Coinbase (NASDAQ: COIN), the leading cryptocurrency exchange, released its third-quarter financial results, revealing revenue that surpassed analysts’ expectations, although trading volumes saw a significant decline for the second consecutive quarter.
Coinbase Reports Q3 Revenue Exceeding Estimates Despite Declining Trading Volumes
New York, November 3 (Reuters) – Coinbase (NASDAQ: COIN), the leading cryptocurrency exchange, released its third-quarter financial results, revealing revenue that surpassed analysts’ expectations, although trading volumes saw a significant decline for the second consecutive quarter.
In the third quarter, Coinbase’s trading volumes fell from $26 billion to $11 billion, echoing a similar trend observed in the previous quarter ending June 30. Despite this decline, the company’s total revenue for the three months ending September 30 stood at $674.1 million, surpassing analysts’ estimates of $653.19 million.
However, the positive revenue figures failed to prevent a 4% drop in Coinbase’s shares during after-hours trading, as investors expressed concerns about the diminishing trading volumes. CEO Brian Armstrong addressed these concerns during a post-earnings call, acknowledging the challenges posed by the current market conditions marked by historically low volatility. “Despite the downturn in the market and the lowest volatility we’ve seen in years, Coinbase remains financially robust,” Armstrong reassured stakeholders.
This decline in trading volumes occurred amid ongoing legal disputes faced by Coinbase, notably with the U.S. Securities and Exchange Commission (SEC). The SEC filed a lawsuit against Coinbase and its rival Binance in June, alleging the trading of at least 13 cryptocurrencies as unregistered securities. Both companies have vehemently denied these accusations.
In its shareholder letter, Coinbase disclosed generating approximately $105 million in total transaction revenue in October, primarily due to a rebound in Bitcoin’s price, the world’s largest cryptocurrency. However, the company cautioned against drawing hasty conclusions from these results, emphasising the unpredictable nature of the cryptocurrency market.
The cryptocurrency sector has faced lukewarm investor sentiment throughout the year, partly due to significant collapses in 2022, leading to outflows exceeding a trillion dollars from the industry. Despite these challenges, Coinbase remains optimistic about its financial stability.
