It’s no secret that 2022 has been a tough year for cryptocurrencies, and companies operating in the sector have struggled to cope with the crash of the crypto market. Coinbase, the crypto trading platform, has struggled as much as anyone else, and posted a 63% decline in revenues and an after-tax loss of $1.1 billion in the second quarter of this year.
Coinbase went public in April 2021, when the crypto market was flourishing and there seemed to be no end in sight for the rise of major offerings like Bitcoin.
The IPO was seen as a key achievement for the whole crypto industry, a validating moment for a relatively new movement. But the company has faced a tough year and the latest quarterly report reflects those challenges.
Coinbase said revenue for the three months ending June 30 was $808 million, down from $2.2 billion for the same period last year. Monthly customer total increased from 8.8 million last year to 9 million this year, but that was down around 200,000 from the previous quarter.
Coinbase Chief Executive Brian Armstrong remained upbeat on the company’s earnings call. He made a point of the cyclical nature of crypto and remarked the company had survived all previous downturns. “It seems scary,” he said. “But it’s never as bad as it seems.”
The company’s stock price has plummeted around 75% since November, and its outlook has always been intrinsically linked with the crypto market, which crashed in March and June. In response to Coinbase’s quarterly earnings report, the combined cryptocurrency market cap fell by 4% on Wednesday.
Coinbase laid off 18% of its staff in June, around 1,100 employees, as Armstrong cited overhiring. There have also been regulatory issues. The Justice Department filed insider trading charges against a former employee of the company last month, and there has been debate with the SEC over its decision to consider some of the digital coins listed on its exchange as securities.