Crypto giant Coinbase lost $1.1bn ($0.9bn) in the second quarter of the year as revenue dropped declined during the crypto crash.
$446mn (£365m) of this loss was due to an impairment charge on the exchange’s crypto and venture investments as the “crypto winter” led to plummeting cryptocurrency prices and caused widespread losses across the industry.
Coinbase revenue tumbled over 60 per cent to about $808m (£660m), a sharp change from analyst expectations of near $855 (£699m), Bloomberg reported, with monthly transacting users dropping 2 per cent to 9m from the previous quarter.
The exchange’s trading volume declined 30 per cent and it suffered a $647m (£583m) operating loss before the impairment charge.
The company had revenues of $1.6bn (£1.3bn) last year, but the crypto crash this year led to declining activity and hit Coinbase hard, forcing it to cut staff by 18 per cent. Coinbase shares are down more than 10 per cent in 24 hours and more than 65 per cent for the year.
Coinbase Chief Operating Officer Emilie Choi told Bloomberg core retail customers were “sitting on the sidelines” due to the crash, while Chief Financial Officer Alesia Haas said, “Clearly we acknowledge these are stress market conditions.”
The crypto market collapse has cast gloom over the industry, with major companies struggling. Alongside Coinbase, other major firms like Blockchain.com laid off a quarter of its workforce while Crypto.com cut 5 per cent.
The crypto rout has sent the crypto market cap plummeting from above $3 trillion ($2.5 trillion) last year to just over $1 trillion ($0.8 trillion), with the price of Bitcoin tumbling over 60 per cent from its all-time high of near $69,000 (£57,3703) in November 2021 to $23,817 (£19,185) today.