Brian Armstrong, the chief executive officer of Coinbase cryptocurrency exchange, has an optimistic outlook about the revenues of the company for its current fiscal year. According to the chief executive officer, that the profits of Coinbase could be reduced by up to a half due to the long-running cryptocurrency winter and the shaky confidence in investors.
He stated that the profit for the year in question appears to be below average in comparison to last year. He said that in particular that a reduction of fifty percent will likely occur in the earnings of the exchange this year compared to 2021. Armstrong explained the situation by saying that in the past year the revenue earned by Coinbase was around $7 billion. According to him, their positive EBITDA worth was about $4 billion.
Transaction Revenue of Coinbase Plummets Considerably
But, we have been witnessing an adversity or decrease in all aspects. According to the CEO’s statement roughly 50% of the income earned in the current year will be deducted from the current year’s.
This dreadful situation takes place at a time when the severe bear market in crypto is taking over the market capitalization of the entire cryptocurrency industry. In the end, the market has reached the lowest point the bearish trend.
The 22 23rd of November the market capitalization of the sector dropped to its lowest point in a long time of around $821 billion (equaling around seventy-three percent lower than the all-time record). Additionally cryptocurrency exchange, it is regarded as one of the companies that implement the highest trading costs across the entire industry.
In the 3 3rd period of the year 2021 the company reported revenues of $1.2 billion, with nearly 88% of it came from transfer fees.
Then, in the 3 3rd quarter in 2022 the company’s revenue decreased to an impressive degree by more than 50%, which paved the way for an estimated loss of $545 million. The situation of the 4 fourth quarter of the year is depicting a grim scenario.
The revenue total for the year ahead is predicted to be lower than half of what was earned in the previous year. As traders are becoming cautious due to the long-lasting bearish trend, the cryptocurrency exchange is generating less profit due to the lower number of transfers.
Based on the forecasts from analysts, less volatility is expected to last for a period of time. This means that there will be less trading opportunities for traders in the near future.
The Coinbase CEO then proceeded to speak about the demise of FTX. He stated that the event was plagued by a massive fraud at the root. Armstrong rejected the arguments offered by Sam Bankman-Fried in regard to the accounting mistakes.
COIN Shows a Bad Performance, Traders Perceive It as a Buying Opportunity
The shares of Coinbase has fallen by 81 percent in 2022. The decline that has been cumulative from its peak amounts to nearly eighty-six percent. COIN, the native token of the cryptocurrency exchange COIN has shown the lowest performance of the major crypto tokens that are trading on Coinbase. In addition, COIN is more in line with the record-setting lowest which occurred last month with $40.64. Stock traders are currently contemplating the dramatic drop of COIN as an “generational buying opportunity” as COIN’s prices could rise in tandem with the general cryptocurrency market’s recovery. But, this might be delayed until 2023’s mid-point or later.
