous year. After-hours trading saw a slight increase in the stock, which is down around 37% for the year.

The findings come as Bitcoin has dropped about 50% from its peak in October, causing many retail traders to wait on the sidelines and reigniting comparisons to previous cryptocurrency downturns.

Exchanges have frequently been compelled to retreat rapidly during those cycles, and preliminary indications indicate that this one might do the same.

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The announcement this week by rival exchange Gemini Space Station that it intends to reduce international operations and lay off up to 25% of its employees highlights how quickly declining markets can result in operational strain.

The exchange announced sequentially reduced fourth-quarter revenue, and Kraken's chief financial officer left the company. According to Robinhood Markets Inc., its cryptocurrency trading income fell 38% this week.

Coinbase hopes to emerge from this downturn a different business. By acquiring the cryptocurrency options exchange Deribit and launching stock trading and prediction markets recently, it has attempted to lessen its need on spot trading during the last few years.

Analysts are keeping a close eye on those companies in hopes of seeing indications that they can generate more consistent revenue over market cycles.