When the cryptocurrency exchange Coinbase went public in April 2021, it was a very triumphant moment for the nascent crypto industry.
Nonetheless the company has endured a grim 2022, grappling with a particular crypto market crash that has tanked its stock price in addition forced it to lay off hundreds of employees.
Those struggles continued on Tuesday when Coinbase reported a 63 percent decline in revenue in the second quarter and taking a swing to a $1. 1 billion loss from a year dead.
Blaming some “fast and furious” crypto downturn, the company said revenue been recently $808 million, down from $2. 2 billion a year previously. Its monthly customer total rose to nine million from 7. 8 million last year, but was down from 9. associated with million in the last quarter. Coinbase also predicted that for user numbers would continue to fall over the next a lot of months.
In just an earnings call on Tuesday, Brian Armstrong, Coinbase’s chief govt, emphasized the cyclical nature of crypto and pointed out that most the company had survived previous downturns.
“It sounds like scary, ” he said. “But it’s never as bad have it seems. ”
The results illustrated the large challenges facing Coinbase at a turbulent moment for the crypto industry. The prices with all the leading digital currencies damaged in May and June as a series behind experimental crypto ventures collapsed , plunging investors to make financial ruin. The crash has led to layoffs amoung all the domain, dampening the excitement that surged last fall when the associated with Bitcoin reached a record high.
As part to do with the industry meltdown, Coinbase’s stock price has fallen about seventy-five percent since November. The company’s success is largely tied for the fluctuations of the broader crypto market. In the tad quarter, more than 80 percent of its revenue came as a result of trading fees it charged customers to buy and sell digitado assets like Bitcoin and Ether.
In June, Coinbase laid off 18 percent of its staff, or about pertama, 100 employees. Mr. Armstrong said at the time that the main company had “over-hired. ”
Coinbase’s recent struggles have fueled concerns that of which may be squandering its early lead in the industry, as competitors like Binance and FTX buildup during the downturn.
Despite its early start, Coinbase has never had a particular strong foothold in the international market, and it recently horrible an expansion effort in India. Its most hyped product opening of the year — a marketplace for the digital collectible figurines known as nonfungible tokens, or NFTs — drew little end user interest. And a hiring spree last year led to overspending and bloat, as the company’s expenses extra than doubled.
“We probably could have grown slower over the last several years, ” Mr. Armstrong said on the call.
Coinbase also offers come under regulatory scrutiny. Last month, the Justice Section filed insider-trading charges against a former Coinbase employee. In virtually any related action, the Securities and Exchange Commission said that everything considered some of the digital coins from Coinbase’s exchange throughout be securities and, therefore, subject to regulation like stocks perhaps bonds — a stance the company has objected to.
In a letter to shareholders on Tuesday, Coinbase replied that the S. E. C. sent the company a “voluntary request for information” in-may about that listing process. “We choose not yet know if this inquiry would become a formal review, ” the letter said.
Coinbase’s competitors appear so as to be faring better during the downturn. FTX, another crypto shift, has received financial results that are “ballpark similar” to last year’s, according to its chief executive, Sam Bankman-Fried. Binance, the to-days largest exchange, announced in June of it was looking to fill 2, 000 positions.
Still, Coinbase remains one of the most trusted and approved crypto brands in the United States, known for its Display screen Bowl commercial featuring a bouncing QR code. Last week, the type of company announced a partnership with BlackRock, the world’s largest fixed and current assets manager, to help institutional investors trade Bitcoin.