Cryptocurrency exchange Coinbase tumbled 12.6 per cent yesterday after unveiling disappointing first quarter results amid a market slump.
Losses for the first quarter stood at $430m, far worse than wall street predictions of $47m. Trade volumes plummeted from $547bn in the final quarter of 2021 to $309bn in the first three months of the year as institutional investors shied away from crypto markets.
Institutional clients accounted for just $235bn of trade volume across the quarter, a decline of 37 per cent.
Globalblock analyst Marcus Sotiriou also noted that bitcoin’s spot price on the Coinbase exchange, which is favoured by institutional investors, has been trading a discount compared to its spot price on Binance.
“This is further indication that institutions have been bearish recently, which has coincided with the dramatic sell-off,” Soteriou said.
Coinbase, which went public on the Nasdaq exchange in April 2021, attributed the lacklustre results to “non permanent” market conditions.
“The first quarter of 2022 continued a trend of both lower crypto asset prices and volatility that began in late 2021,” Coinbase wrote in a set of financials published yesterday. “These market conditions directly impacted our Q1 results.”
The digital asset market has shed 36 per cent of its value since the start of the year, sparking fears of a “crypto Winter” as its market cap declined from over $2 trillion to around $1.4 trillion.
Monthly active users on the Coinbase platform responded in kind, declining by a fifth across the quarter to stand at 9.2m.
The results make a stark contrast from the booming growth figures which characterised Coinbase’s performance across 2021 amid an explosion of interest in the crypto space. In the second quarter income for the crypto exchange stood above $1.6bn. Company shares have tumbled by almost 80 per cent compared to their IPO price.