Coinbase Declines 66%, But Remains Resilient in 2022
• Coinbase saw its total trading volume for 2022 decline by 50% year-over-year and its transaction revenue for 2022 fall by 66%.
• The company attributed its decline in performance to two high-profile collapses: Luna and Terra in May 2022 and FTX in November 2022.
• Despite these setbacks, Coinbase was resilient and reported a net full-year revenue of $3.1 billion, with fourth quarter net revenue of $605 million.
Coinbase Reports Financial Performance for 2022
Total Trading Volume Declines by 50 Percent
Coinbase reported that its total trading volume for the year of 2022 declined by 50% year-over-year. This resulted in a 66% decrease in transaction revenue over the same period. The company attributed this dip to two major collapses: Luna and Terra’s collapse in May 2022, as well as FTX’s collapse in November 2022. These events caused the crypto market to lose 64% of its value, which had an impact on Coinbase’s own revenues.
Net Revenue at $3.1 Billion
Despite these setbacks, Coinbase was able to remain resilient and reported a net full-year revenue of $3.1 billion, down from $7.4 billion in 2021. Additionally, the company’s fourth quarter net revenue was reported at $605 million—a decrease from Q4 2021 but an increase from Q3 202 ($576 million). Operating expenses were also up 3%, totaling at $1.2 billion for the year due to rapid hiring prior to the market crashes mentioned above.
Ended Fourth Quarter with U.S Dollar Resources of 5.$5 Billion
At the end of the fourth quarter (Q4) of 2021, Coinbase ended with U$D resources totaling at $5.$5 billion—a minor decrease from 0$.14$8 million from the previous quarter (Q3). The company addressed this issue by implementing layoffs during mid-2022 and early 2023 which should reduce expenses by over 30%.
Shareholder Letter Published
Today, February 21st 2023, Coinbase published their shareholder letter which detailed their financial standing for both Q4 202`2 as well as throughout the entire year of 202`2 . The letter noted that despite major shocks to their system they have remained resilient while continuing to diversify their sources into subscriptions and services which has allowed them increased quarterly revenues since then..