Coinbase reported its second quarter earnings for 2022. The crypto exchange has suffered a huge loss of more than $1 billion in the second quarter.
The loss per share of the exchange stood at $4.95 against the expected $2.65. In addition, the company also failed its revenue estimates with Q2 revenue at $808.3 million against the $832.2 million projected. The exchange retail revenues have also dropped by 66% and stood at $616.2 million. Breaking down the amount reveals that Bitcoin (BTC) accounted for a lion’s share with 31% while Ethereum came a close second with 21% of the revenues.
The net loss further surged to $1.1 billion when compared to the $1.59 billion earned during the same period, the previous years. The crypto assets held by Coinbase also tanked by a huge 50% and stood at $428 million down from $1 billion in assets during the end of the March quarter.
In a letter to shareholders, the company wrote:
“Q2 was a test of durability for crypto companies and a complex quarter overall. Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management program.”
COIN Stock Sinks Over 10%
The COIN Stock crashed soon after the dismal second quarter results were released by more than 10% followed by another 5% subsequently and when results last came in, COIN Stock was trading at $82.90.
COIN Stock have lost 75% of its values and assets on the exchange tanked to stand at $96 billion from $256 billion.
In a letter to shareholders, Coinbase wrote: “While we did see net outflows in Q2, we observed that the majority of this behavior was institutional clients de-risking and selling crypto for fiat as opposed to withdrawing their crypto to another platform. As a result, our market share of the total crypto market capitalization declined to 9.9% from 11.2% in Q1.”
Coinbase has also been involved in an issue with SEC over the allegation od selling security tokens on the exchange. There has been some positive development in the form of partnership with largest asset manager BlackRock to offer Bitcoin exposure to institutional clients.