Cryptocurrencies have taken a beating this year. As Gizmodo reports, many have lost up to half their value within the last six months alone. But the beating that crypto is taking in 2022 is affecting more than just the digital coins themselves: In the wake of Coinbase’s most recent quarterly earnings, we now know that some crypto trading platforms are also underperforming.
Yesterday after the bell, Coinbase Global (Nasdaq: COIN) announced its Q1 2022 earnings. The results were not good and sent COIN stock plummeting. As of the time of this writing, COIN is down over 14.5% to $62.33 in pre-market trading. That’s an all-time low for Coinbase, which peaked at just over $319 last October. The company went public in a much-hyped direct listing a little over a year ago, the first major crypto exchange to list on U.S. markets.
So, what sent COIN stock crashing? As CNBC reports, revenue fell 27% from a year ago. That decline was led by fewer users placing crypto transactions on the platform. Retail monthly transaction users (MTUs) were down from 11.4 million in the previous quarter to 9.2 million in Q1 2022. That loss of trading volume meshes with the rough year cryptocurrencies have been having. When people see crypto prices crashing, they are going to be more apprehensive in investing in digital currencies.
As for Coinbase’s thoughts on the state of the overall sector, in its shareholder letter, the company said further investment was key. “That’s why it’s as important as ever for us to keep investing across our three strategic pillars: crypto as an investment, crypto as a new financial system, and crypto as an app platform,” the company said. “We are at a point in our evolution where we need to continue investing to drive growth and help grow our sector. At the same time, we will closely monitor market conditions to ensure we are investing our resources as responsibly and wisely as possible. We took steps to strengthen our balance sheet last year, and while the near-term may be choppy, we plan to invest prudently to drive long-term shareholder value.”