Shares of Coinbase (COIN) have taken a hit after the company posted a 75% decline in its net income during the third quarter of the year.
COIN closed on November 9 with a gain of 0.98% at a price of USD 357.39However, the release of the major US exchange’s third-quarter report after the market close has coincided with a drop of around 13.10% (at the time of writing) in its trading after the release of its report.
Coinbase reported revenue of $ 1,235 million in the third quarter of the year, well below analysts’ estimates, according to FactSet, of $ 1,614 million.. The firm’s earnings reached $ 406 million, representing a 74.7% decrease in earnings compared to the previous quarter, although it was above analysts’ expectations of $ 380 million. Coinbase also reported earnings of $ 1.62 per share, which fell 10% below the FactSet consensus estimate.
– Shibetoshi Nakamoto (@ BillyM2k) November 9, 2021
Despite disappointing third quarter performance, Coinbase said in the report that it had been a “strong quarter” for the firm, showing greater investor engagement in the platform and focusing on developing new products such as its upcoming NFT market. to get. The company also emphasized that it focuses on the long term rather than quarter-to-quarter:
“Coinbase is not a quarterly investment, but a long-term investment in the growth of the crypto economy and in our ability to serve users through our products and services. We encourage our investors to take this point of view. “
It seems that The icy relationship between Coinbase and the US Securities and Exchange Commission (SEC) is beginning to improve.
The CEO, Brian Armstrong first highlighted the company’s problems with the SEC in September, when he revealed that the watchdog had threatened to sue Coinbase if it launched its USD Coin (USDC) loan program.. At the end of the month, Armstrong claimed that the SEC was the only government body unwilling to meet with the company.
Nevertheless, Armstrong said on today’s third-quarter earnings call that he had a “very productive” meeting with the SEC chairman, Gary Gensley, last week.
Coinbase CEO @brian_armstrong says on Q3 call that he met with SEC chairman Gary Gensler last week .. called it “very productive.”
– Kate Rooney (@ Kr00ney) November 9, 2021
Coinbase CEO @brian_armstrong says in the third quarter earnings call that he met with SEC Chairman Gary Gensler last week … He called the meeting “very productive”.
The company posted 41% growth in subscription service revenue, of $ 145 million, compared to the second quarter, through avenues such as its ETH 2.0 staking program, custodial fee income and rewards from tokens. The firm also noted that its 7.4 million Monthly Transaction Users (MTU) are beginning to “engage beyond the first cryptocurrency use case.”
“Approximately 28% of our retail MTUs invested and committed to at least one other product in the third quarter. Additionally, 49% of our retail users used non-investment products such as Staking, Earn and Coinbase Card, including 2.8 million users who earned returns on their crypto assets. ”
The volume of operations on the platform amounted to USD 327,000 million in the third quarter of the year, 29% less than in the second, and institutional investors accounted for most of the operations, with USD 234,000 million, while retail traders accounted for $ 93 billion.
Ether (ETH) outperformed bitcoin (BTC) in terms of trading volume for the second consecutive quarter, as the former accounted for 22%, while the latter equaled 19% of the total volume. “Other crypto assets” accounted for 59% of trading volume, an 18% increase compared to the second quarter.