The cryptocurrency exchange Coinbase has revealed its first net loss as a public company of $430 million in the first quarter of 2022, but CEO Brian Armstrong said on an earnings call that he “has never been more optimistic about where we are as a company.”
In its Q1 2022 report, Coinbase revealed that revenue had fallen 27% to $1.17 billion, down from $1.6 billion in Q1 2021. and a far cry from its fourth quarter 2021 revenue, which was $2.5 billion. Users making monthly transactions also fell more than 19%, to 9.2 million, from 11.4 million last quarter.
Coinbase shares had already fallen over 16% to close at $73 throughout the day, and after the results were released, after-hours trading saw the price drop further to $61. at the time of writing this article. Coinbase shares have been in a steady decline since November 2021when it nearly peaked at $380 from its initial public offering (IPO) in April last year.
Despite the numbers, Armstrong explained why he remained optimistic on a revenue call:
“There are so many customers knocking on our door that we have to put all the meat on the grill to get things going, so downtime is sometimes a welcome change in that we focus on building the next layer of innovation that will benefit us in the next cycle.”
Armstrong said the company was “greedy when others are fearful”, acquiring talent and focusing on projects and infrastructure for the future.. Addressing what he called the “elephant in the room” of the company’s falling profits, he said:
“The markets in general are down. We are seeing a bear market for growth tech stocks and risk assets, and Coinbase and cryptocurrencies are no exception. The good news is that as a cryptocurrency company, we have experienced many different cycles in the crypto space, including big drops, which I think makes us well prepared to operate in these environments.”
He reminded shareholders of the prospectus published by the company a year ago, which stated that its goal was to increase cryptocurrency adoption in the long term, operating the company with an approximate break-even point.
In his letter to shareholders, Coinbase mentioned its recent launch of a non-fungible token (NFT) market as an area it was focusing more on. become a space leader and his ambition to develop his platform as an “on-ramp to the crypto economy.”
Armstrong claimed that 54% of the platform’s active users do something other than cryptocurrency trading, but it did not clarify what activities and made no mention of the new NFT market in its opening statement.
Asked specifically if the company is satisfied with activity in its NFT marketplace, Armstrong said he doesn’t share “metrics for any of our new initiatives.”” and added that “there is a lot to build on and the opportunity in the NFT space is huge.”
On the first day of public opening of the market, only USD 75,000 of transaction volume was registered in 150 operations, according to on-chain metrics, a small percentage of the more than eight million email addresses that signed up for the waiting list.
At the end of his opening speech, Armstrong said that the sector was in its early days and that Coinbase sees the opportunities that lie ahead, adding that “regardless of whether the market is up or down, we are going to continue to build.”
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