Coinbase CEO expects the revenue for 2022 to drop by more than 50%
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After more than a year of the bear market in the crypto industry, a number of companies have filed for bankruptcy. Popular crypto exchange FTX is one of the biggest examples of this, which went bankrupt on November 11th of this year. However, even the big players such as Coinbase have experienced difficulties.
Coinbase CEO expects a major revenue decline in 2022
In a recent interview, Coinbase’s CEO, Brian Armstrong, stated that the exchange and its management are expecting Coinbase’s revenue for the fiscal year 2022 to be half or maybe even less than the revenue from 2021. The exchange noted in a tweet that the prediction is consistent with the outlook provided on its Q3 2022 earning call, which was previously published on November 3rd of this year.
Our CEO recently sat down with David Rubenstein at Bloomberg. Brian indicated that he expects Coinbase FY2022 revenue to be less than half of FY2021 revenue.
This view is consistent with the outlook provided on our Q3 earnings call on Nov 3, 2022.https://t.co/iCDO16bFf2
— Coinbase (@coinbase) December 7, 2022
The sharp decline that Coinbase is expecting came after the collapse of multiple major crypto companies, which only contributed to the drop in market prices of cryptocurrencies. Following a year-long crypto winter, the collapses only contributed to the market’s already major lack of stability.
FTX is the biggest example of this, its collapse came unexpectedly and it resulted in sending major shock waves throughout the industry. Right now, the Bahamas-based firm is undergoing bankruptcy proceedings in the United States, while in the Bahamas, it is facing both a civil and criminal investigation as a consequence.
Press Release pic.twitter.com/rgxq3QSBqm
— FTX (@FTX_Official) November 11, 2022
A tough year for crypto companies
FTX is not the only one, either. One of the largest crypto lenders in the US, BlockFi, also filed for bankruptcy in late November. Before that, other lenders made similar moves, including Voyager Digital and Celsius Network. When it comes to these two, it is believed that their misfortune comes from the previous collapse of the Terra blockchain, which went down after its native cryptocurrency and associated stablecoin lost their value and have nearly hit zero. The Terra collapse was the first big incident in the industry this year, taking place in May 2022.
Even that is not all, as the court in the British Virgin Islands recently issued an order for the liquidation of Three Arrows Capital, a crypto hedge fund from Singapore. These, as well as many other similar events, have already had a severe impact on the state of the cryptocurrency industry. The total crypto market cap, which sat at over $2 trillion at the start of the year, has already lost more than 50%, and the current crypto market cap is at $840 billion.
As for Coinbase, the company saw an excellent performance in 2021, doubling its revenue to $2.5 billion in Q4 2021 alone. However, by Q2 2022, its revenue crashed to $808.3 million. More than $1 billion was posted in losses, and by the end of Q3, the revenue went down even more to $576 million, showing a 29% decline.
