Struggling Market Made Coinbase’s Q3 2024 The Worst Quarter Since The FTX Collapse
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Coinbase, the largest US crypto exchange, recently revealed its financial statistics for Q3 2024, which showed a significant decline in the exchange’s performance. The struggling crypto market that was dominant at the time resulted in the firm’s profits and revenues plummeting, falling short of expected projections.
The platform’s overall income for Q3 ended up being $1.2 billion, which is a 17% drop from the previous quarter. It is also slightly below expert projections which put the income at $1.254 billion.
Furthermore, with its pre-tax losses on the mostly unrealized crypto investment portfolio totaling $121 million, the exchange ended up with a net income of $75 million. But, these issues aside, Coinbase still reported its sixth quarter of positive adjusted EBITDA, totaling $449 million.
Coinbase Saw Drops In Multiple Areas
In terms of transaction income, the exchange saw a 27% dip compared to the previous quarter, totaling $573 million. However this can be explained through lower crypto asset prices and reduced trading volumes, given that the market showed less volatility, and volatility is the main driver of trading activity.
Comparisons of volatility levels in Q3 vs Q2 show that the third quarter saw a volatility drop of around 5%. However, Coinbase also saw a 7% drop in revenue from subscriptions and services compared to Q2, which resulted in a total of $556 million. Experts believe that less average crypto asset values are to blame for this decline. But, at the same time, stablecoin income went up by 3% since the previous quarter, leading up to $247 million.
Coinbase also saw a 6% drop in total running expenses in Q3, which came in at $1 billion. Its development and technology costs went up 4%, coming in at $377 million, which suggests that the exchange was working on improving its offerings. It also approved a $1 billion share repurchase program in October, which suggested that it had faith in its financial health and the possibility of long-term expansion, despite struggles in Q3.
