Crypto exchange Coinbase’s total earnings for the fourth quarter of 2022 were higher than analysts’ expectations despite a 12% decline in quarterly transaction revenue.
In December 2022, Coinbase CEO Brian Armstrong had earlier predicted that the exchange‘s earnings for the year may drop by 50% due to a bearish crypto market.
However, the firm’s net Q4 revenue stood at $605M, surpassing the $589M prediction made by Wall Street analysts. According to Coinbase, the 5% increase in quarterly revenue can be attributed to a 34% spike in subscription and service revenue.
Meanwhile, Coinbase’s net transaction revenue declined by 12% since its last report. The net consumer and institutional assets on its platform also fell by 71% since 2021. Coinbase also reported a net loss of $557M for Q4 2022.
Citing its recent layoffs, Coinbase noted that reducing the headcount in the firm will decrease operational expenses by 30%. The firm's CFO also stated that Coinbase will take more measures to reduce operational costs and increase EBITDA.
Going forward, Coinbase expects heightened regulation in the crypto industry in 2023.
“Disappointingly, we are not seeing regulators necessarily welcoming transparency and public participation in their rule-making.”
The firm claimed that the collapse of FTX acted as a catalyst in increasing attention toward crypto regulatory policies. Referring to the recent crackdown on staking, Coinbase stressed that US regulators’ stance on crypto is pushing platforms overseas.
“The SEC seems determined to increase its jurisdiction over digital assets, despite most of the existing US market not satisfying Howey or any other test that would result in digital assets being securities.”
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
Connect with Ayush on LinkedIn
