Coinbase has posted net revenue of $576m for its third quarter, down from $1.2bn a year before, and from $803m in the second quarter of 2022.
Coinbase also reported a loss of $545m during the third quarter, contrasting to a $406m net profit in 2021. These events have been largely attributed to the slump in the valuation of cryptocurrencies, Coinbase stated.
Tokens have lost nearly 70% of their value, considerably crimping results for the cryptocurrency exchange.
The price crash persisted in some of the main markets and tokens, including Bitcoin which has seen its lowest trading prices since October 2020.
Crypto asset volatility, Coinbase explained in a letter to its shareholders, was a “key driver of retail trading volume”.
“This was a very difficult quarter for Coinbase as macro and crypto headwinds are front and centered”, Coinbase explained attributing the current rough patch to the phenomenon known as crypto winter, which is likely to last longer than originally thought and expected.
Coinbase has already been trying to mitigate some of the damage. In June, the company decided to cut a fifth of its workforce, or more than 1,000 employees.
At the time, Coinbase chief executive Brian Armstrong admitted that his company had been growing too ambitiously, with more than 3,700 employees as of 2021, which proved an unsustainable number in the long-term and did not account for the events of a sharp downturn such as the one we are living through now.
Commenting for Financial Times, Charley Cooper, managing director at blockchain group R3, said that crypto firms should stop trying to distance themselves from mainstream economy and exist in their own bubble.
Coinbase is not the only company that is feeling the pinch. Others, which flirted with cryptocurrencies, such as Robinhood, have also been experiencing difficulties, including Robinhood, an asset trading platform.
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